1786 creditors received a total of $485 million in payments from Borders, Inc. or its co-debtors (“Borders” or the “Debtors”) in the 90 days before their bankruptcy. For these creditors, the Borders’ July 18, 2011 decision to liquidate means more than a write off of pre-petition unpaid invoices. Many of Borders’ vendors may be asked to repay as “preferential transfers” or “bankruptcy preferences” amounts received from Borders in the 90 days prior to the date of bankruptcy (the “Preference Period”). Section 547 of the Bankruptcy Code provides for such “clawbacks” of transfers found to be “avoidable” and not protected by one or more defenses.FN1
On January 3, 2013, Curtis R. Smith, as the Liquidating Trustee of the BGI Creditors Liquidating Trust in the Borders Group, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation in the Southern District of New York (Manhattan).
Borders Group, Inc. and 7 associated debtors (the “Debtors” or “Borders”) filed voluntary petitions under Chapter 11 of the Bankruptcy Code on February 16, 2011 in the Bankruptcy Court for the Southern District of New York (Case No. 11-10614). The Honorable Martin Glenn has been assigned to the case. This initial note provides the Debtors’ consolidated list of their 30 largest unsecured creditors. See related list Borders’ top 50 recipients of payments in the 90 days prior to the Borders’ bankruptcy or read the complete Borders preference analysis by going here: For 1786 Borders’ Suppliers and Other Creditors, Its Not Time to Close the Books.