July 25, 2011, 4:09 PM

Borders liquidation won’t impact Kobo

The e-book retailer will continue to serve the bankrupt book retailer’s customers.

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The management of e-book retailer Kobo Inc. is reassuring customers and investors that the liquidation of Borders Inc., which owns a minority stake in the company, won’t affect Kobo’s operations. A U.S. Bankruptcy Court last week approved the sale of Border’s assets.

“Kobo will continue to serve Borders customers in this time of transition as well as moving forward,” says Michael Serbinis, CEO of Kobo, a unit of Indigo Books & Music Inc., No. 177 in the Internet Retailer Top 500 Guide.

While Borders was one of the early investors in Kobo, it held only an 11% stake in the company, Kobo says. Borders’ shares are subject to the terms of the Kobo shareholders’ agreement which, among other things, restricts their transfer or disposition. Kobo says it has made unspecified filings with the bankruptcy court to “preserve its legal rights moving forward.”

In addition, while Borders was part of Kobo’s U.S. distribution network, the e-book retailer distributes its products through other major U.S. retailers, including Walmart (No. 6) and Sears (No. 7), Serbinis says.

Borders and Kobo have been transitioning Borders’ customers’ e-book accounts to Kobo for some time, the e-book retailer says. Borders’ customers who haven’t yet transferred their e-book libraries can visit kobo.to/bmigrate to complete the transition. Borders customers that are using Borders apps to access their e-book libraries can download a free Kobo e-Reading app from the Kobo.com site.

Kobo says it did not rely on Borders for content. Kobo owns its publishing agreements and had direct relationships with all major publishers, including Random House, Simon & Schuster, HarperCollins and St. Martin’s Press. Kobo is solely responsible for payments to publishers for e-books sold through its platform and will continue to pay publishers on time, the e-book retailer says.

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