Borders Group disclosure statement approved; Plan hearing Dec. 20

By Lisa Kerner

Charlotte, N.C., Nov. 10 - Borders Group, Inc.'s disclosure statement was approved by the U.S. Bankruptcy Court for the Southern District of New York on Thursday, according to an attorney familiar with the case.

A plan confirmation hearing is scheduled for Dec. 20, the attorney said.

As previously reported, Borders and its official committee of unsecured creditors filed a joint plan of liquidation and related disclosure statement in October.

The purpose of the plan is to liquidate, collect and maximize the cash value of the company's remaining assets and make distributions to creditors from sale, claim and causes of action proceeds through creation of a liquidating trust, according to court documents.

Treatment of creditors will include:

• Holders of administrative claims, priority tax claims and priority non-tax claims will be paid in full in cash;

• Holders of secured claims will either be paid in full in cash or receive the collateral securing their claims;

• Holders of general unsecured claims will receive a share of liquidating trust assets remaining after payment of priority and administrative expense claims and liquidating trust expenses; and

• Holders of equity interests and intercompany claims will receive no distribution.

Borders, an Ann Arbor, Mich.-based specialty retailer of books and other educational and entertainment items, filed for bankruptcy on Feb. 16, 2011. Its Chapter 11 case number is 11-10614.

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