Borders staves off closing of six bookstores
New York: Bankrupt Borders Group Inc. reached agreements to avoid shuttering six of its stores that the bookseller planned to close under the terms of its bankruptcy loan.
Landlords for stores in Boston and Detroit are among those who agreed to give the insolvent bookstore chain more time to decide whether to break or maintain leases on its properties, Borders said in court papers filed Friday in U.S. Bankruptcy Court in Manhattan,
Borders told the court on Thursday that it might need to close 51 stores under the terms of a $505 million bankruptcy financing loan from General Electric Co`s (GE.N) GE Capital.
The latest extensions lower that number to 45 stores. The company is working to reach similar extensions with as many of the remaining stores as possible, a Borders spokeswoman said.
The salvaged locations include Boston`s Logan International Airport, Raleigh-Durham Airport, two locations in Detroit Metro Airport and stores in Westland, Michigan, and Mansfield, Connecticut. The company is also awaiting court approval of an agreed-upon extension for its Mt. Kisco, New York store, according to court documents.
Borders had until September 14 to decide whether to keep open more than 400 stores nationwide. Under the terms of its loan, the company either had to extend that deadline or start closing procedures by June 22.
It reached earlier extensions on about 360 stores. The latest agreements push the deadline to January 12, 2012.
Borders plans a June 16 auction to find a liquidation agent for closing sales at stores where extensions are not reached. Manhattan`s Columbus Circle store is one of the locations that still might close.
Borders, which helped pioneer the concept of book superstores, fell into bankruptcy in February after years of falling sales, and it has closed 226 stores.
The company is trying to find buyers for as many of its remaining stores as possible, and has drawn interest from private equity firms Gores Group and Najafi Cos, according to the Wall Street Journal.
The case is In re Borders Group Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-10614.