Saturday, June 04, 2011
Borders Gets More Time To Reorganize
In federal bankruptcy court Thursday morning, Judge Martin Glenn agreed to extend the exclusive time period in which Borders can come up with a plan for emerging from Chapter 11 bankruptcy or selling the company's assets. As previously reported, Borders would have run up against a June 16 deadline to file a plan under an exclusivity period, which has now been extended to October 14, with time to solicit votes on such a plan pushed back to December 13.
Borders representative Andrew K. Glenn explained in court that a sale is now the focus of their efforts rather than reorganization, saying the company is in talks with "multiple buyers" interested in "most up to all" of the remaining 405 stores. To which Judge Glenn dryly commented, "I read the Wall Street Journal this morning, too," referring to Tuesday evening's report of interest on the part of private equity firm Gores Group. Despite the judge's implication of how the story might have gotten there, attorney Glenn floated the idea that the newspaper piece emerged from the creditors' committee--which the committee's representative vehemently denied.
Though Andrew Glenn said he was "not at liberty to disclose any details of what's going on," he insisted the sales process was "significantly more robust" now than it was recently (thanks, Liberty Media) and that Borders estimates they can close a deal within 2 to 4 weeks, after which they would file a formal motion to sell parts or all of the company. "We have 11,000 employees, multiple buyers, hundreds of landlords, thousands of creditors. It's most important to have a streamlined, rational process to allow company to do what it needs to do to remain a going concern." As for the committee, they said their main objection was not being kept in the loop and having little knowledge of Borders' ultimate plan. Glenn also complained at one point "we are getting slaughtered in the press," though he later toned down his wording once he realized multiple reporters were present at the hearing.