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Lauriat's Chain Files For Chapter 11 Protection
Jim Milliot -- 3/9/98
Unable to find a buyer, cash-strapped Lauriat's Inc. filed for Chapter 11 bankruptcy protection February 27 in the U.S. bankruptcy court in Boston. Company spokesperson Steven Porter said that it is the company's intention to "remain a bookstore operation," and added that Lauriat's has no intention of trying to liquidate its assets. With sales of approximately $120 million and more than 1000 employees, Lauriat's is one of the largest, if not the largest, bookstore operation ever to file for bankruptcy protection.
The company's owner, ING Equity Partners, has named Matthew Harrison, an expert in corporate turnarounds, to help lead Lauriat's through the Chapter 11 proceedings. Harrison replaces Danny Gurr, who resigned from the company at the end of February.
According to court papers, Lauriat's had total liabilities of $82.1 million and total assets of $60.6 million as of December 31, 1997. At the time of the filing, Lauriat's had approximately 5000 unsecured creditors to whom it owed $43.4 million. In addition, the company reported secured debt of $28.6 million that it owed to one creditor. Of the $43 million in unsecured debt, the company's 20 largest creditors are due about $19 million.
Topping the list of Lauriat's unsecured creditors is Random House, which is owed $4.7 million, followed by Bantam Doubleday Dell, due $2.2 million. Simon &Schuster is owed $1.9 million, while Macmillan Publishing USA is due $729,466. The Von Holtzbrinck companies and Little, Brown are both owed $1.3 million. HarperCollins is out $863,543, while Bookazine is due $741,055. Ingram has unsecured debt of $672,343, while Publishers Group West is due $488,135.
Among the medium-sized publishers with large outstanding claims are IDG Books ($535,683), Andrews McMeel ($534,374), Workman ($416,149) and Health Communications ($332,022).
Other companies owed money include Wiley ($329,237), K n Book Distributors ($317,793), Smithmark ($292,875) and Book Sales ($244,565).Porter said that to help return the company to profitability, it closed eight stores during the week of February 23. Any additional store closings will depend on the details in the reorganization plan that will be drawn up by Lauriat's and the creditors' committtee. A meeting was set for today, March 9, with the company's 20 largest creditors, at which a committee will be formed to begin work with Lauriat's.
John Drew of the firm Lane, Altman &Owen, who is representing Lauriat's, said the basic plan calls for rejecting unprofitable leases and returning the company to a group of profitable stores. "We fully anticipate emerging from these proceedings successfully," Drew said.
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