business closing

Borders set to ask court for liquidation approval

Borders Group Inc has been under bankruptcy protection since it filed in February, but now it looks as though the bookstore pioneer will have to officially close its doors. News of the possible closure has been passed through the media this entire week, but the corporation will officially ask the bankruptcy court today, Thursday, July 21 for permission to liquidate.

If the liquidation agreement were to be approved, it would provide somewhere between $250 million and $284 million which would be used to pay off as much of the debt owed to creditors as possible. Although the company would be liquidated, Borders Group Inc would retain the rights to its brand name and several leases that they hold. Those assets would then be auctioned off at a later undetermined date.

Liquidation was not the original plan for the company, but after a bidding deadline for the sale of nearly 30 store locations passed and the only possible deal fell through, the company’s hand was forced. The bookstore giant originally hoped that a private-equity firm called Najafi Cos would purchase the business for $215 million in cash and another $220 million in assumed liabilities. After the offer was announced, there was enough negative response and objection from several of the creditors with large amounts of money owed to them that the deal failed to be made.

As one of the largest business bankruptcies of the decade filled with record high filings, consumers and creditors alike await the decision of U.S. Bankruptcy Judge Martin Glenn that could close the 40-year-old business for good.

Source: Reuters, “Borders to seek court’s OK on plan to shut doors,” Nick Brown, 21 July 2011

Increased medical marijuana fees have Colorado businesses fretting

Despite some public opinions, Colorado medical marijuana dispensary owners have struggled to make ends meet. The businesses must comply with a series of strict regulations and requirements that make selling legal marijuana less lucrative as one might think.

A recent Colorado Springs City Council decision has dispensary owners and operators in the area stressing over whether or not they will make it through to the next year. Several have even considered closing their doors as an alternative to filing for bankruptcy.

The unanimous decision by the council to raise fees on medical marijuana business operation by imposing a $2,200 charge is the first of several proposed charges that could follow. The council also discussed extraneous charges of $1,800 that dispensary owners would be forced to pay.

The fee hike has several medical marijuana advocates reeling as they say it is a direct attack on type of business which ironically provides a large amount of revenue for the state. “I think this new fee is ludicrous,” said the President of Coloradans for Cannabis Patient Rights. “These businesses are barely breaking even as it is.”

According to the Colorado advocate, if the businesses are forced to close or go into serious debt as a result of the decision, it could have an effect on the area’s economy. An effect, that she claimed, the city failed to consider in their deliberations.

City officials reported that the new Colorado industry is in a “precarious situation” due to the fact that marijuana is still illegal on the federal level. One council-member said that the city is still figuring out how to handle the industry at all. Operating the industry from the city’s end costs a lot of money, claimed the council-member in support of the increased fees.

Source: The Colorado Independent, “Colorado Springs jacks medical marijuana fees,” Beatrice Santa-Wood, 5 July 2011