================================================================= BORDERS GROUP BANKRUPTCY NEWS Issue Number 6 ----------------------------------------------------------------- Copyright 2011 (ISSN XXXX-XXXX) March 16, 2011 ----------------------------------------------------------------- Bankruptcy Creditors' Service, Inc. 215-945-7000 FAX 215-945-7001 ----------------------------------------------------------------- BORDERS GROUP BANKRUPTCY NEWS is published by Bankruptcy Creditors' Service, Inc., 572 Fernwood Lane, Fairless Hills, Pennsylvania 19030, on an ad hoc basis (generally every 10 to 20 days) as significant activity occurs in the Debtors' cases. New issues are prepared by Michille P. Deiparine, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Subscription rate is US$45 per issue. Any re-mailing of BORDERS GROUP BANKRUPTCY NEWS is prohibited. ================================================================= IN THIS ISSUE ------------- [00075] DEBTORS' MOTION TO OBTAIN $505-MIL. IN DIP FINANCING [00076] DEBTORS' 1ST MOTION TO EXTEND LEASE DECISION PERIOD [00077] DEBTORS' MOTION TO CONTINUE TO HONOR INSURANCE PROGRAMS [00078] DEBTORS' MOTION TO PAY PREPETITION TAXES [00079] DEBTORS' MOTION TO HONOR PREPETITION VENDOR OBLIGATIONS [00080] DEBTORS' MOTION FOR INJUNCTION AGAINST UTILITY COMPANIES [00081] DEBTORS' MOTION TO ESTABLISH LEASE REJECTION PROCEDURES [00082] DEBTORS' MOTION FOR INTERIM COMPENSATION PROCEDURES [00083] DEBTORS' MOTION TO EMPLOY ORDINARY COURSE PROFESSIONALS [00084] DEBTORS' MOTION TO HIRE AP SERVICES AS CRISIS MANAGERS [00085] DEBTORS' APPLICATION TO EMPLOY KASOWITZ BENSON AS COUNSEL [00086] DEBTORS' APPLICATION TO HIRE DICKINSON WRIGHT AS COUNSEL [00087] DEBTORS' APPLICATION TO TAP BAKER & MCKENZIE AS COUNSEL [00088] DEBTORS' APPLICATION TO TAP JEFFRIES AS INVESTMENT BANKER [00089] DEBTORS' APPLICATION TO EMPLOY DJM REALTY AS REALTOR [00090] DEBTORS' APPLICATION TO HIRE GCG AS ADMINISTRATIVE AGENT [00091] TOYS CENTER'S MOTION TO COMPEL POSTPETITION RENT PAYMENT [00092] DELL MARKETING'S MOTION TO LIFT STAY TO ALLOW SET-OFF [00093] ENTITIES FILE NOTICES OF SUBSTANTIAL STOCK OWNERSHIP [00094] VENDORS FILE NOTICES OF RECLAMATION DEMAND [00095] RULE 2019 STATEMENT -- Cole, Schotz, Meisel, Forman [00096] RULE 2019 STATEMENT -- Levett Rockwood P.C. [00097] RULE 2019 STATEMENT -- McCarthy & White, PLLC [00098] RULE 2019 STATEMENT -- Russell R. Johnson III, PLC [00099] RULE 2019 STATEMENT -- Womble Carlyle Sandridge & Rice KEY DATE CALENDAR ----------------- 02/16/11 Voluntary Chapter 11 Petition Date 02/24/11 U.S. Trustee Appoints Official Creditors' Committee 03/18/11 Deadline to Provide Utilities with Adequate Assurance 03/22/11 First Meeting of Creditors under 11 USC Sec. 341 04/05/11 Deadline to File Schedules of Assets and Liabilities 04/05/11 Deadline to File Statement of Financial Affairs 04/05/11 Deadline to File Lists of Contracts and Leases 05/17/11 Deadline to Remove Actions Pursuant to F.R.B.P. 9027 06/16/11 Expiration of Debtors' Exclusive Plan Proposal Period 08/15/11 Expiration of Debtors' Exclusive Solicitation Period 09/14/11 Deadline to Make Decisions About Lease Dispositions 02/15/13 Deadline for Debtors' Commencement of Avoidance Actions Bar Date for filing Proofs of Claim ----------------------------------------------------------------- [00075] DEBTORS' MOTION TO OBTAIN $505-MIL. IN DIP FINANCING ----------------------------------------------------------------- See prior entries at [00061], [00049] and [00015] and prior related entries at [00050] and [00016] (Debtors' Motion for Authority to Use Cash Collateral) and [00031] and [00014] (Borders Get Interim Access to $400-Mil. in DIP Financing). Court to Approve DIP Financing Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York said he will grant final approval of Borders Group, Inc. and its debtor affiliates' motion to borrow up to $505 million in postpetition financing after changes to the initial agreement with the lenders are approved and filed with the Court, Tiffany Kary of Bloomberg News reports. "When I look at the incremental cost of new money coming in, it's pretty steep," Judge Glenn commented at a March 15, 2011, hearing, Bloomberg notes. The loan nonetheless appeared to be the best available option for Borders, Judge Glenn said, according to the report. Counsel to the Debtors, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, told Judge Glenn at the hearing that the Debtors must have credit because "without that, it can't survive," Bloomberg relays. The DIP Credit Agreement contemplates financing of a $450,000,000 Working Capital Facility and a $55,000,000 Term Loan B Facility. The Working Capital