With the resurgence of the nation’s rabid appetite for news and information, the emergence of online shopping, and the advent of e-readers, with their promise of any book, any time, anywhere, as well as cheaper pricing, shoppers are now abandoning bookstores like Borders and Barnes & Nobles as they did music stores more than 10 years ago. Despite these troubles, however, the news isn’t all bad for companies like Borders, willing to seek the safe havens of a Chapter 11 bankruptcy.
This week a bankruptcy judge refused to throw the proverbial book at well-known retailer, Borders. This news comes as the nation’s number two bookseller attempts to reorganize so it can emerge from bankruptcy protection a smaller and profitable company. The hearing was held at the U.S. Bankruptcy Court for the Southern District of New York.
According to the Associated Press, “A judge on Tuesday granted Borders a 90-day extension to determine how many additional stores it will close as it reorganizes under bankruptcy protection. Borders said in February, when it filed for Chapter 11 reorganization, that it planned to close 200 stores. It now seeks to close up to 75 more, although the number is likely to be closer to 20 to 25, Borders spokeswoman Mary Davis said.”
This 90-day extension from the bankruptcy court means the Ann Arbor, Michigan-based national chain will get even more time to negotiate with landlords on an array of rental issues, including the renegotiation of more than 600 store lease arrangements. It also buys time for Borders as the company seeks to have a formal reorganization plan to present to its creditors by early April, even as it plans to exit bankruptcy later in the year. Even amid these tough financial times for all in the publishing and bookselling industries, through bankruptcy this particular storied retailer hopes to emerge from bankruptcy protection a smaller and profitable company.
The Borders bankruptcy is illustrative of how a Chapter 11 filing can help many companies adapt to a changing business landscape following our recent Great Recession. In the wake of the housing crisis, lingering consumer skittishness, drops in tourism and trade, and other economic woes, many industries have faced financial challenges, taking the businesses that serve them right along with it.
If your particular industry has been affected by the economic downturn, as in the case of Borders, Chapter 11 can buy you the right amount of time to reorganize the way you do business and get back to making better financial decisions. And buying you time to tweak your business model is part of what Chapter 11 is all about: diminishing debt while you save your means for a more profitable future.
Are you personally an active businessman or woman who is considering a new chapter for your business through the benefits of a Chapter 11 bankruptcy filing? Or are you an average American reading about the benefits of bankruptcy and want to learn how these types of benefits can help you? If you are seeking the broad protections of bankruptcy, it’s best to consult with a qualified attorney before filing. A qualified bankruptcy attorney is important during the bankruptcy process to help you navigate any uncertain waters and work in your best interests throughout the duration of the case, regardless of your status. The bankruptcy experts at the Law Offices of John T. Orcutt offer a totally FREE debt consultation and now, more than ever, it’s time to take them up on their offer. Just call toll free to 1-888-234-4181, or during the off hours, you can make your own appointment right online at www.billsbills.com. Simply click on the yellow “FREE Consultation Now” button.