Nearly 400 Borders Group Incorporated book outlets will close, though approximately 30 will now be taken over by Books-A-Million, as approved by a bankruptcy judge on July 21 and reported by the Wall Street Journal.
Hilco Merchant Resource and Gordon Brothers Group LLC led the bankruptcy court approved liquidation.
Judge Martin Glenn, of the U.S. Bankruptcy Court in Manhattan said, "Hopefully the Books-A-Million transaction will at least help in maintaining some employees with continuing jobs."
Out of almost 11,000 jobs, 1,000 should be saved in the transfer of locations to Books-A-Million.
Borders lawyer, Andrew K. Glenn, of Kasowitz, Benson, Torres & Friedman, told the judge, "Your honor, this is a very bittersweet day in the history of this company."
A committee, representing Borders unsecured creditors, had voiced their concerns about a Najafi Cos. bid.
Najafi Cos., a private-equity firm, had originated a deal that didn't come to fruition a week ago, causing a planned auction to become a court-ordered liquidation.
Glenn read the list of 30 stores that Books-A-Million wants to buy, including five more it wanted the option to buy, which included eight located in Pennsylvania.
Borders is working with creditors for their support of the sale of the stores to Books-A-Million.
The creditor's group, per a lawyer for their committee, stated that they would not support the sale unless value is increased for the creditors - and allegedly "seven figures" of value is to be added, per a lawyer for Borders.
Books-A-Million currently operates 231 stores. The company is looking to buy 30 Borders stores once they assume the leases.
The last sale that Borders will have, a "going out of business", has begun in all 399 stores.
Mike Edwards, Borders President, said, "This marks the end of an era and we thank our customers for their patronage over our 40-year history."
Joining Gordon Brothers and Hilco in the liquidations are Great American Group LLC, SB Capital Group LLS and Tiger Capital Group LLC. In a group statement the companies said, "We expect this will be a short sale."
Of the alleged $350 to $400 million in unsold merchandise, the liquidators must pay 72 percent of that amount before the stores can be closed.
Liquidators will add up the merchandise to check the accuracy against Border's records. If all works out as expected, the liquidators will then pay the balance due to the bankruptcy estate.
Liquidators are responsible to keep a count of all of the sale's proceeds, with reimbursements for expenses and advances to the estate. Once all is said and done the liquidators, and the estate, split the remaining amount of money garnered during the close-out sale.
Borders filed for Chapter 11 this past February.
Between their competition increasing, and the popularity of electronic books, it had become a struggle for them to remain afloat.
Borders had already closed over a third of their stores prior to this week's liquidation -
they had 642 stores in all.
Contact a bankruptcy lawyer if you are considering either a business or personal bankruptcy filing. A qualified and experienced lawyer can help you through the process.