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Posts Tagged ‘Radio Free 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…

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Today in AMS: Perseus Completes PGW Deal, Trouble in Non-Consenting Paradise

PW Daily reported yesterday that Perseus completed its acquisition of the distribution contracts of 124 former Publishers Group West clients yesterday and began writing checks to those publishers. Publishers will receive payment either by wire transfer or mail, whichever they prefer, CEO David Steinberger said. With the closing, Perseus began shipping books from the AMS/PGW Indianapolis warehouse yesterday, shipping 70,000 units to accounts to fill orders under the transition services agreement that will last through July 31. “My goal is to be able to lay out a more concrete plan for our entire organization within 60 days,” Steinberger said.

But here’s where the fun part starts: although Perseus will have a PGW booth at BEA and a PGW catalogue, the company does not now own the PGW name, which is still being used by AMS. But since “Transition Vendor” probably won’t go over well with the BEA-niks, and there are still summer titles to be hawked, PGW it is – unless AMS raises a stink about the name, which seems unlikely.

Meanwhile, Radio Free PGW reports on why the revised offer for non-consenting publishers is still not necessarily in their best interests and how they could file for damages. “This little problem with damages is the main reason why the Judge awarded the deal to [Perseus], because the PGW estate would have had greater exposure to damage claims if NBN had won. AMS knows this all too well, since their investment brokers were the ones whose testimony may have sunk the NBN offer.”

Today in AMS: “Transition Vendor” and Pressure on Non-Consentings

Today is a special day in the annals of publishing, as it is technically the last day of Publishers Group West‘s existence. Tomorrow the company will be known as Transition Vendor, and the switch of many publishers to distribution by Perseus formally begins, reports Shelf Awareness. It’s the most obvious sign of the “second phase” of bankruptcy discussed in this week’s Publishers Weekly, and how the weekly checks from Perseus will stop as the 70 cents on the dollar plan goes into effect – and publishers must get used to waiting up to 3 months for future payment.

Soft Skull‘s Richard Nash was the only publisher contacted by PW who said that the bankruptcy will definitely force him to delay some titles, although some others were not yet sure about what they will do for the rest of the year. “We’ll be doing triage on what books need to be published and which can wait,” Nash said.

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Another Distributor Bites the Dust

PW Daily’s Judith Rosen reports on a new wrinkle in the Koen Book Distributors bankruptcy, which took place in July 2005 and is still working its way through the courts. Soon after the distributor went under, Levy Home Entertainment stepped in to create Koen-Levy Book Wholesalers, which was run out of Koen’s former New Jersey warehouse using much of the same staff. But now that, too, is about to shut down. “We decided the business was not performing as anticipated, and it would not make its numbers in the foreseeable future,” Levy president and CEO Carol Kloster and senior v-p and CFO Steve Carlson told PW Daily. Most, if not all, the employees will be laid off, and publishers will be paid in full. Kloster and Carlson anticipate that it will take 90 days to fully close the facility.

If the Koen name sounds familiar to those new to the publishing and distribution game, perhaps its frequent mention of late at Radio Free PGW in relation to the AMS bankruptcy – and how Baker & Taylor handled its buyout of Koen warehouse stock – will ring a bell.

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.

Today in AMS: NBN Makes Offer for PGW Publishers

If you were a Publishers Group West publisher about to enter into an agreement with Perseus for 70 percent on the dollar to take over your holdings, there’s a new offer on the table. The independent distributor National Book Network (NBN) sent a memo yesterday to PGW publishers explaining their terms, which include payment of 85 cents on the dollar for claims against the bankrupt estate, a contract extension of three years, and a continuation of the existing PGW contract with the following modifications:

- no free freight so you will not be asked to help pay for it.
- a credit for returns the same month in which returns are processed by NBN.
- no contribution to the cost of co-op.
- clients pay a small fee for pages in the NBN seasonal sales catalogs.

Radio Free PGW is “very impressed with NBN and decided days ago that NBN would be our new home,” so they view today’s offer as “very rewarding.”

Today in AMS: PGW Clients Get Perseus Offers

PW Daily reports that various Publishers Group West clients are sending back signed agreements to the distributor, though as of this writing, not all publishers have yet received offers. Perseus CEO David Steinberger said he had received “more than 10″ contracts since they began coming in yesterday. Late last week, Steinberger and PGW head Rich Freese met with a group of PGW clients in the San Francisco Bay Area. “The sessions went well. We did a lot of listening,” Steinberger said.

As the runup to the February 7 bankruptcy court hearing date for objections to Perseus’s offer continues, so too do the rumors and speculation. Yesterday PW Daily reported that AMS’s primary lender, Wells Fargo Foothill, “received at least two promising going concern offers for the AMS business,” though the bidders were not named. And both Edward Champion and Radio Free PGW offer items about dealings within Perseus’s distribution chambers.

