Borders (UK) Limited

Borders (UK) Limited (In Administration) ("BUK") or ("the Company")

Updated: 17 December 2009

ADMINISTRATION

Philip Duffy, Geoff Bouchier and David Whitehouse of MCR were appointed as joint administrators ("Administrators") of Borders (UK) Limited on 26 November 2009. All Administrators are licensed by the Insolvency Practitioners' Association.

The affairs, business and property of the Company are being managed by the Administrators, who act as agents of the Company and without personal liability. The role of the Administrator is to deal with the business and assets of the insolvent estate.

TRADING / SALE UPDATE

Following their appointment, the Administrators have undertaken a review of the Company's business and operations in the context of an Administration.

On Saturday 27 November 2009 MCR announced closing down sales at all of the Company's 45 retail stores.

Please note that during the trading period all goods will be sold as seen and returns will not be accepted. Your statutory rights remain unaffected.

The Administrators are now pursuing parallel Administration strategies - continuing to seek a purchaser for the business and/or assets of the Company, whilst conducting store closing down sales.

Considerable interest has been expressed either in the business and/or certain stores and this interest is actively being pursued by the Administrators.

Any Interested Parties should forward an email to borders@mcr.uk.com including ‘Interested Party' in the subject line.

BORDERS GIFT CARDS

The general position when a company goes into Administration is that customers would no longer be able to redeem any form of gift cards or vouchers purchased prior to the date of Administration, and would rank as an unsecured claim against the company (ie. a pre Administration claim).

The Administrators have on this occasion however, decided to permit Borders Gift Cards to be redeemed on the strict basis as set out below.

Borders Gift Cards will continue to be honoured within the Borders stores on the sole condition that they can only be used to fund up to 50% of any transaction.

For example; to redeem a £10 Borders Gift Card, the customer will be required to purchase items to the value of £20 or greater. (Payment would then be £10 Borders Gift Card and £10 cash/credit or debit card).

Regrettably, National Book Tokens cannot be accepted, however these continue to be redeemable at other participating retailers.

Customers please note that store employees are not authorised to vary this policy. Please therefore respect their position and refrain from challenging them in relation to this matter.

For the avoidance of doubt this policy will remain unchanged for the duration of the Administration trading period.

The use of gift cards in this way is not mandatory and any customer not wishing to take up this offer should complete a proof of debt form and submit their claim which will then rank as an unsecured claim against the Company. For further information regarding claims and to download a proof of debt form please see the section below entitled Statutory Process.

If you had transferred money onto a gift card prior to our appointment and the card was not credited with the funds you will rank as an unsecured creditor. For further information regarding claims and to download a proof of debt form please see the section below entitled Statutory Process.

CUSTOMERS WHO HAVE PAID IN FULL AND ARE YET TO RECEIVE GOODS

CREDIT CARD AND VISA DEBIT CARD PAYMENTS

Customers should contact their credit card issuer who may be able to initiate a charge-back for the order. Please note the timing, quantum and appropriateness of charge-backs by the credit card issuers is beyond the control of the Administrators and no assistance can be provided in this regard.

If you are unable to claim chargeback then the monies owed to you will be ranked as unsecured.

CASH, CHEQUE, NON-VISA DEBIT CARD PAYMENTS

These claims are classed as unsecured claims against the Company. For further information regarding claims and to download a proof of debt form please see the section below entitled Statutory Process.

RETURNED GOODS

GOODS PURCHASED BEFORE 26 NOVEMBER 2009

Customers who purchased goods prior to 26 November 2009 who wish to return them will be permitted to exchange the goods for items of the same value or less upon producing a receipt less than 28 days old, in line with the original returns policy. No credit can be provided if the return is for goods of a lower value.

EMPLOYEES

The Administrators would ask that all customers and suppliers treat the staff with patience and courtesy as this is an extremely difficult and uncertain period for all employees.

Any issues that customers need to raise should be directed towards the general manager of the relevant store.

Employees should continue to direct questions through their usual line manager or alternatively the Company's Human Resources department at Head Office.

SUPPLIERS

A letter to the Company's creditors was sent out on 2 December 2009.

All accounts with the Company should be closed with effect from the close of business on 26 November 2009. I would request that you send a statement of your final account direct to the Company's trading address in order that your claim against the Company can be noted. You will appreciate that no payment can be made to creditors of the Company in respect of debts arising prior to my appointment.

Goods or services supplied to the Company subsequent to the Administrators appointment on 26 November 2009 must only be made against orders which have been properly authorised by the Administrators and their staff. This will be further detailed in the creditor's letter referred to above.

Please note that the Administrators are not adopting any contracts entered into by the Company prior to their appointment.

RETENTION OF TITLE ("ROT")

If you contend that you have any form of security or retention of title in respect of goods that you previously supplied you should immediately forward full details of your claim to borders@mcr.uk.com under the heading ‘ROT'.

LOCAL AUTHORS

If you are an independent local author who has supplied goods to the Company please forward full details to borders@mcr.uk.com and include the relevant store locations.

STATUTORY ADMINISTRATION PROCESS

A detailed report containing the Administrators proposals will be sent to all creditors within ten weeks from the date of appointment.

All completed proof of debts should be forwarded to MCR 11 St James Square, Manchester, M2 6DN.

A copy of the proof of debt form can be downloaded from the MCR website at www.mcr.uk.com or via this link

The Administrators will continue to deal with the business & assets of the Company in order to realise funds to distribute to creditors in the prescribed order of priority as set out in the Insolvency Act 1986 ("IA86").

Broadly, the order of priority for creditor claims is as follows:

(1) Preferential Creditors (certain categories of employee claims)

(2) Prescribed Part distribution to Unsecured Creditors (includes customers, suppliers and residual employee claims) this is capped at £600,000 in accordance with the IA86 to
share equally between ALL unsecured creditors.

(3) The Secured Lenders (who have registered charges over the Company or its assets)

(4) Unsecured Creditors (includes customers, suppliers and residual employee claims)

ADDITIONAL INFORMATION

Please note the Administrators are unable to provide customers or trade suppliers with any other information other than the information contained on this website update.

The Administrators will not be responding individually to customers and trade suppliers.