A showdown like this has been looming from the start, given Borders' financing terms, exacerbated by their significant and continuing losses. (As we reported last week, Borders has just $85 million in available financing left to use from the initial $500 million granted by GE Capital.) Referring to themselves in the abstract as the "debtors," Borders' lawyers tell the court they face an unfortunate dilemma: "This leaves the Debtors with a Hobson's choice: the Debtors can proceed with store closing sales at these stores under these unfortunate circumstances or, if they refuse to do so, risk being placed into default."
...the company says they would have to pick a liquidator by June 16 and begin store closings by June 22 to avoid defaulting on their loans.
...An unofficial employee message board is circulating a list of the 51 affected stores, asserting that up to a third are "definitely" closing, some are ready to sign a new lease and the remainder are in negotiations for new leases. Among those on the list are the remaining two stores in Manhattan, airport stores at JFK, Detroit, Indianapolis, Logan International and BWI, and three stores in Hawaii.
Labels: Borders, Liquidation, store closings