Facility is further comprised of a $410,000,000 million revolver credit facility, a $20,000,000 "first in last out" term loan, and an additional $20,000,000 cash management facility. The Debtors have previously been granted interim access of up to $400,000,000 of the DIP Loan Facility. As of March 14, 2011, objections to the final approval of the DIP Loan Motion filed by Bell County and County of Denton, Burleson ISD, City of Burleson, City of Colleyville, Grapevine-Colleyville ISD, City of Grapevine, Clear Creek ISD, Woodlands Metro MUD, Woodlands RUD #1, and Baybrook MUD #1; Lewisville Independent School District; and Verizon Communications, Inc. have been consensually resolved, Mr. Friedman related in a notice filed with the Court. Mr. Friedman further disclosed that the parties have reached a tentative agreement resolving the Official Committee of Unsecured Creditors' objection to the DIP Loan Motion. ----------------------------------------------------------------- [00076] DEBTORS' 1ST MOTION TO EXTEND LEASE DECISION PERIOD ----------------------------------------------------------------- See prior entry at [00062]. Court Grants Extension Judge Glenn extended the Debtors' time to assume or reject unexpired non-residential real property leases, through and including the earlier of (i) the effective date of a plan of reorganization, or (ii) September 14, 2011. The extension, however, does not apply to the Debtors' 200 closing stores, a list of which is available for free at: http://bankrupt.com/misc/Borders_ClosingStores.pdf Judge Glenn also authorized the Debtors to enter into stipulations with landlords of unexpired leases, which consent to extend the time for Debtors to assume or reject those Unexpired Leases in accordance with Section 365(d)(4) of the Bankruptcy Code. Upon filing with the Court, those stipulations will automatically become final 10 days after, absent any timely objections filed. The Period Extensions provided for in each Stipulation filed with the Court are granted pursuant to Section 365(d)(4)(B)(ii). Judge Glenn clarified that the inclusion of an agreement or a party to the list of Unexpired Leases to the Lease Decision Extension Motion will not constitute an admission by the Debtors that the agreement, or any agreement with that party, is an Unexpired Lease within the meaning of Section 365 of the Bankruptcy Code, or that it is necessarily a binding and enforceable contract. The Debtors also retain the right to identify additional parties to non-residential real property leases, and any of those parties and leases will be subject to the terms of the Court's order, notwithstanding the fact that the party or lease was not previously listed in the Unexpired Leases schedule, Judge Glenn ruled. Nothing in the Court's recent ruling impairs the ability of (i) the Debtors or appropriate party-in-interest to contest any claim of any creditor pursuant to applicable law or otherwise dispute, contest, setoff, or recoup any claim, or assert any rights, claims or related defenses; and (ii) a landlord from seeking relief from the extension granted based on facts arising after the date of the Court order. As of March 14, 2011, the objections of First Interstate Mentor Centers, L.P. and Ledgewood Equities, LLC; Macerich Company, et al.; Coventry Retail, L.P.; Camino Real Limited Liability Company; Westfield, LLC; Simon Property Group, Inc.; and TigrisWoods, LLC have been consensually resolved, counsel to the Debtors, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, notified the Court. He added that the Debtors attempted to resolve the remaining objections prior to the March 15, 2011, hearing. * * * In a related development, the Debtors continue to negotiate with their landlords for rent concessions, Greta Guest of The Detroit Free Press reported. The report noted that Borders has 633 store leases to renegotiate and would be closing 75 more stores. Border is using the store closing as leverage to bring rents down, Ms. Guest related. While a number of landlords opposed the Debtors' request to extend their deadline to assume or reject unexpired leases, certain landlords believe the extension will help the Debtors to refine their restructuring options with respect to their lease portfolio and express openness to negotiate with the Debtors, The Detroit Free Press noted. Paul Magy, Esq., counsel to 28 landlords, commented that how Borders handles its leases with have a lot to do with whether it can survive post-Chapter 11, The Detroit Free Press relayed. "They have to look to the future and figure how to compete after bankruptcy," Mr. Magy said, according to the report, adding, "they are using the time