On Friday U.S. Bankruptcy Judge Martin Glenn in the Southern District of New York cancelled a hearing on Borders’s motion regarding unexpired leases. Instead, he signed the proposed order enabling Borders to reject four leases and to abandon personal property within their premises effective February 16, with the commencement of the bankruptcy. The leases in Boise, Boulder, Minneapolis, and Grove City, Oh., were set to expire between 2015 and 2023 and together account for close to a quarter million dollars of the bookseller’s monthly rental obligations.
The next bankruptcy hearing, slated for Tuesday March 15, will cover final orders for interim relief granted Borders at first-day hearings on taxes, insurance, distribution network vendors, DIP, cash management, and equity trading, as well as other motions and applications. Among them is one filed at the beginning of March, which seeks to extend the time Borders has to assume or reject unexpired leases from 120 days to 210 days. Borders is requesting the additional 90 days to go through 681 leases, including 674 for retail stores. Among the reasons stated in the motion for extension is that under its $505 million DIP financing facility, the bookseller has to set aside a Lease Reserve for inventory that is at locations that aren’t assumed 120 days before the deadline to assume or reject. This could have what Borders’s attorneys call “a severe and detrimental affect” on the company’s liquidity.
