The last of the big pieces of Borders are about to go on the auction block. At Wednesday’s hearing at U.S. Bankruptcy Court, Judge Martin Glenn approved the auction of its leases on August 31 for small-format stores and on September 13 for superstores. That’s just one day ahead of the September 14 auction for the company’s trademarks, Web site, and other intellectual property.
According to Borders attorney Daniel Zinman of Kasowitz, Benson, Torres, and Friedman, the small-format stores and airport stores have already been emptied by the latest round of store-closing sales. In advance of the auctions, Borders received approval for the termination of the vacant Seattle/Tacoma International Airport store for $70,000. Zinman said that the airport is eager to reopen the store quickly and will bring in a local bookseller. The lease for the 26,000 sq. ft. Columbus Circle store was also approved for $1.25 million and waiver of pre-petition claims. The landlord also agreed to extend Borders’s lease until October 14 so that it can finish its store-closing sale there.
Other monies coming into the estate include a buyout, approved today, for the Harrisburg DC for $482,000. Creditors Committee attorney Paul Kizel of Lowenstein Sandler reported that there were late developments in the case of the Torrance, Calif., store. Instead of Kin Mortgage’s proposed $2.9 million and a participation interest, the Committee was able to negotiate $3.3 million with no participation. Then late last night the landlord expressed interest in bettering that.
While money is coming in, one reason for the lease auctions to take place sooner than later is to avoid paying October rent. However, until the store closings and auctions are completed, it’s not clear just how much money will be left to pay publishers.