and process that bankruptcy affords to refine that idea and then propose it." Chuck Miller, president of Chuck Miller Development, said he is willing to work something out with Borders, but he would need lender's approval before making any concessions, The Detroit Free Press added. ----------------------------------------------------------------- [00077] DEBTORS' MOTION TO CONTINUE TO HONOR INSURANCE PROGRAMS ----------------------------------------------------------------- See prior entry at [00032]. The Court authorized the Debtors, on a final basis, to: (1) pay, in their sole discretion, all Insurance Obligations, including without limitation, all premiums, claims, deductibles, administrative fees and expenses, brokers' fees, and all other costs, charges, and obligations arising under the Insurance Policies, including those Insurance Obligations that were or become due and payable before or after the Petition Date; (2) maintain their Insurance Policies without interruption, on the same basis, and in accordance with the same practices and procedures that were in effect prior to the Petition Date; (3) renew their Insurance Policies or obtain replacement coverage, as needed, in the ordinary course of business; (4) enter into postpetition premium financing agreements or PFAs related to the Insurance Policies and new insurance policies, as needed, in the ordinary course of business; (5) pay AFCO Premium Credit LLC all sums due pursuant to the AFCO PFA, a schedule of which is available for free at: http://bankrupt.com/misc/Borders_AFCOOwedAmts.pdf (6) maintain and administer their Workers' Compensation Programs in the ordinary course of business and honor and pay all claims and other related costs and expenses related, whether arising before or after the Petition Date. The Debtors' banks are authorized and directed to receive, honor, process, and pay, to the extent of funds on deposit, any and all checks or electronic transfers drawn on the Debtors' bank accounts relating to the Insurance Obligations, including those checks or electronic transfers that have not been cleared by the Banks as of the Petition Date. Nothing in the Court's order or the Debtors' Motion will be construed as prejudicing the rights of the Debtors to dispute the amount of or basis for any claims against the Debtors in connection with the Debtors' Insurance Policies. To the extent any Insurance Program or any related contract is deemed an executory contract within the meaning of Section 365 of the Bankruptcy Code, neither the order nor any payments made in accordance with the Final Order will constitute the postpetition assumption of any Insurance Program, contract or related agreement pursuant to Section 365, Judge Glenn added. ----------------------------------------------------------------- [00078] DEBTORS' MOTION TO PAY PREPETITION TAXES ----------------------------------------------------------------- See prior entry at [00026]. Judge Glenn authorized the Debtors, on a final basis, to pay all prepetition taxes and assessments to all taxing authorities as set forth in the Debtors' Motion that are determined (i) presently to be owed or assessed, or (ii) at a time subsequent to the entry of the Court's order to be owed and assessed. The Debtors are also authorized to make payments due and owing to third party administrators in connection with the assessment of taxes and to continue those payments in the ordinary course of business. The Debtors' banks are authorized and directed to receive, honor, process, and pay, to the extent of funds on deposit, any and all checks or electronic transfers drawn on the Debtors' Bank Accounts relating to the Taxes and Assessments, including those checks or electronic transfers that have not been cleared by the Banks as of the Petition Date. The Debtors are directed to immediately serve via first class mail the Final Prepetition Taxes Order on the Taxing Authorities. Nothing in the Final Prepetition Taxes Order or the Debtors' Motion waives or releases any rights the Debtors have to contest the amount of or basis for any Taxes and Assessments allegedly due any Taxing Authority, Judge Glenn held. ----------------------------------------------------------------- [00079] DEBTORS' MOTION TO HONOR PREPETITION VENDOR OBLIGATIONS ----------------------------------------------------------------- See prior entry at [00024]. The Court authorized the Debtors, on a final basis, to make payments with respect to all valid, undisputed Distribution Network Vendor Claims and Miscellaneous Lien Claims, whether relating to the period before or after the Petition Date, as they determine to be necessary or appropriate to obtain