Bookseller Borders Seeks Exclusivity Period Extension

by San Antonio Attorney

Borders Group Inc, the second largest bookstore chain after Barnes and Noble Inc, has requested to a bankruptcy court judge for a time extension for its reorganization plan proposal, which Borders has exclusive rights to.

Borders explained in its bankruptcy filing that they need an extension to the 120-day exclusivity period due to the amount and intricacy of the Chapter 11 proceedings. The exclusive right to file a plan of reorganization will not allow outsiders to make proposals on arrangements to pay creditors.

According to the Borders, the exclusivity extension, which is usual in bankruptcy proceedings, will allow the business operations to keep on while formulating a way out to the bankruptcy.

The request will be considered by the judge on June 2, almost four months after the company has filed for Chapter 11 protection with $1.6 billion assets and $2.6 billion liabilities.

The company’s financial report has showed that it has a $479.9 million loss on its $1.67 billion by January 29.

Borders has reported in its most recent filing that it is looking at leases and contracts to see where it will be able to cut costs and it is closing down 237 of its stores, a third of its total.

Borders also seeks to end licensing agreement with Starbucks Corp. unit Seattle’s Best Coffee LLC in a separate court filing. Borders said that the royalty payments are excessive. The company owes Seattle’s Best Coffee about $5 million according to its creditor’s list.

Borders intends to run its own Café program in order to save on the licensing fees and other costs, and increase profit. Stef Goodsell, Border’s spokesperson, sent an e-mail statement that Borders will also be able to offer items in the cafe according to what the customer prefer if the change will happen. In the past year, Barnes & Noble abruptly expanded its educational, toys, and games offerings.

Recently, Borders had begun to move the concentration away from expansion plans and identifying unprofitable stores to be closed. The company modified its customer loyalty program, started a digital book store, and revamped its website.

In the company website, Borders told customers that all reward programs and gift cards will be accepted, and business operations will continue as normal.

The case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York.

If you found this article interested please visit the San Antonio Bankruptcy section for more news.

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