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Saturday, May 28, 2011

Borders creditors talking tough

Creditors Oppose Borders Bid For More Time

Perhaps heartened by news of the sale of Borders in New Zealand, Borders' unsecured creditors committee have objected to the bookseller's bid for more time to come up with a plan to exit Chapter 11.

They are "gravely concerned" that extending the exclusivity period up to 120 days "could be detrimental to the interests of the debtors’ general unsecured creditors."  The unspoken agenda, they accuse, is  to "file and solicit a plan at any time," most probably to ask for liquidation.

Instead of fiddling about with a reorganization, the committee wants a sale. Asserting the "absolute necessity" that Borders' assets "will be sold to one or more buyers" in the next 30 to 60 days, they say Borders "should not be allowed to control the plan process by their ability to file their own plan through extended exclusivity because, to date, they have not shared any plan with the Committee."

The creditors also worry that Borders has "reported losses at an alarming rate," dropping more than $180 million in just ten weeks.

Which tends to indicate that something major will be announced within days, not months.

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