The Tattered Cover — Colorado’s largest independent bookstore and an iconic destination for Denverites and tourists alike — is officially up for grabs as the owners consider selling.
Bended Page LLC, which owns and operates the Tattered Cover Book Store, asked the U.S. Bankruptcy Court for the District of Colorado on Friday to postpone an upcoming bankruptcy reorganization hearing so the company could respond to potential buyers, according to a Friday news release from Tattered Cover.
While the store did not name the interested buyers that had already reached out, the company is in discussions with multiple individuals and businesses across the country, the release stated.
CEO Brad Dempsey described the announcement as “a very positive opportunity” to refresh ownership and bring in new ideas and investments to modernize the company for a successful future.
“This is not the end,” Dempsey said in an interview Friday. “…I understand there is always fear, but change can also be very healthy for this company.”
Dempsey anticipates the announcement will spark more inquiries, and next steps include sharing Tattered Cover’s history, First Amendment legacy and commitment to Colorado with potential buyers while seeking the “highest and best bid” from a group that will support the company’s values.
“I can’t stand the thought of not having a Tattered Cover in the city, which is why I’m in this with everything I have,” Dempsey said.
Kwame Spearman, ex-CEO of Tattered Cover and a minority investor in the store, said he has had some conversations with people who would be interested in potentially acquiring the chain.
“As I mentioned in a (court) proceeding, I want to do everything I can to ensure that Tattered Cover survives,” he said. “… There’s still a lot of due diligence that needs to occur, and frankly if anyone is interested they should let me know. It’s going to take a lot of coordination and resources to get Tattered Cover out of bankruptcy.”
Bended Page’s board of directors decided last week that selling Tattered Cover to a qualified, committed new owner was in the best long-term interests of the company, investors, employees, suppliers and Colorado’s literary community, according to Tattered Cover’s release.
Tattered Cover originally filed for Chapter 11 bankruptcy on Oct. 16, 2023, closed three of its seven Colorado stores and eliminated more than a quarter of the bookstore chain’s jobs.
The Chapter 11 restructuring filing was meant to give Tattered Cover access to increased funds and support while the company worked to overcome financial issues that pre-existed, but worsened during the COVID-19 pandemic.
Critical to the company’s restructuring effort was securing a debtor-in-possession loan from Read Colorado LLC, which extended Tattered Cover’s ability to operate beyond last October, despite its lack of inventory and finances, according to Friday’s release.
“Read Colorado’s DIP loan was the lifeline that allowed Tattered Cover to rework itself into a strong position to be acquired by people who share our commitment to independent bookstores,” Dempsey said in the release. “It supported ongoing operations so we could pay wages and benefits for more than 70 employees, as well as severance to those we had to let go when we consolidated our store locations. We were able to keep paying rent at our four local stores, host many terrific events and paid more than $300,000 in sales taxes to the communities we serve.”
Although the bookstore chain lost $340,000 in January and projected a $110,000 loss for February — according to a Feb. 21 update filed with the U.S. Bankruptcy Court — growing interest in buying the Tattered Cover chain has been fueled by the store’s full schedule of events and year-over-year monthly sales numbers that are better than the national average for independent bookstores, Friday’s release stated.
Tattered Cover originally proposed a reorganization plan March 7, with a confirmation hearing scheduled for May 28.
A sale process will require amendments to the reorganization plan, as well as clarification and court approval of specific procedures for responding to bids from potential buyers.
In the motion released Friday, Bended Page asked the court to postpone the hearing to no earlier than June 17.
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Updated 5:35 p.m. March 29, 2024: This article was updated to clarify Kwame Spearman’s role with Tattered Cover. He is a minority investor in the bookstore chain.
