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Posts Tagged ‘Christopher Sontchi’

Distributor News: Overseas PGW Sale closes; Fujii and Heinecken Merge

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.

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Today in AMS: Perseus Wins the PGW Sweepstakes

Late today, Judge Christopher Sontchi approved Perseus‘s offer to take over the distribution contracts of all PGW publishing clients that have signed distribution agreements with the company, reports PW Daily. It ends a highly competitive contest between Perseus and the National Book Network for the fate and fortunes PGW clients. “We are excited to move forward as quickly as possible to write checks to PGW clients and to provide some certainty for PGW employees,” said Perseus CEO David Steinberger in a statement. More than 100 publishers, who collectively constitute about 85% of the total amount of monies owed to PGW clients in the AMS bankruptcy, have signed agreements with Perseus. NBN president Jed Lyons said he was “very disappointed” to not have the opportunity to work with the PGW publishers, but congratulated Perseus on its victory.

Today in AMS: Perseus Front-Runs, but it’s Up To the Judge

It took a flurry of late night activity, and Judge Christopher Sontchi could decide to do whatever he likes when today’s hearing gets underway at 11:30 PST, but for now, it looks like Perseus has the upper hand in the battle for Publishers Group West and its client publishers. PW Daily reports that AMS lawyers and the unsecured creditors’ committee gave their support to Perseus’s offer to pay 70 cents of pre-bankruptcy claims to PGW clients. Perseus has signed contracts with publishers accounting for 85% of the PGW debt. Perseus CEO David Steinberger said he was “gratified” for the backing of the two parties and appreciated the support Perseus received from the publishers.

But National Book Network isn’t counting themselves out yet. CEO Jed Lyons announced the company is raising the payout to publishers to 100% of monies owed and dropping NBN’s $1.2 million claim against AMS, as well as another unsecured claim. NBN has agreements with 118 publishers, representing 42% of PGW clients, excluding Avalon, which is being acquired by Perseus.

And the 11:30 hearing will also address distributor Baker & Taylor ‘s plans to take control of the non-PGW-related bankruptcy holdings of AMS. Michael Cader noted in Publishers Lunch yesterday that “doing some reverse math” revealed some interesting findings. “In their January 24 court filing, [AMS] declared accounts receivable of $147.5 million and inventory of $72.5 million. But in the B&T letter of intent, accounts receivable have plunged to $65 million — implying that accounts have paid down their payables by returning up to $82 million worth of books.” That’s a whole lot of money unaccounted for, and it’s not even taking into account how much money Wells Fargo has first claim on. Radio Free PGW has much more on B&T’s offer and why, in his opinion, it’s the “recipe to make stinkbug pie.”

Today in AMS: Tell it to the Judge

It’s a big day in the story of Advanced Marketing Services‘ Chapter 11 bankruptcy, as Judge Christopher Sontchi is set to rule on various motions pertaining to AMS’s future, the competing bids for Publishers Group West by National Book Network and Perseus, and on the most important part of the proceedings: money. Or of course, he may not, if a motion to delay a decision is passed. But to say the industry is waiting on pins and needles for what the judge might decide is, shall we say, a big understatement.

Shelf Awareness has comments from both sides of the PGW bid party. David Steinberger, CEO of Perseus Books Group, said that after “an
extraordinary weekend,” the company has signed up PGW publishers
representing about 85% of PGW revenue, well above the 65% threshold
level set when it made the initial offer a month ago. He noted, too,
that Perseus had changed the offer slightly, “introducing an early exit option” that will be applicable to all publishers that have signed with Perseus regardless of when they signed. “We feel that any further delay in the process would be very unfair to the PGW
publishers and PGW staff who have suffered enough.”

But NBN President Jed Lyons told the online broadsheet that that the
distributor has contracts with more than 70 PGW publishers. “We’re very pleased considering we’ve only being doing this three days. It’s
extraordinary.” He noted that because Perseus is buying Avalon and
because Grove/Atlantic is a strong Perseus supporter, “probably a third of PGW revenues has been off limits for us.” (Speaking of Avalon, Charlie Winton, the company’s president, gets a big write-up in the LA Times as they finally get on the AMS bankruptcy bandwagon.) In addition, Lyons said he had sent PGW publishers a statement from Fortress Investment Group, whose Drawbridge Long Dated Value Advisors of New York is providing financing for the deal.


