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Posted on Fri, Apr 29, 2011 : 2 p.m.

U.S. says Borders must prove it can afford to pay bankruptcy attorneys, others

By Nathan Bomey

The U.S. Justice Department today filed an objection to Ann Arbor-based Borders Group Inc.'s plan to pay its lawyers and other bankruptcy costs, saying the book store chain must first prove that it can afford to so.

U.S. Trustee Tracy Hope Davis said in the filing that Borders should not be allowed to pay certain costs, including more than $1 million to bankruptcy law firm Kasowitz, Benson, Torres & Friedman LLP, for now. The company should be forced to file an operating report detailing its financials from the date of its Feb. 16 Chapter 11 bankruptcy filing through March 31, Davis said.

"Without such report, it is impossible to determine if the debtors are paying their non-professional administrative expenses on a timely basis and have the financial wherewithal to pay the fees and expenses requested by their professionals," Davis wrote.

Davis also said Borders had not paid a quarterly fee due to the U.S. Trustee and that the fee should be paid before Borders pays other costs.

Other firms whose fee payments Davis objected to include real estate consultancy DJM Realty Services, compensation consultancy Mercer Inc. and several arms of Deloitte Consulting LLP.

A spokeswoman for Borders did not immediately respond to a request for comment.

Contact's Nathan Bomey at (734) 623-2587 or You can also follow him on Twitter or subscribe to's newsletters.



Tue, May 3, 2011 : 5:33 a.m.

Did the courts subject the auto industry to the same scrutiny. NO. Why? because the taxpayers bailed them out. Justice? You get what you pay for. This is a sham. Selective persecution at it's worst nad they call it justice? Hey, lets give the auto unions more taxpayer dollars and milk the real job providers and business folks for everything they have. Justice? Yeah, I'll tell the jokes. Michigan is Doomed.


Sun, May 1, 2011 : 8:55 p.m.

The next time I step in borders will be at the liquidation sale!


Sat, Apr 30, 2011 : 10:17 a.m.

why not let them have their cake and eat it too. As I stand here to nothing but a company that has taken nothing from the government except for protection from the law. I am not kidding, they could have done worse as a bookstore that has way too many bookstores. If I made that much money I would be used to it, kinda like me hoping I make 30k in a year, that means I am rich. These people make money and good for them and if I was int there shoes I would do the same thing as anyone out there in this would do the same. Dont hate, congradulate. I miss Michigan and cant wait to come back. They need to focus on social media books like, wait. no one. That whole cafe thing was lame, nook? find something new, like how Detroit will come back alive and retake north america with its fresh water. Tangent, perhaps. just wait

Brian M.

Fri, Apr 29, 2011 : 8:33 p.m.

So that's not promising?


Fri, Apr 29, 2011 : 7:46 p.m.

Nate are they ever gonna let you take a vacation? You write like 80% of the content here lately, I'm starting to feel like you could use a break bud!