Court allows auction of Borders real estate assets in two groups

August 10, 2011 04:30PM

Borders has received court permission to auction its name and real
estate assets, as it continues to go through its liquidation process,
Reuters reported. A U.S. bankruptcy judge gave Borders
permission to split its remaining leases into two
groups and hold auctions for them Aug. 31 and Sept. 13. The
first group comprises mainly leases that must be assumed or broken by
Sept. 30, as well as leases for some smaller stores. All leases
that do not fall into those categories would then be auctioned in the
second round. Hearings to approve the auction results would be
scheduled for Sept. 8 and Sept. 20, respectively.

Borders agreed to extend the deadlines after more than 20 landlords and
landlord groups complained that the initial plan gave them too
little time to evaluate if buyers could meet the obligations of the
acquired leases.

Even though some landlords objected to the speed of the process, the judge concluded it was important to move the liquidation along. He said that
landlords could still negotiate individual extensions with Borders.
Borders’ request to hold an auction for
intellectual property on Sept. 14, including its trademarks, website,
brand name and customer lists was approved, meaning the Borders brand could live on as an online-only store.

DJM Realty senior managing director James Avallone told The Real Deal
in July that while the two remaining Manhattan Borders stores could be
included in auctions, they might also be sold through an outside deal since the locations are likely to be very sought after.  [Reuters]