As landlords of more than a hundred Borders locations continued to pile on their objections to the compressed time frame of the retailer’s proposed sales process and to ask for assurances that stalking horse bidder, BB Brands, a newly formed subsidiary of Direct Brands, can in fact afford to run the company as a going concern, Borders responded late yesterday afternoon saying the schedule is key to getting the best possible outcome.
“The Debtors seek to realize the highest possible value for the Debtors’ assets from a robust entity that will ensure the continuing viability of the business. The Debtors believe that BBB fits these criteria,” they noted. In addition, Borders’s attorneys pointed out that if they do not obtain an order approving the sale by July 22, they will be in default of the DIP Credit Agreement, which would prevent a sale and cause liquidation of the company.
Under the current time table, Thursday’s hearing should resolve any conflicts regarding the sales process, and on or before July 20 Borders will announce either that there was insufficient interest to conduct an auction or the results of that auction. A second hearing is slated for July 21.
Despite assurances that it will provide information on BB Brands at tomorrow’s hearing, Borders is clearly still concerned that the sales hearing could be lengthy and contentious. It has already moved several items off of tomorrow’s agenda, including compensation for both its attorneys and consultants and those of the Creditors Committee, which together total roughly $6.9 million with expenses of another $234,000.
One further problem could derail the sales process, money. Although Borders hasn’t filed its June profit and loss statement yet, some industry insiders say the troubled chain is almost out of cash.