Borders Group Inc. (fka BGPIQ)

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Borders Finds Buyer to Continue Operating 30 Stores

Borders Group Inc. said there is one offer from a non- liquidator to acquire 30 stores, plus associated inventory and fixtures.

If the offer measures up, the bookseller said it will seek approval for the sale at the July 21 hearing where the bankruptcy court will be asked to approve going-out-of-business sales conducted by liquidators at the remaining stores.

A state taxing authority in Texas filed papers opposing proposed terms of the sale providing where the liquidators disclaimed responsibility for taxes when the bankrupt company didn’t pay. Texas contends the bankruptcy court has no right to suspend the enforcement of state tax laws.

The state pointed to the liquidation of Ultimate Electronics, where the liquidators disclaimed responsibility for paying sales taxes when the bankrupt company didn’t either. The liquidators who sold off Ultimate Electronics are the same as those proposed to run going-out-of-business sales for Borders.

For Bloomberg coverage on other objections to the sale, click here.

Borders may have sealed its fate 10 years ago when it handed the online bookselling business to Amazon.com Inc. For a Bloomberg feature story, click here.

Borders had 642 stores on entering bankruptcy in February and is currently operating 399. It listed assets of $1.28 billion and liabilities totaling $1.29 billion. Debt included $196 million on a revolving credit and $48.6 million on a term loan. Trade suppliers were owed $302 million for inventory.

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


http://www.businessweek.com/news/2011-07-20/lehman-borders-fairfield-madoff-colonial-bankruptcy.html