The Work

January 13, 2009 5:10 PM

Jones Day Books Borders for Restructuring; Adds Mexico City Office

Posted by Brian Baxter

Borders The New York Times reports that ailing national book store chain Borders has hired Jones Day to help advise it on restructuring efforts.

The Ann Arbor, Mich.-based bookseller announced the appointment of a new chairman on Tuesday in Richard "Mick" McGuire, a senior executive with Borders's largest shareholder, New York-based hedge fund Pershing Square Capital Management.

Borders, the second-largest bookstore operator in the U.S. after New York-based Barnes & Noble, has not yet filed for bankruptcy. But Borders is saddled with debt and faces increased competition in a tight economy from rivals like B&N and Seattle-based

Borders sold its U.K. and Irish subsidiaries to a private equity group led by London-based Risk Capital Partners for $40 million in September 2007. A little more than a year later, Borders considered selling its stationary business to Pershing Capital for $65 million after posting a $175 million quarterly loss.

The company's plight means another high-profile restructuring engagement for Jones Day, which on Monday announced that it would open a Mexico City office after a merger with Mexican firm De Ovando y Martínez del Campo.

The acquisition of the De Ovando firm will bring eight partners and 12 associates to Jones Day specializing in M&A, banking and finance, infrastructure and real estate, and capital markets work. Perhaps the boost in billables from the firm's bankruptcy practice is allowing Jones Day to expand at a time when other firms are cutting costs.

According to court records disclosed in the bankruptcy filing of the Boscov's Department Store chain in August, Jones Day was paid a $500,000 retainer and is billing between $300 and $895 per hour for Chapter 11 work done on behalf of the Reading, Pa.-based regional retailer.

And back in early December, we outed the firm's role advising Chrysler during congressional hearings on the possibility of a Big Three bankruptcy filing due to a fortuitous photo by a Getty Images photographer. (Jones Day later quasi-confirmed the assignment.)

Unfortunately a lunchtime trip to our local Borders at the corner of Wall Street and Broadway in downtown Manhattan did not yield a photo-op of practice leader Paul Leake and New York office restructuring cohead Corinne Ball enjoying some scones and a cappuccino at the in-store Dean and DeLuca.

A Jones Day spokesman told The Am Law Daily he would look into the matter and get back to us. We'll keep our cameras at the ready.

Photo: Borders, Broadway at Wall Street © Anthony Paonita



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