Yesterday afternoon Publishers Group West President Rich Freese sent out a statement to all PGW publishers outlining the distributor’s position in the wake of Advanced Marketing Services‘ Chapter 11 bankruptcy filing, and what it means for the future of its more than 150 publisher clients. The most important points of the statement:
- PGW filed a motion on January 5 filed with the court seeking approval to give PGW publishers “Critical Vendor” status and have asked the court to allow PGW to make payments totaling the amounts due from PGW to PGW publishers in January 2007. “We believe that Critical Vendor designation is a significant step for PGW publishers and expect this motion to come before the court during a hearing on January 24th,” says Freese.
- Contradicting statements in the media and the blogosphere, “PGW publishers are the owners of their inventory held by PGW in its warehouses in accordance with our contractual relationships.
- Finally, Freese wants “to reiterate that neither AMS nor PGW have ever pledged the PGW publishers’ inventory held in PGW’s warehouses against our credit line. Accordingly, the bank excludes the PGW publishers’ inventory from its calculations against the borrowing base.”
More updates are pending, as are weekly COD checks to each publisher post-petition.