PW Daily’s Jim Milliot reported yesterday that AMS and Baker & Taylor have reached a preliminary agreement to settle charges made by AMS that B&T wrongfully withheld $6.2 million when it made its final payment for the AMS assets it acquired. According to court documents, once the settlement receives the approval of the bankruptcy court judge, B&T will pay AMS $1.8 million. That figure consists of a payment of $6.05 million by B&T, minus $4.25 million AMS agreed to pay B&T under the transition services agreement between the two companies.
Posts Tagged ‘AMS’
The Miami Herald reports that Miami International Airport is restarting its search for a bookstore/cafe operator at the new South Terminal, after a bid protest and complications over minority participation upended its previous plan to award the contract to Borders Group. Now it will be months before the concessionaire is selected — and late next summer at the earliest before the shop can be built, delaying the opening by six months. And when that happens, Borders won’t be part of the bidding.
“We’re extremely disappointed in terms of the process they are having us go through again,” said Susan Zewicke, vice president of U.S. operations for Borders, which already operates one bookstore at MIA. “As a result, we’re not going to be rebidding for this one. It’s not worth it to us.” New proposal packages are available to be picked up beginning Wednesday, and bids are due July 12. AMS, a joint venture between the Hudson Group and SF Airport Retail is still considering participating. “Miami International Airport is a very exciting and important market for our company, said Joe DiDomizio, Hudson Group’s executive vice president and COO. “So we will carefully review any new RFP opportunity to determine if it is in our best interests to participate in the competitive bidding process.”
Both stories are taken from PW Daily. First they report that Bankruptcy court judge Christopher Sontchi has approved the sale of PGW‘s two overseas segments to different buyer. PGW UK goes to Medwyn Hughes and Cathy Parsons, who had run HI Marketing Ltd. until they sold it to AMS in 2002, while Brumby Books Holdings bid approximately $400,000 for Bookwise, the PGW unit in Australia and Singapore.
Earlier, PW Daily reported that Fujii Associates and Heinecken & Associates, two of the country’s largest and best known independent rep groups, will merge their two operations effective January 1. The combined firm will be known as Fujii Associates and will be headed by current Fujii president Don Sturtz. Ted Heinecken, who founded Heinecken & Associates in 1978, will continue to work for the combined group “for as long as he wants to,” said Sturtz.
PW Daily reported yesterday that AMS has found separate buyers for the international operations of PGW. Medwyn Lloyd Hughes and Catherine Goodman, who have run PGW’s UK operation since AMS acquired their HI Marketing company in 2002, have agreed to pay $216,325 for the UK distribution arm while PGW’s Australian distributor, Bookwise International, as well as its Singapore unit, will be acquired by the Australian company Brumby Books Holdings for roughly $400,000. Both acquisitions also include select APG inventory, and won’t be finalized lest competing bids come into the bankruptcy court by the April 20 deadline.
After Radio Free PGW teased with a report of Monday’s court proceedings in the bankruptcy court presided by Judge Christopher Sontchi, claiming that “just about everyone and their sister filing an objection to the sale of AMS to Baker & Taylor –not that anything will stop it” they proved to be correct on the final part of that statement. PW Daily reports that AMS, the Creditor Committee and Baker & Taylor reached an agreement on the sale of certain AMS assets. Although other offers did come in for some of those assets, Baker & Taylor ‘s offer was deemed higher and better. The documentation, which is expected to be filed tomorrow, is being finalized.
In related news, as anticipated, Sontchi authorized sale-related payments to AMS senior management and retention pay for other AMS employees out of a Retention Plan Fund of $820,000. Employees offered commensurate employment by B&T or by an alternative purchaser are not entitled to retention bonuses. Radio Free PGW adds that B&T may want the entire Indy DC and the unsecured creditors’ committee wants a guarantee that PGW will have more than 20 days to get its stock out. Which is all just a long way of saying the story still has legs…
PW Daily’s Judith Rosen reports on a new wrinkle in the Koen Book Distributors bankruptcy, which took place in July 2005 and is still working its way through the courts. Soon after the distributor went under, Levy Home Entertainment stepped in to create Koen-Levy Book Wholesalers, which was run out of Koen’s former New Jersey warehouse using much of the same staff. But now that, too, is about to shut down. “We decided the business was not performing as anticipated, and it would not make its numbers in the foreseeable future,” Levy president and CEO Carol Kloster and senior v-p and CFO Steve Carlson told PW Daily. Most, if not all, the employees will be laid off, and publishers will be paid in full. Kloster and Carlson anticipate that it will take 90 days to fully close the facility.
If the Koen name sounds familiar to those new to the publishing and distribution game, perhaps its frequent mention of late at Radio Free PGW in relation to the AMS bankruptcy – and how Baker & Taylor handled its buyout of Koen warehouse stock – will ring a bell.
In my previous post I wondered about the potential antitrust issues that arise from AMS‘s bankruptcy and now, Perseus‘s potential deal to acquire the distribution interests of PGW publishers. To answer my questions, I turned to C.E. Petit, an intellectual property lawyer who specializes in publishing and writer-related legal issues. He’s already written about his AMS-related concerns at his blog, Scrivener’s Error, and now follows up with why there are “substantial problems with antitrust related to PGW”:
* Acquisition of PGW by any existing distributor (or publisher that distributes other publishers’ works, such as Simon & Schuster) would implicate horizontal antitrust principles, when one or more firms control a single, discrete stage in the distribution of a definable product or service (in this case, the distribution of books from publishers to retail sellers.) The industry is already, by even the least-inquisitive measurements, dangerously concentrated.
* Acquisition of PGW by a publisher with a more than miniscule list would implicate vertical antitrust principles. The best historical example is probably the twenty-year-long fight to force the film studios to give up ownership of movie theaters (1940s-1960s). The film studios made films, and controlled distribution (in an anticompetitive manner) by ownership of the only place that the final consumer could go to see the film (the theatres.) Antitrust theory says hat distribution and sales to the end user should be distinct from manufacture/development.
The downside is that the only parties with standing to object on antitrust grounds are:
(1) Consumers, who would have tremendous difficulty showing harm (they have to show either a restriction of available product or increase in the price of product)
(2) Competitors, whose competitive position is inherently harmed by the merger (no court has sustained such a challenge in a decade)
(3) The government, which has repeatedly shown no interest in dealing with antitrust in the entertainment industry since the early 1980s
Thus, although I have grave antitrust concerns, I don’t see that anyone is going to do anything about them.