It’s the talk of the publishing biz right now, but Publishers Weekly is the only place with a report on it: Is Borders actually attracting the interest of potential buyers?
Yes, says a PW report by Judith Rosen. Or at least, as she says in the report, “The chances that Borders may be sold as one business or piecemeal appears to becoming more of a possibility.”
Mind you, Rosen does not cite any specific interest at all — not only doesn’t she name any names, she doesn’t so much as hint at a specific interest or possibility — but she does say that the court has seemingly cleared the path in a way that apparently makes her optimistic, and at least resonates with the rumors MobyLives has been hearing. As she explains:
Last Friday was the deadline for the submission of bids to the company’s investment bankers and financial advisors, Jeffries & Company. Any bids would have to be approved by the Creditors Committee and the U.S. Trustee. In addition, at the hearing on May 11, Borders is asking the court’s approval to sell or transfer de minimus, or “surplus, non-core or burdensome,” assets clear and free of lien. These would be items going to a single buyer or group of buyers for million or less.
An example cited in the filing concerns property at the Northeast Distribution Center in Carlisle, Pa., which is slated to close soon. Borders says that it would cost too much to extend the lease on the center to give brokers and equipment liquidators the 75 to 90 days they would need for an onsite auction. In order to vacate in less than 30 days from closing, they want to be able to sell the equipment and other assets there themselves. They are also seeking to sell equipment and furniture in corporate headquarters.
Beyond that, according to Rosen, “So far only one objection has been raised. Verizon is concerned that Borders may try to sell equipment that it leased to them.”
Okay, so it’s a completely speculative story that doesn’t cite anything to justify its headline. It at least explains the possibility that that the chatter of the moment is feasible. What it doesn’t explain is why anyone would be crazy enough to buy a company so deeply mismanaged as Borders. (Hint: the non-executive staff.)
Borders CEO Mike Edwards gave an interview to the company’s hometown newspaper yesterday, the Ann Arbor News, in which he reveals that the company that has yet to present a reorganization plan to the court has a new scheme for pulling out of bankruptcy: attacking publishers.
The Justice Department has complained to the judge in the Borders bankruptcy case that the bookseller “hasn’t shown that it can pay the costs of its bankruptcy case and should be denied requests to pay lawyers and other professionals,” according to a Bloomberg News wire story.
Although the Borders Group has yet to present a plan for staying in business to its bankruptcy judge — it’s already been given a delay — the plan the company presented to GE Capital that got them half a billion dollars to finance their bankruptcy reorganization appears to have been a bad plan. Or at least, according to a Bloomberg News wire story, which last night reported the company “is seeking at least million in additional financing as sales trail expectations and publishers demand cash in advance ….”
The e-bookseller Kobo added million in new funding last month in addition to million from existing investors, according to this Paid Content report, which comments that the amounts are “pretty huge”:
Despite the fact that the Department of Justice has opposed it, and publishers (aka “creditors”) have cited it as a major reason they don’t think the company is worth working with (see the previous MobyLives report), the executive team for Borders has filed a motion with its bankruptcy court judge insisting that it really, really needs that .3 million in executive bonuses it wants to give its, er, executive team, before it turns to paying off the tens of millions of dollars it owes to its creditors.