In separate filings, landlords for about 50 Borders locations raised objections to the compressed time frame for the Borders auction, scheduled to take place on July 19 and to the lack of guarantees supplied for stalking horse bidder BB Brands, LLC, a newly formed subsidiary of Direct Brands. In addition, they note that there is no assurance that even if Brands is the successful bidder that it will operate any of the remaining 273 Borders stores.
The landlords say that the schedule submitted by Borders will force them to file blind objections, since they won’t have advance notice of which leases will be assumed or denied. It also sets a deadline less than 24 hours after the proposed sale hearing on July 21 to designate leases for assumption and assignment.
Under the proposed timetable, the key deadlines are: July 14, sale procedures hearing; July 17, bid deadline; July 19, auction; July 21, proposed sale hearing; July 22, deadline to designate leases for assumption & assignment.
If those in book publishing have been scrambling to learn more about how BB Brands might operate Borders going forward, should it choose not to close the stores, so are landlords, who are particularly concerned about the new company’s experience and capitalization. “The Debtors,” they note, “have provided no information with respect to the Stalking Horse Bidder’s, or any other potential assignee’s, structure, capitalization, principals or experience in the industry.” They are asking for assurance of future performance, as well as satisfaction of taxes, reconciliations, percentage rent, and other unbilled charges that may have accrued under the leases.
The objecting landlords are also requesting to be present at the auction. “Especially in light of the short timeframe for the sale, there is no legitimate reason to exclude Landlords,” they state.
All parties, landlords and publishers, have until noon today to file objections to the procedures, including the $6.4 million breakup fee that would go to Direct Brands, if it’s stalking horse bid is not the winner.