* Sale process “robust” — Borders attorney
* Borders’ exclusivity period extended by bankruptcy judge
By Nick Brown
NEW YORK, June 2 (Reuters) - A judge gave Borders Group Inc BGPIQ.PK more time to come up with a plan to exit bankruptcy after a company lawyer said multiple potential suitors had expressed interest in buying the bulk of the bookseller’s stores.
The retailer’s sale process is “significantly more robust” than it was weeks ago, with “multiple parties” expressing interest in a majority or nearly all of its stores, the attorney, Andrew Glenn, said at a hearing in U.S. Bankruptcy Court in Manhattan on Thursday.
Private equity firm Gores Group is in talks to buy more than half of Borders’ remaining stores, the Wall Street Journal reported on Wednesday, citing people familiar with the matter. A Gores representative was not immediately available for comment on Thursday.
Glenn would not confirm the newspaper report, and a company spokesperson declined to comment.
Judge Martin Glenn granted Borders’ request to extend its exclusive window to file a proposal to bring the bookstore chain out of bankruptcy. The judge, no relation to Andrew Glenn, rejected opposition by the creditors’ committee.
Borders, which helped pioneer the concept of book superstores, filed for bankruptcy in February after years of falling sales made it impossible to manage its debt load.
Without the extension, the company’s exclusive time period to file a bankruptcy exit proposal would have expired June 16, allowing other groups to submit a reorganization or sale plan. The company asked for a 120-day extension. The judge did not immediately specify how much time he would grant.
Andrew Glenn said he believes the sale process could conclude in two to four weeks.
“We’ve been getting slaughtered in the press,” Glenn said, citing recent reports that the company has sought to end its long-time in-store cafe pact with Starbucks Corp (SBUX.O) unit Seattle’s Best Coffee. “We want to send a message to everyone that we’re proceeding along the right path, and will continue to proceed along the right path.”
The company said in May 19 court papers that it would terminate a 2004 partnership agreement with Seattle’s Best, whose cafes were in more than 400 Borders locations before Borders shuttered 225 stores prior to filing for bankruptcy.
Borders said running its own cafes or finding a new vendor would save it money and allow it to better tailor menus to its customers.
Seattle’s Best has objected to the move. The parties were expected to take up the issue in court later on Thursday.
While Seattle’s Best acknowledged that Borders has the right under insolvency rules to void its lease agreement, it took issue with language in Borders’ court papers that would allow Borders to keep operating Seattle’s Best cafes for 45 days after the termination.
The coffee maker said it did not want its trademarks being used to support a company that is looking to replace it as vendor.
The case is In re Borders Group Inc, U.S. Bankruptcy Court, Southern District of New York, No. 11-10614. (Reporting by Nick Brown; Editing by Martha Graybow and John Wallace)