Baker & Taylor: Chapter 11 After Failed ReaderLink Sale

Baker & Taylor filed chapter 11 on March 16, 2026 in the District of New Jersey after spending most of the previous year dismantling the business outside court. Publishers Weekly described the filing as a surprise chapter 11 case, and Bloomberg Law separately reported the New Jersey filing. The declaration supporting the first day motions says the historic book and library distributor had already sold core operating divisions, retired its secured CIT facility, and cut its workforce sharply before seeking bankruptcy protection to finish an orderly liquidation of what remained.

The case opened as a wind-down rather than a going-concern restructuring. The initial motions seek to keep payroll and bank accounts operating, install Omni as claims agent, and extend the schedules deadline while the court supervises liquidation of the remaining assets. The March 17 hearing order set the first day matters for March 24, 2026, and the status conference notice set a May 12, 2026 case-management conference.

Debtor(s)	Baker & Taylor, LLC
Court	U.S. Bankruptcy Court, District of New Jersey
Case Number	26-12863
Petition Date	March 16, 2026
First-Day Hearing	March 24, 2026
Status Conference	May 12, 2026
Secured Funded Debt at Filing	CIT facility retired before petition date

CIT Default and the Failed ReaderLink Rescue

Baker & Taylor has been a book-distribution business for decades, and Follett acquired the company in 2016. The declaration says a management-led buyer group acquired the business in November 2021, with chief executive Amandeep S. Kochar later holding 96.1% of the ultimate parent company's equity.

The same certification traces the company's deterioration to a mix of long-running industry pressure and specific operational shocks. Management says declining physical-book demand and the digital transition had already weakened profitability, then the 2022 Omicron wave raised payroll costs and reduced warehouse efficiency, while cyberattacks in August and November 2022 disrupted accounting and technology systems and further strained liquidity.

The capital structure that mattered most was the CIT Northbridge credit facility. Baker & Taylor says CIT provided a $70 million facility in November 2021, issued a default notice in April 2025 tied to the fixed-charge coverage ratio, and then tightened access to liquidity so sharply that the lender was effectively deciding which expenses would be funded. The debtor also says CIT locked up about $8 million of otherwise available credit, leaving the company unable to reduce publisher payables and causing trade creditors to stop shipping product.

Management says it tried to avoid a bankruptcy filing. The declaration says Baker & Taylor and Riveron contacted 41 financing sources, received 27 expressions of interest, and signed a September 6, 2025 letter of intent with ReaderLink for a sale of substantially all assets. ReaderLink withdrew from that deal on September 26, 2025. The filing also identifies a separate OCLC lawsuit in the Southern District of Ohio over alleged misuse of WorldCAT data in a competing platform.

Asset Sales Shrunk the Platform Before Filing

After the ReaderLink deal failed, Baker & Taylor shifted from rescue efforts to piecemeal liquidation. The declaration says earlier sale-leaseback transactions involving the Commerce, Georgia and Momence, Illinois fulfillment centers generated $26 million for CIT paydown, and later divestitures of James Bennett and Bridgeall / CollectionHQ generated another $16 million of paydown proceeds.

The remainder of the platform was then sold in pieces. According to the same filing, Baker & Taylor Publisher Services was sold to Lakeside Book Company on November 21, 2025; the Digital Pub business was sold to LibraryOne Digital through December 15 and December 24, 2025 transactions; and CamCat was sold to Marble Press on December 30, 2025. Baker & Taylor also hired Great American Holdings to liquidate remaining inventory.

The wind-down hit the workforce hard. The declaration says Baker & Taylor had employed about 950 people before the wind-down, separated roughly 600 employees on October 6, 2025, and terminated self-funded health insurance, profit-sharing benefits, and severance programs later that month. A separate Illinois layoff report also highlighted the closure of the Momence distribution center and hundreds of layoffs as the business contracted.

By the petition date, the debtor said only 19 full-time employees and 9 independent contractors remained to finish the liquidation. It had vacated the Commerce, Georgia fulfillment center and a Charlotte, North Carolina facility on December 31, 2025, while retaining an office in Bridgewater, New Jersey and the Momence facility.

Trade Debt, Lease Obligations, and WARN Exposure

Baker & Taylor says the CIT facility was fully retired on February 13, 2026, so the case did not open with that lender still holding petition-date secured funded debt. Instead, the filing describes a remaining liability picture dominated by lease and unsecured obligations: about $43 million of capitalized lease obligations tied to the fulfillment centers and roughly $120 million of general unsecured obligations, including about $68 million of trade debt, approximately $33 million of library-customer prepayments, and about $18 million of other unsecured obligations.

