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Posts Tagged ‘National Book Network’

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.

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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: 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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Today in AMS: Hearing Delayed, Baker & Taylor in the Ring

PW Daily reports that today’s 11 o’clock hearing in U.S. Bankruptcy Court in Delaware on the sale of Publishers Group West ended in a postponement until later this week. Judge Christopher Sontchi clarified for publishers that they are entitled to sign agreements with both National Book Network and Perseus. He also granted NBN two more days to produce a definitive agreement, at which point an auction will be held to determine the winner. If they can’t, then Perseus’s offer will be approved on Thursday morning.

“We respect the process and we’re just looking forward to moving forward as quickly as possible,” Perseus CEO David Steinberger told PW Daily. “We’ve always said it’s important for the PGW community to get a decision quickly.” For his part, NBN head Jed Lyons was pleased that the judge had given the company the needed time to complete its documentation. He noted that the judge said that “facially” NBN’s offer appeared to be higher and better.

In other news, the so-called “mystery buyer” for Advanced Marketing Service’s holdings is none other than book distributor Baker & Taylor . The two parties must complete an asset purchase agreement and then file a motion with the bankruptcy court for a hearing to determine if there are other suitors interested in bidding on the company. The parties expect to request a bidding procedures hearing before the bankruptcy court on February 16, and would hope to close a deal by March 15.

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 NBN Offer and PGW’s Options

Yesterday’s news of the National Book Network‘s offer to Publishers Group West clients who have been imperiled by the Advanced Marketing Services Chapter 11 filing has, understandably, thrown quite the monkey wrench in what seemed to be an orderly (if steamrolled) handoff of client contracts to Perseus. Since sending that letter, NBN president Jed Lyons told Shelf Awareness that “we’ve been inundated with publishers. We’re furiously taking calls and making calls.” He called the offer “pretty straightforward” and thought it would be more attractive to most publishers than the offer made by Perseus. And PGW President Rich Freese – a former NBN employee – commented in a memo to publishers that “I know that NBN appreciates PGW’s close relationship with our customers and will undoubtedly maintain the high level of service and reliability that you have come to expect from PGW.”

So what’s the problem? According to Radio Free PGW – a publisher who is decidedly in NBN’s corner – PGW sent a plea to its publishers to ignore “a clearly superior offer from NBN” on the basis that time is, essentially, running out. “Given the limited time we have available, we believe that it is imperative that our publishers support the Perseus transaction and execute the Perseus agreement so as to eliminate any uncertainty as to the company’s ability to consummate a transaction,” reads yesterday’s communique. But since Perseus’s offer is merely that – an offer, and one that still hasn’t reached its 65% of publishers threshhold – a PGW publisher is very much free to consider, and accept, NBN’s terms. Especially if the February 12 court hearing is postponed, as per Rich Publishing’s recent motion.

Meanwhile, the San Diego Union Tribune reports that AMS is asking a bankruptcy court to let it pay retention bonuses of approximately $750,850 to 117 PGW employees, the money which would be paid out by potential buyer Perseus. A hearing on the request is scheduled for Feb. 28 in the U.S. Bankruptcy Court in Wilmington, Delaware.

Pleasant Distribution Switches Are, In Fact, Possible

Even as the AMS/PGW fallout continues, Shelf Awareness reminds us that small presses can switch distribution companies amicably and lacking the slightest hint of drama. Effective June 1, McBooks Press of Ithaca, N.Y., will be distributed by Independent Publishers Group. The 27 year old publishing house, best known for its historical fiction, especially nautical fiction, has been with National Book Network since 2002. McBooks Press president Alex Skutt praised both IPG–”for its effective sales and operations, its excellent personnel, its financial stability and the help and advice with which it provides its clients”–and NBN, from whom the company is leaving “on the best of terms. They have done a fine job for us and were particularly helpful to McBooks Press when we were impacted by the 2002 demise of LPC Group.”