If newly appointed Borders CEO Ron Marshall thought he was going to have an easy transition into power—and we concede that’s a mighty big if—that dream quickly evaporated: On Tuesday, Jasmine-Jade Enterprises, the parent corporation of Ellora’s Cave and Cerridwen Press, filed a lawsuit against the bookstore chain seeking $1 million in damages stemming from what Jasmine-Jade alleges were deliberately “excessive” orders of their books. (Jasmine-Jade has also filed a lawsuit against distribution company Baker & Taylor , accusing the distribution company of “conspiring” with Borders, which used B&T to return the unsold Ellora’s Cave and Cerridwen inventory.)
In a statement issued by Jasmine-Jade, CEO Patricia Marks described Borders’s alleged ordering of more books than it planned to sell, which the publisher claims was intended to ” reduce the amount owed [Jasmine-Jade] and produce a credit balance in the account,” as “churning.” She added, “It’s crippling the industry. It is especially hard on small publishers, who can’t absorb the staggering costs.” You may recall that when Impetus Press was forced to close last fall, the independent publishing company cited the return fees charged by their distributor as the leading cause of their financial downfall, and specifically mentioned Borders as an outlet that was returning substantial numbers of books. You may also recall another book distributor’s warning to indie publishers that Borders was anticipating “excessive returns” in the last months of 2008. That said, it is unclear whether either of those prior incidents support Jasmine-Jade’s allegations; that’s for a court to decide if the lawyers don’t come to a consensus first. (But if you’ve got some insight, by all means fill us in…)