Case Study

Provided financing as well as inventory and real estate disposition services as part of a guaranteed exit solution for this major bookseller.

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By The Numbers

Throughout a complex and prolonged wind down process, we provided financial and operational support to Borders and its lenders as the company faced ultimately unsurmountable competitive pressures. In 2010, Borders, the second largest bookseller in North America, was struggling against the expansion of e-books and the migration of print book sales online through e-commerce competitors. To support the business as it attempted to restructure, our debt investment partner, Gordon Brothers Finance Company provided $10 million of a $90 million financing package. When Borders ultimately failed to reverse its declining performance and filed bankruptcy in 2010, the loan was converted to a $55 million debtor in possession (DIP) facility to fund the company’s disposition. The bankruptcy estate looked to Gordon Brothers to lead the joint venture that undertook the wind down. In order for the estate to pay the bank’s outstanding position, we offered an upfront guarantee supported by the revenue generated by the sale. To provide additional value to the estate, we invested our own capital to source additional inventory to complement the existing merchandise. We also obtained lease modifications on approximately 150 locations to minimize project expenses and disposed of all leases at the close of the sale.