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Posts Tagged ‘Judge Christopher Sontchi’

AMS Wants B&T To Pay Up

Thought there still wouldn’t be news about AMS, its bankruptcy, and resulting fallout? Think again. PW Daily’s Jim Milliot reported yesterday that Advanced Marketing Services filed a motion last week asking the judge who’s overseeing the company’s bankruptcy to force Baker & Taylor to pay AMS $6.2 million that AMS alleges B&T wrongly withheld when it made its final payment to acquire the majority of the bankrupt distributor’s assets. According to the motion, when the final installment came due in May, B&T paid $4.1 million rather than the $10.3 million that AMS had been expecting.

The decision to not pay the full amount, AMS said, is based on B&T’s “unfounded and patently erroneous interpretations” of the Asset Purchase Agreement. B&T alerted AMS that it was withholding the $6.2 million in an April letter from B&T CEO Richard Willis, and AMS said that its attempts to resolve the dispute since then have proved fruitless, prompting it to file the motion. AMS believes Judge Christopher Sontchi has it within his authority to decide the issue without any need for further discovery or an evidentiary hearing. The motion is set to be heard August 15 and objections can be filed by August 8.

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This Week in AMS: More Time Requested, Victory for Nonconsentings

The San Diego Union-Tribune reported at the end of last week that Advanced Marketing Services is asking the Delaware bankruptcy court to have until August 10 to file for Chapter 11, an extension from the current April 28 deadline. Bankruptcy law gives companies a limited amount of time to propose a Chapter 11 plan to pay creditors without competition from rival plans. As has been widely reported, AMS sold Publishers Group West to Perseus and its wholesaling operations to Baker & Taylor .

Meanwhile, as more former PGW clients sign on with different distributors (including National Book Network, which was in the running to buy PGW outright) one non-consenting publisher was victorious in court at the end of March. Goofy Foot Press, a single-title publisher run by Paul Joannides, was awarded all of the post-petition sales that it requested–a payment that other PGW publishers received. PW Daily further reported that Judge Christopher Sontchi issued a stern rebuke to AMS’s attorneys, calling their treatment of Goofy Foot and other small presses, from whom he had received numerous letters, “outrageous” and threatened to withdraw the executive compensation order for bonuses. According to the hearing transcript released this week, the judge said their actions were “inconsistent with the representations that were made to the Court for the basis to approve the PGW sale to begin with,” and added that if the sale hadn’t already gone through, he would have stopped it. Harsh words, if a bit on the 20-20 hindsight front.

As for Goofy Foot, PW Daily adds that the press is close to signing on with NBN, which illustrates a point made here in the midst of the AMS fray: even losing the bid for PGW made NBN a winner because they could cherry pick among the non-consenting publishers and take on a smaller, more cost-effective load and thus remain able to break even or at least turn a profit. Perseus, of course, got to acquire the publishers it truly wanted (like Avalon and Grove/Atlantic) and integrate dozens more for its own devices. There’s much dust to settle, especially with a court hearing still slated for April 20 for releasing books still held by PGW.

Court Okays B&T Purchase of AMS

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…

Today in AMS: Stalking horses and auctions in sight

A flurry of stories preview tomorrow’s big auction day where Judge Christopher Sontchi will decide who has the better offer for Publishers Group West: Perseus or National Book Network. PW Daily reports, as does Publishers Marketplace, that NBN President Jed Lyons promised in a letter sent to publishers yesterday that if his bid for PGW contracts prevails, he would enter into a lease with the current landlord for the current AMS/PGW warehouse in Indianapolis rather than relocating the stock to the NBN warehouse. NBN will also keep a Bay Area presence and maintain a New York office and perhaps most importantly, keep the PGW name and logo.

Some of the PGW staff members took exception to the use of their names in the NBN letter, concerned that it represented an endorsement of the NBN offer, according to Avalon president and PGW founder Charlie Winton, but Lyons said the letter was meant to show NBN’s commitment to PGW, and not as an endorsement.

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