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.”
Another publisher affected by the AMS bankruptcy is Meredith Corporation, who in announcing their second-quarter earnings for Fiscal Year 2007 included a note that the results reflect a pretax charge of $3 million, or $0.04 per share, to reserve for a doubtful account relating to the AMS bankruptcy.
There’s also plenty of reaction to Perseus’s 70 cents on the dollar offer for PGW publishers. Icarus Comics makes the comparison between Perseus’s offer and that given to comics publishers, noting that “if we took a look at what has happened in the comics industry since its distributor consolidation, we can see that while there may be plenty of benefits to be had, it is the few large publishers who would receive a disproportionate majority of those benefits, not the indies.” Icv2 adds that “getting 70 cents on the dollar and a distributor with a future will probably appeal to many of PGW’s clients, which include Broccoli, Gigantic Graphic Novels, Actionopolis/Komikwerks, ibooks and Dark Horse Press (the company’s prose fiction imprint).”
Finally, 3 AM Magazine interviews Richard Nash of Soft Skull Press on many topics, including why the AMS bankruptcy “completely exposes” how precarious independent publishing is. “Basically, the era of distributors informally helping publishers’ short-term cash flow problems is likely over,” Nash concludes. “Which means, if you are in the game of having your books distributed on a nationwide basis, into the wholesalers and national chains and such, youâ€™re going to need deeper pockets than hitherto…”