the release of Retail Goods or liens against their real or personal property. All applicable banks are authorized and directed, at the Debtors' instruction, to receive, honor, process, and pay, to the extent of funds on deposit, any and all checks or electronic transfers drawn on the Debtors' bank accounts relating to the Distribution Network Vendor Claims or Miscellaneous Lien Claims, including those checks or electronic transfers that have been not cleared by the Banks as of the Petition Date. The Debtors are authorized to pay all prepetition accrued but unpaid service and administrative fees due to third party vendor Interstate Freight, Inc., and to continue those payments in the ordinary course postpetition. Nothing in the Court's Final Order will be construed as prejudicing the rights of the Debtors to dispute or contest the amount of or basis for any claim against the Debtors arising in connection with, or relating to, the Distribution Network Vendor Claims or Miscellaneous Lien Claims, Judge Glenn held. Likewise, nothing contained in the Debtors' Motion or the Final Order will be deemed: (i) an assumption, adoption, authorization to assume, or rejection of any executory contract or agreement between the Debtors and any third party pursuant to Section 365 of the Bankruptcy Code; (ii) a requirement that the Debtors make any of the payments authorized; or (iii) a waiver of the Debtors' rights under the Bankruptcy Code or any other applicable law. ----------------------------------------------------------------- [00080] DEBTORS' MOTION FOR INJUNCTION AGAINST UTILITY COMPANIES ----------------------------------------------------------------- See prior entries at [00064] and [00034]. Court to Approve Utility Injunction Motion At a hearing held on March 15, 2011, Judge Glenn said he would approve the Debtors' motion for injunction against utility companies with some revisions, Tiffany Kary of Bloomberg News related. Judge Glenn also pointed to Jeffrey Gleit, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, that the Debtors' motion is "taken almost verbatim" from a motion for injunction against utility companies in Blockbuster's bankruptcy case drafted by Weil, Gotshal & Manges LLP, but that Mr. Gleit did not cite Weil, Bloomberg related. As a result, Judge Glenn prohibited Kasowitz Benson from charging fees for its work on the Debtors' Motion, including those for inserting the Borders case caption on a Weil pleading, Bloomberg noted. Mr. Gleit, a former Weil associate, apologized to Judge Glenn for his mistake, saying that he often sees passages he drafted in Weil's motions, Bloomberg stated. As of March 14, 2011, the objections of Nevada Power Company; Public Service Company of New Mexico; Potomac Electric Power Company, Florida Power & Light Company, Entergy, Delmarva Power, Central Maine Power Company, and Atlantic City Electric; and Puerto Rico Electric Power Authority have been consensually resolved, according to the Debtors' counsel, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York. Mr. Friedman further disclosed that the hearing on the objection of Allegheny Power has been consensually adjourned until April 7, 2011. A formal order on the Utility Motion has yet to be entered by the Court. * * * Public Service of Company of New Mexico withdrew its objection and incorporated memorandum of law, citing that it has resolved its dispute with the Debtors via a settlement. ----------------------------------------------------------------- [00081] DEBTORS' MOTION TO ESTABLISH LEASE REJECTION PROCEDURES ----------------------------------------------------------------- See prior entry at [00065] and [00035]. Counsel to the Debtors, David M. Friedman, Esq., at Kasowitz, Benson, Torres & Friedman LLP, in New York, disclosed that as of March 14, 2011, all formal and informal objections to the Debtors' request for the establishment of uniform lease rejection procedures have been resolved. ----------------------------------------------------------------- [00082] DEBTORS' MOTION FOR INTERIM COMPENSATION PROCEDURES ----------------------------------------------------------------- See prior entry at [00038]. Motion granted. Judge Glenn ruled that each retained professional in the Debtors' cases may seek, in its first request for allowance of fees and reimbursement of expenses, fees and expenses incurred during the period beginning on the date of that Retained Professional's retention and ending on March 31, 2011. The Debtors will include all payments to Retained Professionals on their monthly operating reports. Any party may object to requests for payments of interim compensation on the grounds that the Debtors