Borders parent selling itself off at the end of the month, fate of last local store pending
The fate of the last remaining Borders bookstore in Puerto Rico will likely be known in about two weeks when its Ann Arbor, Mich.-based parent company goes to U.S. Bankruptcy Court to seek permission to sell itself. If the petition is denied, the beleaguered bookstore will have to liquidate the assets it has left, including its Plaza las Américas location.
When the company goes to court in New York July 21, it will present a $215 million buyout bid it received from Phoenix, AZ-based private investment firm Najafi Co.’s Direct Brands LLC, which owns Book-of-the-Month club.
Najafi’s bid also includes assuming $220 million in Borders debt, plus a commitment to provide $15 million of funding to wind up Borders’ Chapter 11 cases, according to court papers filed earlier this month.
One stumbling block to a potential sale to Najafi — which if approved would keep close to 340 existing stores open and save thousands of jobs — is a higher offer by the liquidating group led by Hilco Merchant Resources and Gordon Brothers Retail Partner LLC. The liquidators offered to pay $252 million to $284 million for the failing business, but that amount does not include assuming the debt.
Borders filed for Chapter 11 bankruptcy in February, triggering the closing of 237 underperforming stores nationwide, including its former locations Carolina and Mayagüez. The liquidation sales included everything in the stores, including fixtures and its coffee shop goods. Toward the end of the sale, items were practically given away in an effort to eliminate as much merchandise as possible.
Borders has since closed several dozen more, according to court documents.
Last week, representatives from Plaza las Américas, where Borders operates a two-story superstore, told News is my Business they had no information available on what will happen to the location.