Borders’ Pershing Square Loan Coming Due

Mar 25 2010 | 11:37am ET

Pershing Square Capital Management could push bookseller Borders Group into bankruptcy as soon as next week.

The Ann Arbor, Mich.-based retailer faces an April 1 deadline to repay a $42.5 million loan to the hedge fund. New York-based Pershing Square has renegotiated that loan three times already, sparing Borders an earlier bankruptcy. It is unclear whether Pershing Square chief William Ackman is willing to do so again.

Pershing Square is Borders’ largest shareholder. Ackman said in February that he sees only a “low probability” of Borders filing for bankruptcy.

Should Ackman play hardball and demand repayment, Borders might default on at least part of the loan. The company had just $32.8 million in cash at the end of October, almost $10 million less than the principal of the loan.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...