have not timely filed monthly operating reports; not remained current with their administrative expenses and fees under Section 1930 of Title 28 of the U.S. Code; or a manifest exigency exists by seeking a further order of the Court. Otherwise, the Court's order will remain in effect during the pendency of the Debtors' Chapter 11 cases. ----------------------------------------------------------------- [00083] DEBTORS' MOTION TO EMPLOY ORDINARY COURSE PROFESSIONALS ----------------------------------------------------------------- See prior entry at [00037]. Judge Glenn authorized the Debtors to employ, nunc pro tunc to the Petition Date, 24 ordinary course professionals, a list of which is available for free at: http://bankrupt.com/misc/Borders_ApprovedOCPList.pdf The Court also approved proposed procedures to govern the retention of the OCPs. Every 90 days commencing from March 15, 2011, the date of entry of the Court's OCP order, the Debtors are required to file with the Court a statement, and serve the statement on the reviewing parties, specifying: (a) the name of the OCP, (b) for each month during the relevant period, the amounts paid as fees for services rendered and as reimbursement of expenses incurred by the OCP, and (c) the aggregate amount paid to date to the OCP. The first statement is due on June 13, 2011. The Debtors reserve the right to seek to amend the monthly compensation limitations set forth in the OCP order upon notice and hearing. Judge Glenn clarified that the OCP Order does not apply to any professional retained by the Debtors pursuant to a separate order of the Court. ----------------------------------------------------------------- [00084] DEBTORS' MOTION TO HIRE AP SERVICES AS CRISIS MANAGERS ----------------------------------------------------------------- See prior entry at [00039]. Holly Etlin Replaces Ken Hiltz as SVR Pursuant to a supplement filed with respect to their application to employ AP Services LLC as crisis managers, the Debtors informed the Court that they appointed Holly Felder Etlin as senior vice president for restructuring, replacing Ken Hiltz, on February 18, 2011. Ms. Etlin's appointment as SVR is set forth in an amendment to the APS engagement letter dated February 23, 2011, a copy of which is available for free at: http://bankrupt.com/misc/Borders_AP1stAmndmnt.pdf Borders Group, Inc. Chief Financial Officer Scott Henry notes that other than the appointment of Ms. Etlin as SVR, each of the terms and conditions of APS' proposed employment by the Debtors pursuant to the APS Application remains the same. Ms. Etlin, a managing director of AlixPartners, LLP -- hetlin@alixpartners.com -- filed a supplemental declaration to make these disclosures: * A current AlixPartners employee has a relative that is a replenishment analyst with the Debtors. * Agree Development Company, a landlord to the Debtors, is a former AlixPartners clients in matters unrelated to the Debtors. * Charles Letts, a creditor of the Debtors, is the previous employer of a current AlixPartners employee. * Cincinnati Bell, a utility provider to the Debtors, is a current AlixPartners client in matters unrelated to the Debtors. * HarperCollins Publishers, a creditor and vendor to the Debtors, is a vendor to AlixPartners. * Rosetta Stone Ltd., a creditor to the Debtors, is a vendor to AlixPartners. * YRC, a vendor to the Debtors, is a related party to a former AlixPartners client in matters unrelated to the Debtors. An affiliate, YRC Worldwide, is a vendor to AlixPartners. Despite the disclosures made, Ms. Etlin maintains that AP Services remains a "disinterested person" as the term is defined under Section 101(14) of the Bankruptcy Code. The Debtors filed with the Court a revised proposed order reflecting Ms. Etlin's appointment, a copy of which available for free at http://bankrupt.com/misc/Borders_APRevPropOrd.pdf ----------------------------------------------------------------- [00085] DEBTORS' APPLICATION TO EMPLOY KASOWITZ BENSON AS COUNSEL ----------------------------------------------------------------- See prior entries at [00068] and [00040]. Application approved. The Court granted the Debtors authority to employ Kasowitz, Benson, Torres & Friedman LLP as their bankruptcy counsel. Before the entry of the Court's ruling, David M. Friedman, Esq., a partner at Kasowitz, Benson, Torres & Friedman LLP, filed a supplemental declaration to disclose that his firm represents Verizon Wireless, an affiliate of one of the Debtors' utility providers, in matters unrelated to the Debtors' Chapter 11 cases. The amount billed in 2010 to Verizon is well below 1% of Kasowitz Benson's annual revenue for that year, and