Tattered Cover, a trailblazer among the country’s independent bookstores and part of the Denver community for more than a half-century, could have new owners as early as this summer, according to the CEO guiding the chain through bankruptcy reorganization.
Brad Dempsey, who took over as CEO in July, filed an amended reorganization plan Friday with the U.S. Bankruptcy Court in Denver. He said non-disclosure agreements have been signed with various interested parties and the company is vetting prospective buyers.
“I’m very comfortable that we have really solid interest in this and it ranges from individuals to corporate entities that I think do have the wherewithal,” Dempsey said.
But Dempsey and Bended Page, the group that bought the bookstore in 2020, also are looking for a buyer who will maintain its culture and focus.
“The Tattered Cover is an incredibly powerful brand across the country,” Dempsey said. “My goal is to develop a group of buyers who are dedicated to continuing the idea of the Tattered Cover and the business of the Tattered Cover as a going concern, with its operations, its employees and its legacy, particularly its First Amendment legacy.”
Tattered Cover’s renown as a fierce proponent of the First Amendment was forged by Joyce Meskis, who bought the store in 1974 when it was a small shop in Denver’s Cherry Creek North neighborhood. Under her ownership, Tattered Cover, with its comfortable arm chairs and cozy nooks, became a gathering place, a center of community events and a crusader against censorship.
Meskis successfully challenged a 1984 law criminalizing the sale of sexually oriented material to minors and prevailed over demands by police for a suspected drug dealer’s book-buying history. She said the information was constitutionally protected.
Meskis received a PEN American Center award in 1995 for defending freedom of speech and expression. She founded the Colorado Freedom of Expression Foundation, a nonprofit dedicated to informing the public about the First Amendment.
In 2015, Meskis announced plans to sell the Tattered Cover bookstores. Book-industry veterans Len Vlahos and his wife Kristen Gilligan joined the company’s management team and acquired controlling interest in the business in 2017. Meskis retired that year. She died in December 2022 at 80.
The Colorado-based investment group Bended Page bought Tattered Cover in 2020. The founding partners were Kwame Spearman and David Back. Spearman, the bookstore chain’s CEO, took a leave to run for Denver mayor and then stepped down ahead of an unsuccessful run for the Denver school board.
The Bended Page board hired Dempsey, a bankruptcy lawyer, as outside counsel. He was named CEO after an interim stint — and is a longtime fan of Tattered Cover.
“It’s where I bought my first book. It’s where I would take girlfriends on dates,” Dempsey said.
He admired Meskis’ career and her support of First Amendment rights, which he has fought for in court. As Tattered Cover struggled financially, Dempsey helped negotiate rent deferrals for the company and was at the helm when it filed for Chapter 11 bankruptcy in October.
Looking at how Tattered Cover reached a financial brink, Dempsey cited the COVID-19 pandemic, which devastated many small businesses. Like other independent bookstores, Tattered Cover also faces relentless competition from such online titans as Amazon.
Dempsey also believes the previous purchases of the bookstores were under-financed. To stem losses, Tattered Cover closed three of its seven stores and eliminated roughly a quarter of the company’s jobs in late 2023. Nearly 70 people are still on staff.
The Denver stores on East Colfax Avenue and in Union Station in Lower Downtown and in the Aspen Grove shopping center in Littleton remain open. Tattered Cover also has a children’s store in the Stanley Marketplace in Aurora.
Dempsey is full of praise for Tattered Cover employees, many of whom have been on staff for several years.
“A lot of times in a bankruptcy case, the board, senior officers and staff all hit the exits. Everybody here stayed and doubled down with me,” he said.
A $1.275 million loan from Read Colorado LLC allowed Tattered Cover to beef up its inventory and get more books on the shelves in time for the holidays late last year, Dempsey said. Tattered Cover had been on a credit hold with most publishers.
A successful run during the holidays has bolstered Dempsey’s optimism about Tattered Cover’s future. Sales increased slightly in December, flattened out in January and then rose by 14% in February and 20% in March, he said.
Some of the bookseller’s events, including a talk by historian and Pulitzer Prize-winning writer Doris Kearns Goodwin, have sold out. Dempsey expects a big crowd Saturday, which is Independent Bookstore Day.
Tattered Cover has hired people to up its social media game and plans to modernize its online presence.
The amended reorganization plan filed Friday refers to “liquidation.” Dempsey said Bended Page, not Tattered Cover, will be liquidated after a sale. The company will submit another set of documents to include proposed bid procedures, he said.
“Right now our projection is that we would try to have final bids in by the end of May, the auction by the first half of June,” Dempsey said.
The transaction could close in July.
Tattered Cover’s debt includes about $1.7 million in secured claims. One of those is the loan from Read Colorado, made up of the Rainbolt Trust and philanthropist Margie Gart, whose family sold the Gart Brothers Sporting Goods Co. to Sports Authority.
The unsecured debt of $3.4 million includes claims by vendors, authors and suppliers for Tattered Cover’s cafes. Secured creditors are paid first.
“I feel positive,” said Paula Bisgard, when asked about her outlook given all the changes at Tattered Cover.
Bisgard has worked for Tattered Cover for 24 years, but was introduced to the store in 1971. She had just graduated from high school and heard about a new bookstore in Cherry Creek. “Tattered Cover has been a part of my life for most of my life.”
When Bisgard was training for the job, Meskis walked in and told everyone there that they were now booksellers. The encounter made an impression.
“I like to think of us not only as employees but as booksellers,” said Bisgard, who added that Tattered Cover is a destination for locals as well as people from other states and countries.
“I think we have good leadership who will weigh the possible options and find a good fit for the store,” she said. “I think there’s been good intention to preserve the culture of the Tattered Cover.”
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