Just two months after taking over operations of the University Bookstore, the owner of Wallace’s Bookstores filed for bankruptcy. “My understanding is that it wasn’t Wallace’s that went bankrupt, but one of the owners,” Dr. Eugene Dial, dean of student life, said. “He owed several people money, and his creditors sued him and pulled the bookstore into it.”

According to Mike Delaune, director of University Relations, the bankruptcy should not have much of an impact on students and faculty.

“We are hopeful that Wallace’s Bookstores will work through its present difficulties, and that we will have a long-term relationship with them,” he said.

“The Bookstore will remain Wallace’s until such a time as Wallace’s does not exist any more. Bankruptcy, as I understand it, means that they are reorganizing their business arrangements, but this shouldn’t change our arrangement with them.

“Students should see no difference in the level of service.”

Delaune said Wallace’s owes the University more than $1.4 million. This figure mostly covers the inventory Wallace’s bought from the University when it took over operations in January.

Wallace’s manages more than 90 bookstores nationwide, including the bookstores at Southern University, Dillard University and Northwestern State University. Out of all of the university’s the company operates, they owe Nicholls the most money.

However, the debt to Nicholls is by far not the biggest amount owed. According to The Daily Comet, the company owes $5.5 million to Harcourt Brace, a publishing company, and $12.7 million to Pearson Education.

A university committee, headed by Dial, decided which company would take over bookstore operations last semester.

The committee was responsible for researching each of the companies which bid to privatize the Bookstore.

Delaune said he did not know how much research was done on Wallace’s before the bid was accepted.

He said financial background was not taken into consideration because Wallace’s seemed to be reputable.

“Wallace’s manages over 95 bookstores,” he said. “Well, see, the fact that they managed that many, shows that we are not the only ones in this boat,” Delaune said.

“Granted, this is not the end-all. We just saw no reason that this sort of thing would happen. I was not on the committee, Dr. Dial chaired it.”

Dial affirmed Delaune’s reasons.

“I asked Linda Clark, the (University of Louisiana System) Board lawyer, how this could have gotten by, and she said there was no way anyone could have known,” he said. “They were a reputable national company.

“The company has applied for a $40 million loan during their bankruptcy in order to keep operating. They wouldn’t give them a loan if the company was in that much trouble.”

Dial said Northwestern and Southern were both pleased with Wallace’s services and had no problems with them.

Delaune said the University decided to partner with Wallace’s because they made an attractive offer.

“Before we partnered with Wallace’s, the Bookstore made a profit of, as an average of 10 years, around $154,000 a year. Wallace’s, when we entered our agreement, guaranteed us that we would make a profit of $206,000 a year, minimum, plus a $450,000 renovation, in the first year,” he said.

“That was pretty attractive.”

He said Wallace’s is obligated to do so this year.

“If at any point they do not, then we will take necessary action,” he said.

Delaune said he did not want to speculate as to exactly what the “necessary action” would be, but said there were many options available, including looking at other corporations’ proposals.

“We’ve been in the bookstore business for over 50 years,” he said. “We know how to run a bookstore.”

According to The Daily Comet, about 60 creditors have cases pending against the Kentucky-based company, but presiding Judge William Howard consolidated them into one case.

A meeting of the creditors, including the University, is scheduled for April 6.