the same will be true for 2011, he said. He assured the Court that the Verizon representation is in no way adverse, or even related, to the Debtors, and that the firm remains a "disinterested person" as defined under Section 101(14) of the Bankruptcy Code. ----------------------------------------------------------------- [00086] DEBTORS' APPLICATION TO HIRE DICKINSON WRIGHT AS COUNSEL ----------------------------------------------------------------- See prior entry at [00069]. Application approved. ----------------------------------------------------------------- [00087] DEBTORS' APPLICATION TO TAP BAKER & MCKENZIE AS COUNSEL ----------------------------------------------------------------- See prior entry at [00041]. In further support of the Debtors' Application, Craig A. Roeder, Esq., a partner at Baker & McKenzie LLP, clarifies that certain identified parties are not clients of the firm or affiliates of clients that represent more than 1% of the firm's annual revenues over the past 12 months. A list of the Identified Parties is available for free at: http://bankrupt.com/misc/Borders_BakerNonClients.pdf To incorporate the Roeder supplemental declaration, the Debtors filed with the Court a revised proposed order regarding their application to employ Baker & McKenzie, a copy of which is available for free at: http://bankrupt.com/misc/Borders_BakerRevPropOrd.pdf Judge Glenn signed the revised proposed order on March 15, 2011. Accordingly, the Debtors are permitted to tap Baker & McKenzie as one of their counsel in their ongoing bankruptcy cases. ----------------------------------------------------------------- [00088] DEBTORS' APPLICATION TO TAP JEFFRIES AS INVESTMENT BANKER ----------------------------------------------------------------- See prior entry at [00042]. The Debtors filed with the Court a revised proposed order regarding their application to employ Jefferies & Company, Inc., a copy of which is available for free at: http://bankrupt.com/misc/Borders_JefferiesRevPropOrd.pdf The Debtors also submitted a copy of an amended and restated engagement letter, correcting an earlier version of the Engagement Letter, which was inadvertently attached to the Debtors' Application. A full-text copy of the amended engagement letter is available for free at: http://bankrupt.com/misc/Borders_AmEngagementLtr.pdf ----------------------------------------------------------------- [00089] DEBTORS' APPLICATION TO EMPLOY DJM REALTY AS REALTOR ----------------------------------------------------------------- See prior entry at [00043]. The Debtors filed with the Court a revised proposed order on their application to employ DJM Realty Services, LLC. The revised proposed order provides that the U.S. Trustee for Region 2 and the Official Committee of Unsecured Creditors will be entitled to review applications for payment of fees and expenses to DJM pursuant to Section 330 of the Bankruptcy Code. DJM will also apply 50% of each $100,000 monthly fee paid postpetition as a credit against other fees earned pursuant to the services agreement, provided that no credit will be applied from the first four $100,000 monthly fee payments received after the Petition Date. If the Debtors and DJM determine that the firm should provide Additional Services, DJM will provide a two-day notice by e-mail of the agreement to the U.S. Trustee and the Creditors' Committee. A blacklined version of the revised order, reflecting changes made to the original proposed order, is available for free at: http://bankrupt.com/misc/Borders_DJMRevPropOrd_blacklined.pdf ----------------------------------------------------------------- [00090] DEBTORS' APPLICATION TO HIRE GCG AS ADMINISTRATIVE AGENT ----------------------------------------------------------------- See prior entry at [00045] and prior related entry at [00044] (Debtors' Application to Hire Garden City as Notice Agent). The Debtors filed with the Court a revised proposed order on the employment application of The Garden City Group as administrative agent, a copy of which is available for free at: http://bankrupt.com/misc/Borders_GCGRevPropPrd.pdf Judge Glenn signed the revised proposed order on March 15, 2011. ----------------------------------------------------------------- [00091] TOYS CENTER'S MOTION TO COMPEL POSTPETITION RENT PAYMENT ----------------------------------------------------------------- Toys Center, LLC and the Debtors are parties to a lease agreement, whereby the Debtor operated a book store at leased premises located at 609 West Francisco Blvd., in San Rafael, California. The base rent under the Lease is $62,500 per month. As of the Petition Date, the Debtors owed Toys Center $62,500 