A federal bankruptcy judge has decided to give Borders Group another 90 days to review leases for its bookstores. The Ann Arbor-based bookstore change is working to emerge from bankruptcy later this year. Borders is already closing 200 bookstores across the country, including 4 stores in Michigan. Borders is expected to announce plans to close additional stores and renegotiate leases on about 600 other outlets.
Reuters reports on what getting the extension will enable Borders to do:
Borders asked for an additional 90 days, which would kick in after it hits the current June 16 deadline for rejecting leases. The extension is one of the requirements of Borders' proposed bankruptcy financing and was requested by its lenders, who said the time would be necessary if they need to liquidate stores.
Bloomberg filed a report on today's proceedings in federal court in New York. The hearing cleared the way for the half billion dollars in financing Borders lined up to fund its way through bankruptcy to be released to the company:
The $505 million loan is a “lifeline” that will allow the company to reorganize, and the ability to draw on it already has allowed the company to replenish depleted inventory and beat its initial budget, Borders said in court papers.
Borders spokeswoman Mary Davis issued a statement expressing the bookseller's reaction to the judge's decisions today.
"We appreciate the court's approval of our lease extension request. We are focused on moving through the Chapter 11 process as efficiently and as expeditiously as possible as we seek to reorganize Borders to return to viability and to reposition our company to be successful for the long term."
Borders is reportedly trying to exit bankruptcy in August or September. The bookseller hopes a leaner chain of bookstores will be ready to compete for customers during the all important holiday shopping season. Borders share of the nation's book buying market has shrunk in recent years as book buyers have migrated from big box stores to online sellers like Amazon.com and boutique bookstores.