Subscribers to newsletters from the defunct Borders Group Inc. may still receive e-mails announcing new book releases, discounts and promotions. But, the sender won’t be the recently closed Ann Arbor-based company.
As part of a $13.9 million deal to acquire most of Borders’s intellectual property, Barnes & Noble will gain Borders’s website, trademarks and information database for 48 million customers. The sale was approved in a U.S. Bankruptcy Court on Sept. 26. The deal came four days after discussions between the court’s judge and a third-party ombudsman about whether the transfer of the database, which includes former Borders customers’ first and last names, e-mail addresses and phone numbers, could compromise consumer privacy.
Barnes & Noble earned purchasing rights for the intellectual property in a Sept. 14 auction. On Sept. 22, in one of the first hearings since the auction, Judge Martin Glenn halted the sale saying he believed privacy concerns would prevent federal and state regulators from approving the deal. More than 25 state attorney generals authored a letter to the case’s consumer privacy ombudsman, Michael St. Patrick Baxter, and voiced uncertainty about the transfer of personal information from Borders.
Attorneys representing for Barnes & Noble and Borders in a Sept. 21 hearing argued that the consent requirements were unnecessary because the stores’ privacy policies are similar, and there was some overlap between the two companies’ customers, according to Borders attorney Andrew Glenn. As a compromise, Barnes & Noble offered all former Borders customers the chance to opt out of the transfer. The judge then approved the deal on Sept. 26.
The terms of the transfer amounted to a favorable set of circumstances for former Borders customers, Glenn said in an interview with The Michigan Daily.
“There was no need for any further measures,” he said. “I think that goes farther than any case has ever required in terms of consumer protections.”
Carolyn Brown, Barnes & Noble’s director for corporate communications, declined to comment to the Daily on the sale.
In an e-mail to former Borders customers sent on Saturday, William Lynch, CEO of Barnes & Noble, wrote that those customers could opt out through Barnes & Noble’s website until Oct. 15. If a customer chooses to do so, he wrote, “We will ensure all your data we receive from Borders is disposed of in a secure and confidential manner.”
However, Lynch urged former Borders customers to visit Barnes & Noble stores, which he wrote are nearby many former Borders stores. Borders, which was established in Ann Arbor in 1971, its East Liberty Street store closed on Sept. 12 — one of 399 stores nationwide that were slated to be liquidated.
In his e-mail to Borders customers, Lynch was transparent about the company’s motives and encouraged the customers to consider buying NOOK digital reading devices.
“Our intent in buying the Borders customer list is simply to try and earn your business,” Lynch wrote. “We are readers like you, and hope that through our stores, NOOK devices, and our bn.com online bookstore we can win your trust and provide you with a place to read and shop.”
Since the deal closed on Friday, Borders should not have any more legal hurdles, Glenn said. However, the company’s future remains uncertain, as Barnes & Noble holds onto Borders’s website and brand trademarks.