for rent for February 2011. Under the Lease Agreement, rent is due in advance on the first day of each month. The Debtor has failed to pay the February 2011 rent or the full amount of postpetition rent due under the Lease from and after February 16, 2011, despite demand, Toys Center complains. The rent due for the period from February 16 to 28, 2011, is $29,017, according to Toys Center. Accordingly, by this motion, Toys Center asks the Court to compel the Debtors' payment of all postpetition rent due under the 609 West Lease from February 16, 2011, through and including the date the Lease is assumed and thereafter. In the alternative, Toys Center asks the Court to find that the Lease is rejected and require the Debtors to relinquish the premises to the landlord without the need for state court legal action. Marc. D. Coopersmith, Esq., at Hedstrom & Coopersmith, LLP, in Petaluma, California -- mcoopersmith@handclawfirm.com -- asserts that Toys Center is entitled to an administrative priority claim under Section 503(b) of the Bankruptcy Code because the use of the Premises provided value to the Debtors' estates for $62,5000 per month. In addition to payment of the rent, the Debtors should also reimburse Toys Center for the costs associated with bringing its Motion to Compel, he avers. ----------------------------------------------------------------- [00092] DELL MARKETING'S MOTION TO LIFT STAY TO ALLOW SET-OFF ----------------------------------------------------------------- See prior entry at [00053]. Dell Marketing filed with the Court an amended notice of its lift stay request. No changes were made to the Lift Stay Motion. The Debtors subsequently informed the Court on March 14, 2011, that the Dell Marketing matter has been resolved. The Debtors said they will submit a proposed form to the Court at a March 15, 2010 hearing. ----------------------------------------------------------------- [00093] ENTITIES FILE NOTICES OF SUBSTANTIAL STOCK OWNERSHIP ----------------------------------------------------------------- See prior related entry at [00033] (Debtors' Motion to Set Up Claims Trading Protocol). Three Entities File Stock Ownership Notices Pershing Square Capital Management, L.P., LeBow Limited Partnership, and UBS AG filed with the Court notices of substantial ownership of stock in Borders Group, Inc., and its debtor affiliates. Pershing Square Capital informed the Court that it owns shares of Borders common stock and options to acquire shares on behalf of these entities: * 100 shares of Borders common stock and options to acquire 10,274,798 shares of Borders common stock for the account of Pershing Square, L.P.; * 79,433 shares of Borders common stock and options to acquire 141,723 shares of Borders common stock for the account of Pershing Square II, L.P.; * 10,518,447 shares of Borders common stock for the account of Pershing Square International, Ltd.; and * 15,527,715 options to acquire Borders common stock for the account of BGP Holdings Corp. LeBow noted that it owns shares of Borders common stock and options to acquire Borders common stock shares, but redacted the specific number of shares. UBS AG stated that it owns 3,294,920 shares of Borders common stock on various dates. ----------------------------------------------------------------- [00094] VENDORS FILE NOTICES OF RECLAMATION DEMAND ----------------------------------------------------------------- In separate filings, three vendors of the Debtors filed with the Court demands for reclamation goods pursuant to Section 546(c) of the Bankruptcy Code. They are: Source Interlink Companies, Inc. $10,775,889 Oxford University Press, Inc. 89,805 Thomas Nelson Publishers 52,027 The publishers assert that the Debtors are instructed to immediately make an inventory of the goods, keep the goods segregated from all other inventory, and provide a summary to each of the publishers disclosing the status of all goods. ----------------------------------------------------------------- [00095] RULE 2019 STATEMENT -- Cole, Schotz, Meisel, Forman ----------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Kenneth L. Baum, Esq., at Cole, Schotz, Meisel, Forman & Leonard, P.A., in Hackensack, New Jersey -- kbaum@coleschotz.com -- informed the Court that his firm represents Gabrellian Associates and Faber Bros. in the Debtors' Chapter 11 cases: Gabrellian's business address is 95 Route 17 South, Paramus, New Jersey 07652. Gabrellian is the landlord of a Borders store located at Interstate Shopping Center, Franklin Turnpike and Route 17, Ramsey, New Jersey. Faber Bros. is lessor of a Borders store located at Paramus Towne Square, Route 17 North, in Paramus, New