By Marie Ory Managing Editor

Barnes and Noble has taken on the responsibilities of the University bookstore, after a Wallace’s bookstore owner filed for bankruptcy. Wallace’s notified Nicholls, with intentions to work out their difficulties. In response to this development, Nicholls officials decided it best to meet with the University’s legal council to discuss what type of action to take.

“The decision was made to hire an attorney, an expert in bankruptcy matters, to represent Nicholls,” Mike Davis, assistant vice president of business affairs for procurement and plant operations, said.

With the recommendation of Nicholls’ legal council and the University of Louisiana System legal council, Winston DeCuir and William Steffes, a bankruptcy expert, were chosen to represent Nicholls in the pending case with Wallace’s.

Nicholls was not the only Louisiana university to be affected by this problem. Both Northwestern State University and Southern University were under contract with Wallace’s as well, he said.

Steffes is currently working on behalf of all three of these institutions, and they have combined their resources when Wallace’s proved to be unable to work through their problems, Davis said.

The case is being handled by the Federal Bankruptcy Court in Lexington, Ky. The court accepted Wallace’s plans to drop several of their contracts with some of the bookstores, and Nicholls was one of them.

“Federal Bankruptcy Court was very sensitive to the needs of higher education, and we need to be able to get the bookstore up and running to meet the needs of the students,” Davis said.

The court then allowed the universities to begin negotiations with several bookstore companies. At that time, Nicholls chose Barnes and Noble from among four companies and accepted their proposal, constituting as a competitive bidding environment which is required.

“What was done here was approved by the Attorney’s General office. It met the legal requirements for a competitive situation. Barnes and Noble took over the operations of the bookstore in May,” Davis said.

Since that time, the University has been working on negotiating a more permanent contract with Barnes and Noble. Until this time, Davis said Barnes and Noble has been working with Nicholls on “good faith” knowing that the University would negotiate a favorable contract for the bookstore.

“We finally worked out the final language in the lease, it was presented to our governing board on Jan. 11 for their approval, and the University of Louisiana System’s Board approved it at their meeting last Friday. We are now in the process of having that lease executed,” Davis said.

Copies of the lease, which is a five-year contract with a five-year renewal, have been sent to Barnes and Noble’s headquarters in Texas, where they will sign it and then send the lease back to Nicholls. At that time, University President Dr. Donald Ayo will sign the contract on Nicholls’ behalf. The document will be brought to the systems office where the ULS president will also sign it. The document will then be brought to the purchasing department where it is then considered a legal document.

“We feel we have the best possible deal we can,” Davis said.

All inventory that was in the bookstore belonged to Wallace’s. The Federal Bankruptcy Court allowed Wallace’s to sell the inventory it had to Barnes and Noble, Davis said.

“Because of the needs of the universities to get a viable bookstore company on their campuses to be able to meet the needs of their students, particularly to order books in enough time, there was not ample time available to go through a formal process,” Davis said.

Davis sat with the four representatives from the various bookstore companies and came to a decision based on those proposals. He said he then contacted Nicholls by phone and explained what was being offered and a decision was made.

Under normal circumstances, the biding process would have taken up to 60 days before completion. This circumstance was analyzed and immediate and necessary action was taken, Davis said.

At the time that Wallace’s went bankrupt, the company owed Nicholls more than $1.4 million. This is something that the University has had to handle, and after a court hearing scheduled for Jan. 30, University officials will know how much money Nicholls will receive, which may be none at all, he said.

Davis said this is a huge undertaking to be involved in such a large bankruptcy case.

Normally in bankruptcy hearings, the parties involved do not do very well collecting losses. This may be a problem for Nicholls, but the University had already received reimbursement from the performance bond company who did extensive research on Wallace’s to make sure there were no problems with the company before the University signed an agreement with them, Davis said.

This performance bond cost Nicholls $200,000, and that money has been reimbursed, Davis said.

“The University, financially will be fine, we will be okay because the University has been on good financial footing for some time,” Davis said.

Michael Delaune, director of University Relations, said the University has reserves, and that although this is a blow to the University, it is not enough to damage Nicholls.

“We are very happy to be with Barnes and Noble. The tremendous name recognition, their capabilities, I think it is going to be a good business relationship with us,” Davis said.

At this time there has been no discussion as to what the renovations will be. Barnes and Noble has not submitted any type of plan indicating changes they would like to implement. This will not happen until the lease is signed, and the lease requires them to make renovations to the building, Davis said.

“As soon as we do that, we will be sitting down with them and talking about what we are going to be doing with the bookstore, and what we want it to look like. Anything that they do has to meet with our approval, but it will be their money,” Davis said.