Wallace’s Bookstore finances in trouble
by Chris Taylor, editor in chief

    Students strolling into the campus bookstores may have noticed that the shelves are mostly bare. Wallace’s, which has operated all TCC campus bookstores since June 19, filed for Chapter 11 bankruptcy March 1.

    Richard Inman, TCC director of business services, said, “The administration is investigating the situation and the college will protect itself.”

    He also said that officials are in conversation with Wallace’s and are trying to ensure that the situation will not deteriorate.

    “We are working to make sure that students will not be impacted by this situation,” he said.

    Wallace’s signed a five-year contract and took over TCC campus bookstores last summer, with promises that Internet book purchasing would be available in a year.

    They also promised that all bookstore employees would remain employed for one year after the take over.

    Wallace’s Bookstores Inc. and the Wallace’s Book Co. filed Chapter 11 petitions in U.S. Bankruptcy Court in Wilmington, Del.

       Student and faculty complaints about the service and availability of books and supplies have been circulating heavily while the store has been in financial trouble.

    Wallace’s has disclosed debts of $340 million, but isn’t scheduled to release a complete list of assets and debts until March 14.

    In a company memo to employees, Wallace’s explained that business will continue as usual for the stores, employees and customers. The memo also promised that the stores will remain open, merchandise shipments will continue, associates will continue to be paid on their regular schedules, benefits will be provided and pension and profit-sharing benefits that are held in trust will be protected.

    Also in the memo, Wallace’s assured employees that a $40 million loan from IBJ Whitehall Business Credit Corporation will allow them to survive during the Chapter 11 period.

    According to a story in the Lexington Herald-Leader, the $40 million loan may now be in jeopardy. The United Co. of Bristol, Va, the largest secured creditor in Wallace’s Chapter 11 case, filed a motion asking that the cases be transferred to Lexington, where the company is located.

    Lawyers say that the filing temporarily freezes the bankruptcy process, including the loan from IBJ Whitehall Financial Group. The loan had been scheduled to be closed March 2 after a hearing in U.S. Bankruptcy Court.

    Attorney Barbara Edelman told the Lexington Herald-Leader that without the loan “we are basically shut down.”