GalleyCat reports on a bankruptcy filing by an American book distributor,
Advanced Marketing Services, a leading provider of customized merchandising, wholesaling, distribution and publishing services for the book industry, announced in a statement today that it will file voluntarily for Chapter 11 bankruptcy. The Chapter 11 proceeding does not include the Company's international subsidiaries in the United Kingdom, Mexico and Australia, and their operations will not be affected. The Company also announced that, in conjunction with the filing, it has entered into a loan agreement for $75 million in Debtor-in-Possession (DIP) financing from Wells Fargo. "This move will permit AMS, with its investment banker, to continue to pursue strategic alternatives," said Gary M. Rautenstrauch, President and Chief Executive Officer. "Additionally, Chapter 11 protection will enable the Company to continue to conduct business in the normal course, make payments to vendors going forward and continue delivering quality service and products to customers."
GalleyCat also points to the full text of the bankruptcy filing and the list of top creditors and the amounts due to them is eye-popping.
$43.3 million - Random House
$26.5 million - Simon & Schuster
$24.6 million - Penguin Putnam
$22.6 million - Hachette
$18.0 million - HarperCollins
The big five are together owed $135 million!
The New York Times adds
A publishing executive said that while authors and readers were unlikely to be affected by the bankruptcy filing, many publishers might not recover much of what they were owed.
“This is a huge disruption in this business,” said the executive, who declined to be further identified because he was not authorized to speak for his company. “The publishers are going to end up taking a big loss.”
Simon & Schuster immediately suspended shipments to Advanced Marketing Services, a Simon & Schuster spokesman, Adam Roth- berg, said.
Publishers would not give details on their business relationships with Advanced Marketing Services, but the company accounts for as much as 10 percent of some publishers’ sales.
“We’re exploring ways to keep working with them,” a spokeswoman for HarperCollins, Erin Crum, said. A spokesman for Random House declined to comment.
Advanced Marketing Services, founded in 1982, has headquarters in San Diego. It acts as a middleman between publishers and booksellers, obtaining books directly from the publishers and distributing them to retailers like Sam’s Club, Costco and BJ’s Wholesale Club.