In Tuesday morning’s Omnibus hearing, Manhattan bankruptcy court judge Martin Glenn granted the bulk of Borders’ motions, including an extension of the deadline to renegotiate existing leases by an additional 90 days to September 14. The court also gave final approval on the $505 million credit facility pending several changes are made, including a provision giving the unsecured creditors committee $125,000, up from $50,000, to fund investigations of claims of secured lenders. Judge Glenn empathized with part of the creditors’ objection, noting that “when I look at the incremental cost of new money coming in, it’s pretty steep,” but he […]
Legal
Borders Creditors Say Financing Favors Lenders Too Much–And Warn Bookseller Needs A Real Plan By June
The committee of unsecured Borders creditors filed an objection in bankruptcy court Thursday afternoon over the terms of Borders’ debtor-in-possession financing, which they view to be “unreasonable, overreaching and otherwise inappropriate.” The main contention is that Borders borrowed more money than they actually need, creating oversized fees in the millions of dollars for lenders, which only reduces the available funds to pay back creditors. The filing argues that the lenders used their leverage “to impose the objectionable provisions” which Borders was “forced to agree to,” knowing that the bookseller “was on the brink of collapse” before filing for Chapter 11.” […]
NYSE Officially Delists Borders Stock; Seattle’s Best Complains Bankruptcy Will ‘Expose Trade Secrets’
The New York Stock Exchange somewhat obviously filed notice with the SEC that they will officially delist Borders stock on March 21, noting “the uncertainty as to the timing and outcome of the bankruptcy process, as well as the ultimate effect of this process on the Company’s common stockholders. Borders stock was suspended when they filed chapter 11, and even though the company had 10 days to appeal, they did not do so. SEC Filing Meanwhile, Starbucks subsidiary Seattle’s Best Coffee lodged an objection with the bankruptcy court on the grounds that Borders closing 200 stores could damage the company’s […]
Fleetwood Mac Album Producer Sues HarperCollins For Breach of Contract
Ken Caillat is best known in the music business as the man who produced Fleetwood Mac’s 1977 album Rumours, one of the best-selling rock records of all time. That credential in turn garnered him a $555,000 advance from HarperCollins’ It Books imprint to write Starting Rumours, an oral history of the making of that record, which the publisher won at auction from Caillat’s agent Peter McGuigan of Foundry Media. But last month, Caillat filed suit against the publisher in Ventura County Superior Court alleging that he was rightfully owed his entire advance, and that HarperCollins had breached their contract by […]
Bookselling: Borders Lease Writedowns; Joseph-Beth Bankruptcy Proceedings; Easons Turmoil; and More
Borders‘ motion to vacate unexpired leases for four stores in the midwest was approved by New York Bankruptcy Court late last week, reducing the amount of rent Borders is obligated to pay by approximately $245,000 per month. Affidavit [PDF] Last week, Joseph-Beth Booksellers sought more time from bankruptcy court to file a reorganization plan, which was originally due on March 3. Ultimately that hearing was pushed back to March 23, but not without some harsh criticism from the unsecured creditors committee, which charged that Joseph-Beth’s “management and professionals have not yet defined the contours of their reorganized business and how they intend […]
Legal Briefs: BN Poison Pill Measure Upheld; Book Review Libel Case Dimissed; HB Fenn Bankruptcy Proceedings; and More
A Delaware Appeals Court has refreshed our collective memory on last year’s protracted proxy fight between Barnes & Noble and billionaire Ron Burkle thanks to its ruling yesterday that the poison pill measure, which limits stockholders to 20 percent or less of total company stock, should still be allowed to stand. AP The libel case author Karin Calvo-Goller brought against NYU Law School professor Joseph H.H. Weiler for publishing a negative review of her book has been dismissed by a French court, which said “the review expressed a scientific opinion of the book and did not go beyond the kind […]