Borders Resolves Random House Debt With $36.4 Million Claim
Borders Group Inc., the bankrupt bookseller, resolved a dispute with Random House Inc. by giving the publisher the right to try to collect as much as $36.4 million.
Under the agreement, filed in U.S. Bankruptcy Court in Manhattan yesterday, Random House will receive an unsecured, non-priority claim worth about $800,000 less than the publisher originally said it was owed for books it supplied to the chain.
The agreement doesn’t guarantee Random House, a unit of Guetersloh, Germany-based Bertelsmann AG, will be paid $36.4 million. The publisher will be able to submit its claim for payment without having to fight over the amount. The size of any payment will depend on how much money is available to pay all creditors once Borders finishes liquidating.
Once the second-largest bookstore chain after Barnes & Noble Inc. (BKS), Borders began liquidating its stores in July under a deal that sold most of its inventory to Hilco Merchant Resources and Gordon Brothers Retail Partners LLC.
Borders, based in Ann Arbor, Michigan, had 642 stores when it entered bankruptcy in February and operated 399 when the liquidation began. It listed assets of $1.28 billion and liabilities totaling $1.29 billion.
The case is In re Borders Group Inc., 11-10614, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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