An objection has been filed to last week's bankruptcy auction of Joseph-Beth Booksellers, which will be the subject of a bankruptcy court hearing Wednesday morning.
In a brief filed Monday, the Cleveland Clinic, from which Joseph-Beth leases space for a health-themed bookstore, objected to the likely assigning of the lease to the highest bidder for the space, a company affiliated with the management of The Mall at Lexington Green.
In its argument, the clinic, whose lawyer did not return a call for comment, said it "essentially has been provided with no evidence whatsoever of the ability ... to perform all obligations under the lease or provide the Cleveland Clinic with the benefit of its initial bargain with" Joseph-Beth.
An attorney representing Robert Langley, who is affiliated with the highest bidder for Joseph-Beth's stores in Cleveland, Lexington and Cincinnati, said the objection is likely a formality.
"It's just a matter of getting them comfortable with the new purchaser, and we're working on that today," said Gary W. Barr.
Langley is behind Booksellers Enterprises LLC, which outbid Joseph-Beth founder Neil Van Uum for the properties at the auction. Booksellers Enterprises will be owned by companies affiliated with Langley, his attorney said, though the exact makeup has not yet been determined. Joseph-Beth Chief Operating Officer Mark Wilson will be president and CEO of the new company and own a stake in it.
In Cleveland, the clinic noted that its environment is vastly different than bookstores in shopping centers. The merchandise and food sold in the bookstore require the approval of the clinic's leadership to assure high quality and "strict nutritional standards."
The clinic noted that it agreed to the lease given that it was comfortable with Joseph-Beth's management team, including Van Uum.
The new purchaser "has no experience operating brick-and-mortar booksellers" and had not divulged the employees, other than Wilson, who would be staying on.
"Moreover, it is the Cleveland Clinic's understanding that Mr. Van Uum will not be retained by the purchaser going forward," according to the filing. Van Uum could not be reached Tuesday.
The Joseph-Beth-owned stores in Fredericksburg, Va., and Memphis were sold to liquidators. Deals are being worked on to keep them in operation. More details are expected to be discussed at Wednesday's hearing.