For Immediate Release
May 04, 2000

Contact:
Beryl Wolfe
(207) 775-5115
Web Site: http://www.mainelaw.com

PORTLAND, Maine ÷ Bookland of Maine, a Portland-based book seller with nine retail stores in Maine and southern New Hampshire, has filed for reorganization under Chapter 11 of the United States Bankruptcy Code. The filing is not expected to immediately affect operations or close any of the existing stores.

Also, Bookland and its lead lender, Fleet Bank, have reached agreement on a post- bankruptcy borrowing facility which will permit the company to pay its suppliers for all future shipments and timely meet all post-bankruptcy obligations.

"Chapter 11 of the U.S. Bankruptcy Code is designed to provide companies with the time and opportunity to reorganize, often by restructuring debts or obtaining new investment capital," said Robert J. Keach, the lead bankruptcy attorney at Bernstein, Shur, Sawyer & Nelson handling the reorganization for Bookland. "At present, Bookland plans to remain open for business at its nine stores that span from Portsmouth to Brunswick. But they needed to reorganize to preserve jobs and remain viable while insuring fair treatment of all creditors."

Bookland senior management cited a number of reasons for the filing, including a significant investment made in a proposed flagship superstore in Portland that had to be scrapped due to regulatory and other problems. In addition, competitive pressure from out-of-state big- box booksellers at key locations and from online book "e-tailers" compounded the difficulties.

The company had fallen behind on accounts payable to key suppliers, Keach said, and was in the process of cutting expenses and closing certain unprofitable stores in an effort to restructure the company, meet its obligations and avoid a bankruptcy filing. Bookland closed retail stores in Lewiston, Sanford, Biddeford and at the Mall Plaza in South Portland following successful going-out-of-business sales.

"Unfortunately, while most of Bookland's creditors were working with the company, a few creditors had started litigation and obtained liens against the company's assets, and others had threatened imminent lawsuits," Keach said. "That led to the decision to seek relief under Chapter 11 rather than let a few aggressive creditors obtain an advantage over the others."

Bookland continues to operate nine retail stores in Portland, South Portland, Brunswick, Kittery, Saco, Wells, Portsmouth, N.H., Dover, N.H. and at the Portland Jetport. The company employs approximately 165 at those locations and its Portland executive offices.

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