News Borders Creditors Object to Bankruptcy Extension
posted on 2011-05-31 23:42 EDT
On May 26, the Creditors Committee that was appointed to the bookstore chain Borders' bankruptcy petition — which includes book publishers Penguin, HarperCollins, Random House, and Perseus Books Group — filed an objection to the chain's request for a 120-day extension on its deadline to file a bankruptcy plan. The objection cites Borders increasing losses as a grave concern to the debtors, and further claims that the company has "failed to establish 'cause' to justify" the extension. The committee requests that if the judge grants the extension, that it be permitted to file its own plan should Borders wind up filing a plan without the committee's support.
Borders has met with publishers both before and after filing bankruptcy in an attempt to negotiate credit so that it can acquire product for sale in its stores; however, the filings may indicate that no such deal has been forthcoming. In the meantime, the publishing industry news source Publishers Weekly reports that the chain has been acquiring its stock on a cash-with-order basis.
Borders' filing for bankruptcy came after a string of difficulties for the chain, including the departure of two of its executives and the delay of payments to publishers, followed by additional layoffs and an attempt to convince publishers to treat its debts as loans, which failed. As noted by the retail news source ICv2, Borders played a crucial role in the rise of manga sales in the United States in the first half of the last decade. Former Tokyopop CEO Stu Levy cited Borders' bankruptcy as part of the reasons for layoffs at the publisher shortly before its announcement of closure.