Nebraska bookstore to remain on campus despite Nebraska Book Company bankruptcy

The Nebraska Book Company announced the closing of seven off-campus bookstore locations around the United States on Jan. 5.

The company, which is located in Lincoln and operates more than 290 college and university campuses, filed for Chapter 11 bankruptcy on June 26, 2011.

"At that time, you're provided tools that come with filing," said Alexandra Griffin, associate at AlixPartners, LLP, in a telephone interview. "We received a tool to reject property leases."

With this tool, the Nebraska Book Company (NBC) is allowed to review its stores. If it's more beneficial for the company to cancel a lease, then they have the provisions to do so without penalty, Griffin said.

Out of 138 off-campus bookstore locations, NBC canceled seven leases, according to a Jan. 5 press release.

"Nebraska Bookstore is not one of them," Griffin said. "We've told the court we like this lease."

The manager of the Nebraska Bookstore couldn't be reached for an interview.

The seven off-campus stores are: GotUsed Bookstore in Pittsburgh, Penn., The College Store in Akron, Ohio, Spirit Shop in Lubbock, Texas, Traditions Bookstore-Woodstone in College Station, Texas, Chattanooga Books in Chattanooga, Tenn., Madison Textbooks in Madison, Wis., and Florida Book Store Volume III in Gainesville, Fla.

These stores remained open for the back-to-school rush in January, the plan being to close in mid-to-late February, according to the Jan. 5 press release.

Griffin said NBC will continue reviewing 40 stores.

The company filed for Chapter 11 in June 2011 to restructure about $450 million in loans and bonds, including the reduction of a substantial amount of debt at the parent-company level, according to a media statement.

Closing outlet stores is fairly common with Chapter 11 bankruptcy, said Gordon Karels, professor and chairperson of the finance department at the University of Nebraska-Lincoln's College of Business Administration.

"They also work with their debtors," Karels said. "They look for, maybe, swapping debt for equity to get back on solid footing."

Karels said some companies try to do a Chapter 11 plan and if they can't make it, they end up filing for Chapter 7, which is liquidation.

Griffin stated she couldn't do media interviews about how the company was handling the situation, other than explaining how Chapter 11 works.

franniesprouls@

dailynebraskan.com