Random House is Owed $36.4 Million in Unsecured Debt in Borders Bankruptcy
Posted on November 9, 2011
Bloomberg reports that Random house has resolved the dispute over how much unsecured debt it has in the Borders bankruptcy proceedings. An agreement was reached between Borders Group, Inc. and Random House Inc. where Random has the right to try to collect up to $36.4 million in unsecured, non-priority debt. That knocks Random's original claim down by $800,000. The money is owed for books that Random shipped to Borders.
Borders is being liquidating, and it is yet to be determined how much of their debt that unsecured creditors will be paid. Most of Borders' inventory was sold to Hilco Merchant Resources and Gordon Brothers Retail Partners LLC. All 642 Borders stores have been either sold or closed since February. Now Borders will have to see how many cents on the dollar it will be paid when the dust settles. It is likely that Random House is going to take a huge hit on this one.
