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.
Meanwhile, the group of PGW clients who banded together to form an ad hoc Committee in their own interests is gathering steam. “We’ve had an overwhelming response,” said The Planning Shop founder Rhonda Abrams in a telephone conversation yesterday afternoon about the call for urgent action sent Sunday morning by her and Steven Piersanti of Berrett-Koehler Publishers. “Within hours of sending out our email, over 50 publishers, large and small, got on board. Everyone had concerns about what we can do to help.” With the deadline to join now passed, Abrams said that a steering subcommittee – needed for organizing, guiding and being the agent for decisions not requiring approval of the entire Ad Hoc Committee – was still in the process of formation.
That Abrams and Piersanti were the first to spring to action is not surprising considering their areas of expertise. “We’re both business book publishers,” she said, but stressed that PGW publishers as a whole are “a collegial group of people.” As soon as AMS declared bankruptcy, Abrams retained her own attorney to look out for her business interests, and then as motions were made throughout all of last week, the idea to form an Ad Hoc Committee became a stronger prospect “in order to assert and protect PGW publishers’ rights. We have very different interests from AMS as a whole; we’re dealing with a company that was already solvent, with a wonderful history of making independent voices heard. Now there are a lot of publishers, great and well-respected names, who will be disproportionally hurt. The future of independent publishing is entwined with this lawsuit.”
But will solidarity hold throughout? The anonymous watchdog blog Radio Free PGW details a story from a publisher whose previous distributor (likely LPC) went under. “She suggested that any signs of early unity among publishers might quickly break apart, with smaller splinter groups hiring their own attorneys. The biggest publishers will likely ban together into one group, without a tremendous amount of concern for the smaller publishers.” But the bankruptcy lawyers may well make a killing…
More AMS & PGW news by way of Boing Boing, Rachel Kramer Bussel, Lloyd Kahn and Kathryn Cramer, who sums the whole thing up most pointedly: “does ANYONE at Costco or Sam’s Club care that they are and have been forcing the entire publishing industry to do business with crooks? It would appear that the answer is no: that’s how Costco keeps its prices down. Business as usual is business with crooks.”
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