Borders’ Liquidation Plan Approved By Bankruptcy Judge

by San Antonio Attorney

Borders Group’s sale plan on its assets to a group of liquidators was approved by a U.S. bankruptcy judge on Thursday.

Gordon Brothers Group and Hilco Merchant Resources were appointed by the Borders as liquidators in the sale plan. The plan was approved by Southern of New York Bankruptcy Judge Martin Glenn. The sale is scheduled to start on Friday at some of the stores of Borders.

The move to sell off the bookstore’s assets had been anticipated after the $215 million Najafi Cos bid collapsed due to lenders and creditors’ objections. They wanted to get the assets liquidated as soon as possible while they are still worth more.

Books-A-Million, a rival bookstore chain, might buy at least 30 of the remaining stores of Borders. According to Borders lawyer Andrew Glenn, if the sale pushes through, it could save around 1,500 jobs.

If the deal happens, Books-A-Million will become the country’s second-biggest bookseller. Currently, it has more than 200 stores.

Morningstar analyst Peter Wahlstrom said that the deal is sensible as Books-A-Million will probably save money in terms of leasing out the space used by Borders, and it will not have to spend as much to renovate the space.

Borders filed for Chapter 11 bankruptcy protection after being battered by rivalry from Internet retailers and weighed down with huge debt. Initially, the bookstore hoped to come out from bankruptcy protection as a small-scale but profitable business. However, lenders and creditors have pressured the company to liquidate.

When Borders filed for bankruptcy protection in February, it closed down 642 stores and 19,500 of employees lost their jobs. In the following months, more stores were shut down and thousands got laid off.

Borders expects to pay off vendors for all of the costs they have incurred in the bankruptcy cases.

No one is invisible from hard times.  If Borders had to file a San Antonio Bankruptcy, than many other businesses are using this as a last resort to make a bad situation a lot better.

 

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