The petition's top-20 unsecured-creditor list shows how concentrated that trade exposure had become among large publishers and library counterparties. Penguin Random House was listed at $23.34 million, Simon & Schuster at $16.54 million, HarperCollins at $15.52 million, Thorndike Press at $3.52 million, Palm Beach County Library System at $1.37 million, and Richland County Public Library at $985,722.

Creditor	Claim Type	Unsecured Claim
Penguin Random House	Trade debt	$23,341,845.19
Simon & Schuster	Trade debt	$16,544,610.25
HarperCollins	Trade debt	$15,516,509.05
Thorndike Press	Trade debt	$3,516,586.50
Palm Beach County Library System	Trade debt	$1,373,014.80
Richland County Public Library	Trade debt	$985,722.07

The declaration also flags employee-related exposure that could further enlarge the unsecured picture. Baker & Taylor estimates between $1 million and $2 million of obligations to former employees that could receive priority treatment and says it faces WARN Act exposure in Illinois, Georgia, and New Jersey, though it intends to dispute those claims.

First-Day Motions Focus on Payroll and Cash Control

The initial ask was modest compared with the legacy size of the business. Baker & Taylor says in the payroll motion that it needs authority to pay about $47,000 of prepetition wages, commissions, payroll taxes, and payroll-administration fees so the remaining staff and contractors can keep the liquidation process moving.

The cash-management motion says Baker & Taylor maintained eight Bank of America accounts plus two petty-cash accounts that it intended to close. The debtor argued that forcing it to replace those accounts would disrupt vendor payments, payroll, and communications with buyers and customers at a critical point in the wind-down.

The same declaration says the remaining asset base is relatively small: about $3.4 million of accounts receivable as of mid-February 2026, inventory in Momence with an estimated net value of roughly $100,000, more than $1 million of earn-out and deferred-compensation rights, approximately $40,000 due from LibraryOne for transition services, and residual intellectual property. That is the asset pool the debtor is trying to preserve and monetize under chapter 11 supervision.

Offit, Riveron, Omni, and the Near-Term Calendar

Baker & Taylor is asking to retain the advisors that were already involved in the prepetition wind-down. The Offit Kurman retention application says the firm had represented the debtor on unrelated matters since 2021, was retained in 2025 to help plan a potential chapter 11 filing and asset liquidation, and entered into a chapter 11 engagement letter on March 13, 2026. The Riveron application says Riveron had been advising the company since July 22, 2025 on refinancing and sale alternatives and would continue in chapter 11 on cash-flow monitoring, schedules, monthly operating reports, claims-management support, and liquidation planning.

For claims administration, Baker & Taylor moved to retain Omni Agent Solutions as noticing, claims, and solicitation agent. The application says the services agreement became effective February 26, 2026, carries a $25,000 retainer, and allows Omni to require advance payment for unusually large out-of-pocket items such as publication notice costs.

Procedurally, the near-term dates are straightforward. The court's March 17 order set the first day matters for March 24 in Trenton, and the status conference notice set a May 12, 2026 conference to discuss case-management issues. For now, the case is less about a restructuring transaction than about stabilizing a late-stage liquidation inside chapter 11.

Frequently Asked Questions

What is Baker & Taylor?

Baker & Taylor is a long-running distributor of books and media to publishers and libraries, and Follett acquired it in 2016. The chapter 11 filings say a management-led group acquired the business again in November 2021.

Why did Baker & Taylor file chapter 11?

The declaration says the filing followed an April 2025 default under the CIT facility, lender-imposed liquidity restrictions, an $8 million credit lockup, vendor shipment interruptions, and the failure of a September 2025 sale to ReaderLink. By the filing date, the company had already shifted into a controlled wind-down.

Did Baker & Taylor file with new DIP financing?

The initial docket instead centers on payroll, cash management, claims agent, and schedules-extension relief. The declaration says the CIT secured facility had already been retired before the petition date.

Who are Baker & Taylor's largest unsecured creditors?

The petition's Form 204 creditor list puts Penguin Random House, Simon & Schuster, HarperCollins, Thorndike Press, Palm Beach County Library System, and Richland County Public Library among the largest unsecured creditors. The list also shows significant lease-default claims tied to the Commerce and Momence facilities.

For more bankruptcy case coverage, visit the ElevenFlo bankruptcy blog.