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Cody’s Stock to be Sold to Pay Bank

By Riya Bhattacharjee
Thursday July 31, 2008 - 09:59:00 AM

Books and furniture belonging to Cody’s Books, which closed its doors for good on June 20 after 52 years due to dwindling sales, will be sold next week to pay off a Uniform Commercial Code lien in favor of Summit Bank, according to Mindy Galoob, the store’s former general manager. 

Robert Kidd, the attorney representing the corporation’s current owner, IBC Publishing, told the Planet Wednesday that the bookstore was not declaring bankruptcy. 

“We don’t see any benefit that would flow to anyone from doing that,” Kidd said Wednesday. 

Kidd also said that Cody’s owed money to “different people.” 

“Yes, Cody’s owes money to a number of schools, libraries and public agencies,” he said, adding that he didn’t have any numbers on hand. He said the corporation has no plans to repay these creditors. 

Galoob said the bank will be conducting the lien-foreclosure sale of its collateral on Aug. 7, and the store premises will be returned to the landlord later that week. 

Cody’s landlord, San Francisco-based Townsend I LLC and Townsend II LLC, put up a three-day notice to pay rent or quit outside the Shattuck Avenue bookstore on July 25, which claimed that the store owed $6,877.88 (for June 1 to July 31) in past-due rent. 

“Pay rent for the premises in the following amount, which is past due, or vacate the premises and surrender possession,” the notice from Levy, Ram & Olson, attorneys for the landlord, says. “If you do not pay the past-due amount or give up possession by the required time, a legal action will be filed seeking not only damages and possession but also a statutory damage penalty of up to $600, and with court costs and attorneys fees according to the terms of your lease.” 

According to the notice, the landlord would declare a forfeiture of the lease if the past-due rent is not paid and Cody’s continues to occupy the premises. 

The store still has books displayed on its aisles as well as some furniture on its premises. 

“It is anticipated that the bank will sell all of the book inventory to the successful bidder,” Galoob told the Planet in an e-mail Wednesday. “That is to say, it is not anticipated that the bank will be selling off books one-by-one or in small batches.” 

Cody’s, which closed its flagship store on Telegraph Avenue and branches in Fourth Street and San Francisco in recent years, moved to Shattuck Avenue in April. The store moved to Shattuck Avenue when the rent for its Fourth Street location almost tripled. 

Cody’s president Hiroshi Kagawa of IBC Publishing, which bought Cody’s from long-term owner Andy Ross in 2006, said in a statement in June that “his current business was not strong enough or rich enough to support Cody’s.” 

He added that the store “has been suffering from low sales, and the deficit exceeds our ability to service it."