Tattered Cover Bookstore, a Denver institution for more than 50 years, filed Monday for chapter 11 bankruptcy protection.
The chain, which is operated by Bended Page LLC, will close three of its seven stores and layoff as many as 27 of its 103 employees.
“Restructuring for long-term viability requires managers to make very difficult business decisions that affect people and business partners, and we intend to do what we can to minimize these impacts,” said Brad Dempsey, the chief executive officer of Tattered Cover’s corporate owner.
The bankruptcy filing was made under the authority of recent changes to the law that aimed to speed up the restructuring process. Management remains in the hands of the bankrupt entity, not a trustee, and no committee of creditors is required.
The bankruptcy petition said that Tattered Cover owes more than 200 creditors between $1,000,001 and $10 million. The 2020 bankruptcy code changes for small businesses apply where the creditor owes non-contingent, liquidated debts of less than $7.5 million.
Bended Page LLC provided the bankruptcy court with a list of creditors that indicates Tattered Cover owes publishers over $1.2 million, the Colorado State Auditor more than $375,000, and more than $50,000 in unpaid rents.
Tattered Cover aims to gain access to as much as $1 million in financing, according to a press release.
“This new funding will be used to obtain much-needed additional inventory in time for the critical 2023 holiday consumer buying season, fulfill customer orders, upgrade technology, and to maintain operations and staff compensation during the restructuring process.”
Bended Page LLC said that gift cards will be honored and customer orders will not be interrupted.
“Inventory and technology from the three closing locations will be promptly transferred to the store’s four other locations, where it will be business as usual with much improved inventory at Colfax Ave. and Union Station in Denver, Aspen Grove Shopping Center in Littleton, and the children’s store at Stanley Marketplace in Aurora,” the press release announced.
Tattered Cover opened in 1971.
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