Leaders at the longstanding Denver bookstore Tattered Cover are exploring a potential sale of the company.
A source familiar with the matter said Tattered Cover has received three serious bids of varying amounts. Despite reports to the contrary, a final deal has not been solidified yet. Bidders still have the opportunity to amend or retract their offers.
“We are not at liberty to identify any of the bidders. This confidentiality is both a legal NDA requirement and essential to facilitate our discussions toward ensuring the best possible outcome for Tattered Cover,” a spokesperson for the company told Denverite.
Tattered Cover has faced a difficult financial situation in recent years, fueled by the COVID-19 pandemic and occasional controversies involving its leaders.
The local bookstore chain has been staving off bankruptcy for years under two different owners. It finally filed for Chapter 11 bankruptcy last October, closing three locations and laying off nearly 30 workers in the process.
Since then, owner Bended Page LLC has been exploring its options to resolve about $3.4 million in unsecured debt and once again become profitable. In March, the U.S. Bankruptcy Court in Colorado allowed Tattered Cover to reschedule bankruptcy hearings so it could pursue talks with potential buyers.
Tattered Cover was due to hold an auction Wednesday to hear bids to buy the bookstore and its assets, but it canceled the event at the last minute, saying it had already received several qualified offers.
“The company and outside counsel are actively working with bidders to further review and understand the bids, including the specifics of how each prospective buyer would move forward with operations – both macro and micro,” said the company’s representative.
Tattered Cover’s board will meet Thursday afternoon to discuss its options. If the company chooses to accept one of the bids, the U.S. Bankruptcy Court must give final approval for the deal to advance.
How Tattered Cover got to this stage
Since opening in 1971, Tattered Cover has long prided itself on its independent spirit.
Its second owner, Joyce Meskis, made a name for the store when she brought two lawsuits to the Colorado Supreme Court in 1984 and 2002. The first challenged a law that criminalized displaying sexually explicit material in shops, while the second challenged a policy that allowed the federal government to monitor which books shoppers bought.
Meskis sold the company to husband-wife duo Len Vlahos and Kristen Gilligan in 2017. The couple faced the challenge of keeping Tattered Cover open while online book sales dominated.
In 2020, Vlahos and Gilligan faced a two-front battle brought on by COVID-19 and a poorly received response to the George Floyd protests, both of which negatively impacted sales. A third-party audit found at the time that Tattered Cover marginalized employees and authors of color.
Shortly afterward, Vlahos and Gilligan sold the bookstore to its current owners, Bended Page LLC, a group of three investors that included Kwame Spearman, who became chief executive. The trio inherited a bookstore that was not profitable and owed debts to publishers.
Under Spearman’s leadership, the bookstore set out on a rapid growth plan. To Spearman, more stores meant more revenue.
The gamble didn’t end up paying off, and Spearman stepped down from the chief executive role in April 2023 to run for Denver School Board. In July 2023, the board hired bankruptcy attorney Brad Dempsey as its next leader. Just months later, it filed for bankruptcy.
Documents filed with the U.S. Bankruptcy Court said Tattered Cover owed its various creditors nearly $3.2 million in unsecured claims. Creditors included publishing giants Penguin Random House and Harper Collins Publishers.
