Declaring bankruptcy isn't exactly the best way to begin the new year, but that's exactly what has happened as Advanced Marketing Services filed Chapter 11 papers on December 29. The full text filing is available via PW Daily, and looking through the list of its top creditors - scrolling past the instantly eye-popping numbers of $43 million owed to Random House and $26 million to Simon & Schuster, the real story begins: the plight of the independent publishers.

That's because many of them - over 150, in fact - use Publishers Group West as their distributor. PGW, over 30 years old now, had been an independent distribution entity until AMS bought them in 2002. And even though PGW had been considered an autonomous unit within AMS, that only goes so far, especially when money owing is concerned. Because even though the volumes at play do not compare to what's owed to the top corporate publishing companies, it's all about the percentage of revenues - so companies like Avalon ($2.3 million), Cooks Illustrated ($1.5 million), Good Books ($970,000), McSweeney's, North Atlantic Books, Milkweed and Soft Skull, to name a select few of PGW's clients, are about to take a severe hit, what with expected revenues for the last three months - key months for all publishers, small or otherwise - suddenly disappearing.

While there is a reasonable possibility that a white knight could swoop in and take in some, if not all, of PGW's distribution clients (several sources indicated to GalleyCat that this could take place) Michael Cader pointed out in yesterday's Publishers Lunch that this scenario could leave "pain in its wake," adding that "creditors will need to see some money in order to approve the sale, which will limit the capital available to repay the debts owed to client publishers." This is hardly new to the small presses who had to jump ship to new hosts when the last two major distributors to go under, LPC and Stoddart/General Distribution Services, did so in 2002 - the same year that AMS bought PGW.

And that seeming coincidence underscores the other major big-picture problem at work: there aren't that many other distribution options in place. Consider Consortium's recent buyout by Perseus, which only recently took over CDS. SCB, IPG and NBN are still around, but their reach - individual or even collective - may not be wide enough to help PGW's client base. And the economics of the industry are not predisposed towards someone starting up a new distribution company from scratch. So what then? It will take time for every nuance of the AMS bankruptcy story to play out, but things aren't looking pretty, and the casualties may run deep.