Hachette begins legal action against Borders administrator MCR

09.12.09 Catherine Neilan in The Bookseller

Hachette UK has initiated legal proceedings against Borders UK's administrator MCR in order to establish its retention of title (ROT) claim and receive payment for the stock already sold. Meanwhile, wholesaler Gardners is understood to have recommenced supply with Borders UK, along with a handful of remainder merchants, with chain now advertising up to 50% off titles.

Peter Roche, deputy chief executive of Hachette and chair of the committee set up by the Publishers Association to deal with the troubled retailer, said the administrator was being "extremely obstructive" over ROT claims. Last week, MCR told publishers that it had "sufficient funds" to settle claims. But Roche said MCR was preventing publishers establishing ROT. "They refuse to do or accept anything," he said, adding that, as a result "we are in the process of taking legal action".

He added: "Yesterday [8th December] we had a meeting with the administrators, and at this stage we see no other option but to take the legal route. The administrators have forced us to do this." Though other publishers are "aware" of the move, it understood that only the Lagardere-owned corporation is taking this action. Roche said legal notices would be sent out today, in expectation of a result within 24 hours. He estimated that publishers were owed "in the region of £7-8m" by Borders, though was still confident that debts would be repaid in full.

Gardners has been supplying Borders UK since Saturday (5th December), on what is thought to be a pro-forma basis, despite the wholesaler being one of the first to put the retailer on stop. A handful of remainder organisations are also thought to be supplying the chain.

MCR was brought in almost two weeks ago as administrator of Borders UK. It PR representative would not comment on this story, or on rumours that the chain has let a further 12 employees go, including chief executive Philip Downer..