Yale Co-op Bankrupt

Facing lawsuits from creditors and rising debts, the Yale Co-op has filed for bankruptcy under Chapter 11.

The Co-op's financial troubles have grown since 1997, when Yale decided not to renew the Co-op's lease, instead renting its space to Barnes & Noble, which operates bookstores on about 300 college campuses nationwide.

Barnes & Noble opened a new competitor, the Yale Bookstore, on the site, while the Co-op moved to another location a block away.

Two weeks ago, the Co-op filed for bankruptcy.

In an effort to reverse its financial woes, the Co-op last December came under the management of Wallace's Bookstores, a Lexington, Ky. firm.

The arrangement is a common one for foundering college bookstores, according to Jill Costie, general manager of the Yale Co-op.

"It's sometimes more beneficial," Costie said.

Wallace's recently finished a $2 million redesign of the Co-op aimed at making it more competitive with large-scale booksellers like Barnes & Noble.

Wallace's did not call for the bankruptcy filing, Costie said. The decision was made by the Co-op's former management.

The filing will not affect the current management of the store, Costie added.

Neither the Co-op nor the Yale Bookstore is the official bookstore for Yale, according to the university.

But Yale is a creditor in the bankruptcy because the Co-op owes the university money in back rent.

The Yale Co-op's financial difficulties resemble the financial troubles the Harvard Coop went through four years ago, said Allan Powell, the Coop's corporate general manager.

"We were operating with a department store model," he said. "A lot of things had changed. People wanted more of an academic bookstore."

The Coop hired Barnes & Noble to manage day-to-day operations of the bookstore, with an agreement to keep it running as a cooperative.

The Coop has remained profitable for the past few years, giving rebates to members that reflect its profits.