Borders Sets Deadline for Publishers
To Agree to Turn Debt into Loans
Published: 01/17/2011, Last Updated: 01/18/2011 04:13am
The financially troubled Borders Group has given publishers a deadline of February 1st to agree to a proposal that would turn delayed payment for shipments to the cash-strapped chain into loans. Borders decision to delay payments to publishers (see “Borders Delays Vendor Payments”) caused Diamond Book Distributors to stop shipping books to the Borders Group (see “Diamond Book Puts Borders on Hold”).
The New York Times is also reporting that the troubled chain, which has just hired bankruptcy lawyers (see “Borders Retains Bankruptcy Counsel”), is attempting to get “publishers to take up one-third of Borders’ reorganized debt” by transmuting the unpaid invoices into loans.
According to The Times, the publishers who are represented in their dealings with Borders by the Lowenstein Sandler law firm, view Borders’ plans for reorganization with some skepticism and “many publishers have said that they have completely stopped shipping books to Borders.”
Borders’ role as a key mainstream bookstore venue for sales of manga and graphic novels means that the fate of financially-challenged chain could have serious ramifications for publishers in those categories (see “Borders’ Woes a Blow to Manga”).
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