Today in AMS: Annual Meeting Delayed (again), More From Radio Free

The San Diego Union-Tribune reports that AMS has, as expected, postponed its annual meeting more than a month following the resignation of one of its directors. Robert Robotti resigned in the wake of the Chapter 11 bankruptcy filing and he had advocated the company go ahead with its annual meeting slated for January 24 – a meeting that would have been the company’s first in four years. Now it’s been rescheduled for February 23, and the company named Marc Ravitz, executive vice president of New York’s Grace & White Co., to fill the vacancy left by Robotti. Grace & White, together with affiliated persons and entities, controls 12 percent of Advanced Marketing’s stock.

On the Perseus & PGW front, the bankruptcy court is still scheduled to meet on February 12 to decide whether the 70 cents on the dollar offer is doable. Publishers Weekly’s Jim Milliot and Claire Kirch report on the “alarm bells” set off by the potential deal. “How can we maintain our visibility when we are becoming an ever-smaller piece of a larger puzzle?” asked Michael Wiegers, executive editor at Copper Canyon Press, which is distributed by Perseus’s Consortium unit. Another Consortium client, Jim Perlman of Holy Cow Press, said he is concerned that with the addition of PGW, Consortium “will lose their ability to handle books with the knowledge and concern they’ve displayed in the past.” Several PGW clients voiced similar questions, wondering where they will fit in at Perseus. “The viability of our list in this marketplace depends in part on a fairly intimate familiarity with what we do,” one PGW publisher said, and another wondered what the “pecking order” will be when all the companies are combined.

As always, for the skinny on the failing fortunes of AMS, check out new offerings from Radio Free PGW. Today they look at the $19 million in books that AMS lost at their Indiana distribution center in 2004, why Perseus may require even longer “float” times than did PGW; and also point people to Mr. Popman’s Place for a breakdown of what might possibly be the real reason AMS hasn’t reported its earnings in several years (hint: a faulty computer system.)

Finally, a disgruntled AMS employee (or management type? Who knows) has decided to strike back. And so we get the lovely “AMS Has WMD” blog, which seems solely designed to take potshots at Radio Free PGW. Make of it what you will, whether from a trolling or humorous perspective…

Today in AMS: Court Date Set for February 7, Perseus Court Filing Details

PW Daily reported yesterday that anyone who has any objection to Perseus Books Group‘s 70 cents on the dollar offer for Publisher Group West clients have until February 7 to file motions with the bankruptcy court, according to a notice issued by the Delaware court on Wednesday. If no objections are filed, the court has the right to approve Perseus’s offer without further notice or hearing. A court hearing on the offer is set for February 12.

On what grounds could there be objections? Radio Free PGW spells out one in particular after looking at recent court filings by Perseus, which comes down to this: “Perseus will file an administrative claim for all of the pre-bankruptcy booty that PGW publishers sign over to them. This means that Perseus will be paid ahead of all other unsecured creditors, including Random House and Simon & Schuster. We can’t quite understand why the other creditors would go for this.”

Publishers Lunch also discovered in the recent court filings that although AMS indicated in its original bankruptcy announcement that its international subsidiaries would not be affected, turns out that “AMS has pledged 66& of its ownership interest” in those subsidiaries as collateral — which, Michael Cader points out, will likely get turned into cash at some point.

Today in AMS: Consortium has its say, AMS Viability

Radio Free PGW continues its daily accounting of the AMS bankruptcy fallout, and its top post this morning is quite the doozy: reports from Consortium, the distributor bought by Perseus last summer. Turns out that Perseus, upon acquisition, told Consortium faithful that “nothing here is going to change.” Fast forward eight weeks and the story became this: “‘We respect the contributions of each and every one of you and some of your departments are going to be separated from the company.’ The man couldn’t even tell us we were fired!” More to the point, “two weeks ago, we trained the people who will replace us.” Not exactly a rosy sign for incoming PGW employees, now is it?

Meanwhile, PW Daily’s Jim Milliot, aside from reporting more on Perseus’s “white knight” plan for PGW publishers, has more on the bankruptcy court’s rejection of Simon & Schuster‘s bid to reclaim about $5 million in inventory from AMS’s warehouses. In its objection to yesterday’s ruling, S&S’s attorneys used strong language about the future prospects of AMS, arguing that actions taken by the banks and AMS “have likely doomed this case to an inevitable liquidation.” Specifically, S&S contended that AMS has “refused to propose a reasonable inventory returns program and have taken the unsupportable position that no returns should be credited against pre-petition sales even though the returned books were sold under such invoices.” In order to protect their interests, S&S and most major publishers (with the current exception of Penguin) have stopped shipping to AMS on a post-petition basis, S&S said, and if that doesn’t change “it is unlikely AMS has any reasonable chance of successfully reorganizing.”

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