DENVER — The Tattered Cover bookstore chain has filed for Chapter 11 bankruptcy protection, three years after the iconic local business was sold to an investment group, and plans to close three of its stores over the next two weeks.
The bankruptcy filing on Monday said Tattered Cover owes its creditors, numbering in the hundreds, between $1 million and $10 million. The company listed its assets in the same broad range.
Tattered Cover, which opened in 1971, has seven locations. The company will attempt to reorganize and remain in business during the bankruptcy process; however, it was announced that three locations will close. Locations in Westminster and Colorado Springs will close this Saturday. The store in McGregor Square will close on Saturday, Oct. 28. At least 27 staff positions will be affected by the closures.
The bookstore chain expanded despite economic headwinds after its 2020 acquisition by Bended Page, LLC, an investment group led by David Back, Alan Frosh and Kwame Spearman of Denver.
Spearman, who served as Tattered Cover’s CEO until April, told Denverite in early 2022 that growth was how the bookseller would avoid bankruptcy.
“When we bought Tattered Cover, the organization was headed towards bankruptcy,” Spearman told Denverite. “The amount of revenue from our stores was not enough to support the entire organization. To secure a future for our brand and avoid bankruptcy, we had two options — to grow or dramatically cut costs with company-wide layoffs. We chose to grow.”
Spearman stepped down as CEO in April after rankling some customers with his hardline positions on homelessness and immigration during a short-lived run for Denver mayor.
In announcing his departure, Spearman said he needed to separate his politics from Tattered Cover. Spearman left the board of directors but remained as owner. Spearman is now running for the Denver School Board.
In July, Tattered Cover hired bankruptcy attorney and former Republican congressional candidate Brad Dempsey as CEO. Dempsey said at the time that his goal was to “remedy” the company’s “immediate financial obstacles.”
Dempsey said Monday after the bankruptcy filing, "This is not a liquidation, not by any means."
"The company is not going away," Spearman said. "This move allows Tattered Cover to survive."
Prior to the 2020 private sale, Tattered Cover announced it would leave its 27-year flagship location in LoDo for a new store at McGregor Square.
In January 2022, Tattered Cover opened a new location in Westminster. The company opened its first location outside the Denver metro area, in Colorado Springs, in June 2022.
Tattered Cover was led for decades by Joyce Meskis, who gained national recognition as a fierce defender of the First Amendment and independent booksellers.
In 2015, Meskis sold Tattered Cover to Len Vlahos and Kristen Gilligan, who received nationwide derision for their 2020 decision to declare neutrality, not support, regarding the Black Lives Matter movement. Vlahos and Gilligan sold the company to the investment group months later.
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