Jersey. Cole Schotz has no independent claims against or interests in the Debtors, Mr. Baum maintains. ----------------------------------------------------------------- [00096] RULE 2019 STATEMENT -- Levett Rockwood P.C. ----------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Stephen H. Gross, Esq., at Levett Rockwood P.C., in Westport, Connecticut -- sgross@levettrockwood.com -- disclosed that his firm represents these creditors in the Debtors' Chapter 11 cases: * Dell Marketing, LP c/o Streusand & Landon, LLP 811 Barton Springs Rd., Ste. 811 Austin, Texas 78704 * TigrisWoods, LLC d/b/a The Stores at Riverwoods c/o Jones Waldo 170 S. Main Street, #1500 Salt Lake City, UT 84101 Each of the creditors has claims arising from the transaction of personal property leasing matter and commercial real estate leasing matters with the Debtors, Mr. Gross relates. Levett Rockwood P.C. has no independent claims against, or interest in, the Debtors, Mr. Gross assures the Court. ----------------------------------------------------------------- [00097] RULE 2019 STATEMENT -- McCarthy & White, PLLC ----------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, William Douglas White, Esq., at McCarthy & White PLLC, in McLean, Virginia -- wdw@mccarthywhite.com -- disclosed that his firm represents these parties in the Debtors' Chapter 11 cases: (A) Florida Power & Light Company Rachel Budke 700 Universe Boulevard Juno Beach, Florida 33408 (B) Entergy Gulf States Louisiana, LLC; Entergy Louisiana, LLC; Entergy Mississippi, Inc.; Entergy New Orleans, Inc.; and Entergy Texas, Inc. Alan H. Katz, Esquire 639 Loyola Avenue New Orleans, Louisiana 70113 (C) Central Maine Power Company Steve Cope Cope Law Firm P.O. Box 1398 Portland, Maine 04104-1398 (D) Potomac Electric Power Company, Atlantic City Electric, Delmarva Power Jack Strausman 701 Ninth Street NW Tenth Floor Washington, DC 20068 Each of the parties is a prepetition creditor of the Debtors and has claims arising from the provision of utility services in the period immediately before the Petition Date, according to Mr. White. ----------------------------------------------------------------- [00098] RULE 2019 STATEMENT -- Russell R. Johnson III, PLC ----------------------------------------------------------------- Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure, Russell R. Johnson III, at Russell R. Johnson III, PLC, in Richmond, Virginia, informed the Court that his firm represents these utility companies in the Debtors' Chapter 11 cases: * Commonwealth Edison Company and PECO Energy Company * The Connecticut Light and Power Company, Yankee Gas Services Company and Public Service Company of New Hampshire * Virginia Electric and Power Company d/b/a Dominion Virginia Power, Dominion Hope, and The East Ohio Gas Company d/b/a Dominion East Ohio * Florida Power Corp. d/b/a Progress Energy Florida and Carolina Power & Light Company d/b/a Progress Energy Carolinas, LLC * Consolidated Edison Company of New York, Inc. and Orange & Rockland Utilities, Inc. * Georgia Power Company * San Diego Gas & Electric Company * Toledo Edison Company, The Cleveland Electric Illuminating Company, Ohio Edison Company, Pennsylvania Power Company, Jersey Central Power & Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company * New York State Electric and Gas Corporation * Public Service Electric and Gas Company * Southern California Edison Company and Piedmont Natural Gas Company * American Electric Power * Duke Energy Carolinas, LLC, Duke Energy Indiana, Inc., Duke Energy Kentucky, Inc. and Duke Energy Ohio, Inc. * Arizona Public Service * The Detroit Edison Company * Allegheny Power * Cobb Electric Membership Corporation ----------------------------------------------------------------- [00099] RULE 2019 STATEMENT -- Womble Carlyle Sandridge & Rice ----------------------------------------------------------------- Thomas M. Horan, Esq., at Womble Carlyle Sandridge & Rice, PLLC, in Wilmington, Delaware -- thoran@wcsr.com -- reveals that his firm represents these parties in the Debtors' Chapter 11 cases: * Allegro Corporation 20048 NE San Rafael Portland, Oregon 97230 * Airmall Boston, Inc. 300 Terminal C Logan International Airport Boston, Massachusetts 02128 * Airmall Cleveland, Inc. Cleveland Hopkins Int'l Airport Concourse A 5300 Riverside Drive Cleveland, Ohio 44135 * Airmall Maryland, Inc. P.O. Box 377 Linthicum, Maryland 21090 * Airmall Pittsburgh Inc. Pittsburgh International Airport Landside Building, Mezzanine Pittsburgh, Pennsylvania 15231 Mr. Horan assures the Court that Womble Carlyle does not hold any claim or interest in the Debtors' Chapter 11 cases. *** End of Issue No. 6 ***