Borders May Close 51 More Stores

by San Antonio Attorney

Borders Group Inc is looking at shutting down some of its most successful stores as the bankrupt company tries to prevent a bankruptcy loan default.

The bookstore chain requested in the U.S. Bankruptcy Court in Manhattan to liquidate 51 of its stores if the deadlines for settlement with the landlords can no longer be extended, according to court papers.

Before Borders filed for bankruptcy, it had 642 stores. If the closures happen, only 365 stores would be left.

Borders is working on getting a deadline extension for its decision if it would keep or let go of the leases at the stores. But the terms of the bankruptcy loan serviced by GE capital says that Borders has to begin the proceedings of closure if it does not get an extension. The bookstore received $505 million financing.

In court papers filed on Thursday, Borders is going to choose a liquidating agent to handle the closure sales at the stores in an auction on June 16. Some of its most profitable stores are going to be included.

Borders’ spokeswoman Mary Davis said that the company is expecting to get lease extensions for most of its stores. It has no impression as to the actual number of stores that are going to close.

Some of the stores that might be included are Columbus Circle, John F. Kennedy International Airport, and New York City’s Pennsylvania Station.

Borders filed for bankruptcy in February saying that it can no longer cope with its debt load due to decreasing sales. It has already shut down 226 of its stores and i selling 416 of its remaining stores.

Borders has told lenders to put off their demand for closure proceedings before July 21. It said that he closing down of its 51 stores would cause considerable job loss, and including some of its most profitable stores may affect the bookstore’s ability to sell its stores.

 

–    Liquidation is not the only way to resolve serious financial problems. If you want to avoid liquidation, a San Antonio bankruptcy can help you find other viable options.

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