Borders and a group of employees who had filed a class action suit against the bankrupt chain over being given insufficient notice before being laid off have reached a tentative deal. According to recent filings, both sides filed motions with the U.S. Bankruptcy Court in Manhattan requesting a settlement and creating a fund of $240,000. In the filing, attorneys for Borders and the class note that “due to the complex nature of the issues involved, the Parties recognize that the outcome of the WARN Action is uncertain.” By settling, Borders seeks to avoid “extensive, costly and uncertain litigation.”
The suit began this summer when employees let go in July and August sued for unpaid wages and benefits, charging that Borders had violated the Worker Adjustment Retraining and Notification (WARN) Act. Jared Pinsker served as class representative for approximately 300 employees.
Separately, with its going-out-of business sales largely over, Borders took in $400,000 in sales in the September 25-October 29 period with other income totaling $3 million. According to its monthly operating report for the period, the chain had net assets in liquidation at the end of the month of $150.8 million and liabilities of $851.7 million, leaving it with total liabilities of about $700 million
