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.