Radio Free PGW
, as always, has the updates and insight, but today’s nugget comes by way of PGW publisher Vicki Lansky: “I have often found that life’s most important decisions/choices are based on incomplete information (marriage, having a family, believing in god, starting a business, figuring out the right distributor). I’m going to let the court make the best guess it can. Too many unknowns. (My guess is that neither would be perfect.) Having a distributor is better than not having one, that is all I know. I think we’re lucky that 2 companies are willing to slug this out over us. We could have no one interested in bailing PGW (and in effect, us) out. I hope however this works out, it works for you.” And that sentiment sure works for us…

Today in AMS: Who Will Win the NBN/Perseus Turf War?

When the National Book Network entered the AMS/PGW bankruptcy sweepstakes, we had a feeling things were going to get contentious, and fast. And so it has come to pass, as PW Daily reports that things are heating up with the February 12 court date for judge Christopher Sontchi to rule on the competing offers looms ever closer. To wit: both Perseus (which is claiming a small victory in that it has now received more than the 65% response rate from PGW publishers necessary to bring the offer before the court) and NBN have sent in revised proposals to the PGW Ad Hoc Steering Committee, and at the moment – according to Radio Free PGW – committee is recommending that all PGW publishers sign the NBN offer (after the distributor agreed to a number of the changes in the contract recommended by said committee) and fax it to NBN by Sunday.

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Today in AMS: More on Perseus’s ‘White Knight’ Status

If our coverage of the AMS bankruptcy of late borders on the skeptical, it may be because we can’t help but be reminded of one scenario in particular: if Perseus does indeed end up the sole distributor of all 150-odd clients of the entity now called Publishers Group West, then Perseus would become the distributor for nearly 300 publishers. “Independent distribution is a tremendously competitive field, with many well-funded conglomerates,” David Steinberger, the company’s CEO, told the Associated Press yesterday. “Our mission is to be the preferred platform.”

Preferred is one thing, but at what price? And is being the only distribution game in town for hundreds of independent publishers a good way to do business, or will the anti-trust dogs have to be called in? Then again, let’s also remember that any deal, no matter how enticing it may seem on the surface, still has to be approved by the Delaware bankruptcy court overseeing the AMS case. And if Christopher Sontchi decides not to give his okay, then it’s back to square one for a great many publishers. Point being, no matter what happens, the news will never be entirely good – it’s really a choice between the lesser of several unsatisfactory options.

But until the deal is approved – or not – we’re left with a lot of tentative possibilities. Avalon is definitely going to Perseus, and Grove/Atlantic is pretty well on its way, too. PW Daily reported yesterday that if the court approves the proposal, PGW will continue to provide distribution services for publishers before ultimately transferring their books and operations to Perseus’s distribution facility in Jackson, Tenn. It is unclear what the long-term role for PGW staff will be in the Perseus operation. And sources also told both PW Daily and Shelf Awareness that Levy Home Entertainment, whose main business is supplying mass market outlets with books, is still working on a bid to acquire AMS’s warehouse club business. That’s because they have opened an office in San Diego and hired on several former AMS staffers, though neither AMS nor Levy confirmed the reports directly to either publication.

AMS Bankruptcy: Loan Approved, Costco gives okay

As Advanced Marketing Services‘ bankruptcy woes continue to send the publishing industry into a tizzy, interim measures are now in place, the San Diego Union-Tribune reports, thanks to approval by Bankruptcy Court Judge Christopher Sontchi for up to $75 million in loans the company said it needs to operate while in bankruptcy. Good news also came by way of Costco, one of AMS’s largest distribution customers, who told publishers that supply books to AMS should continue to do so. A Costco spokesperson told PW Daily‘s Jim Milliot that until further notice, publishers should operate “on a business as usual basis.” Costco, the spokesperson added, is monitoring events “on a day-to-day basis.” Most of the larger publishers that supply AMS indicated they will continue to do so, but on a COD basis.

Though AMS’s Chapter 11 filing is only for its US holdings, the Bookseller reports that UK publishers are eyeing the bankruptcy filing nervously, despite assurances that AMS’s UK operations will remain unaffected. “There are no changes in our operations, we are free to conduct business as normal and our suppliers are unaffected,” said Gareth Powell, managing director of UK distribution company Advanced Marketing, an AMS subsidiary. But one publisher added: “My understanding is that the UK is affected and we will lose money on UK sales-we are waiting to hear.”