Two people holding gift cards from defunct bookseller Borders have asked a bankruptcy judge to let them be counted as creditors and collect something from the bankruptcy estate. They argue that they had no notice that they needed to redeem their gift cards before the chain closed in September, and they want to form a class action of everyone who is in the same situation. From a Wall Street Journal blog post:
Too bad, so sad, trustee Curtis R. Smith now says. Smith, who is responsible for distributing cash to Borders creditors, says the company did its part to notify all of its creditors, including gift-card holders, of the June 1, 2011, deadline to file a claim in the Chapter 11 case it launched in January 2011. Smith said the gift-card holders got a second chance to redeem their cards in the nearly four months of between the claim deadline and the chain’s closing. No other creditors got such a chance, Smith said, and the gift-card holders “astonishing” try for a “third bite at the apple” does not sit well with the trustee.
It is hard to be sympathetic to what the article terms “presumably eager readers” given that the Bankruptcy of Borders was no big secret. Even if they missed the voluminous news coverage, just passing by a Borders store would have given them ample warning that the chain was headed for oblivion. In this case, the trustee is right in his assertion that the gift card holders got multiple chances to reclaim their funds and now should be excluding from the line of creditors.
Click here to read more from the Wall Street Journal.
Click here to read a prior Perspective about Borders’ bankruptcy and gift cards.