The beleaguered Borders Group won the bankruptcy court’s permission to extend the amount of time it has to find a buyer and thus avoid the immediate liquidation of about 40 stores. Borders had to extend the deadline on its $505 bankruptcy loan, which was set to expire this month. The company now plans to file its plan to sell itself at a court-approved auction by July 1st. Borders is paying its lenders a $1million fee for the short term extension.
According to Bloomberg News, Judge Martin Glenn only reluctantly agreed to what he characterized as “a very minimal extension in these dates.” Though the fee was lower than what the lenders originally proposed, the judge explained his reluctance at approving the deal: “The reluctance is I think you’re getting raped, is the best way I can describe it. These fees are out of sight. The other side of the coin is, it’s the only game in town, so it is with reluctance that I approve the motion.”
The extra time will allow Borders to talk with more potential “stalking horse” buyers, a group that already includes Najifi Cos, and the L.A. based Gores Group (see “Borders Auctionin July”).