Tuesday, December 20, 2011

Borders Creditors to Get About 10 Cents on the Dollar


 
With this morning's court approval of Borders's liquidation plan and the sale of its Kobo interest and IP addresses, publishers will do better than expected in terms of recouping their losses with the bankrupt chain. While Borders originally anticipated paying 4¢ to 10¢ on the dollar to creditors, it will likely be at the high end and could even exceed that, according to attorney Andrew Glenn.
 
There is expected to be a claim recovery pool of between $80 million to $90 million in funds to pay creditors. In fact much of the hearing was taken up with Kobo, which alone will bring in $27million to $32 million, assuming that lawyers can prevent a tax bite that could be as large as $10 million.
 
Borders's agreement with Next Jump was also approved and the Court gave preliminary approval to the Pinsker settlement. The latter paves the way for a mid-February Fairness hearing and distribution to workers in the company's Michigan facility, who filed for moneys owed under the WARN motion.  
 
Now that the liquidation is just about complete, Judge Martin Glenn took the opportunity to thank the attorneys for both Borders and the Creditors Committee. "I think you've all worked cooperatively in difficult circumstances," he said. "You've all worked rapidly which has maximized the estate, and as in the Kobo sale, the stars were aligned."
 
*From PW Daily
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