Here are the most recent developments:

• Some folks have a sense of humor about PGW.
• Violet Blue has offered her thoughts on the meltdown, noting how the impact affects Cleis Press and pointing to a former AMS exec’s prison sentence. (The charge: falsifying earnings.)
• Soft Skull’s Richard Nash puts the catastrophe in perspective.
• Dan Wickett shares some ideas on how publishers might want to pick up some cash to make up for the lost revenue. The inspiration? An idea first put out there by Richard Nash.
• Scrivener’s Error has a helpful legal breakdown. The news ain’t good.
• Paul Collins: “Innumerable small publishers working with AMS and their subsidiary PGW — just about every good small publisher you’ve ever heard of — woke up in the street on New Year’s morning with their clothes missing and a pair of black eyes.”
• No further news as of yet from the San Diego Union-Tribune, but I don’t think we’re going to see any major action until the creditors committee meeting on January 12.
• I’m experiencing some technological issues with my main computer (hence, scant email replies from me for a while; apologies). But I’ll have more for you on Monday.
• [Sunday morning item]: Nick Mamatas reveals some inside information. Soft Skull (and perhaps others) has held off on inventory until forming a short-term strategy. There was apparently a lengthy conference call with 55 publishers and 6 lawyers conducted on Friday. (I have confirmed with an independent source that there was indeed a conference call, with over 70 publishers represented.) The consensus was that these publishers decided to ship the books to the PGW Indianapolis warehouse, despite the risks, and hope that revenue would come right in. So we know that stock for some of the 150 publishers will continue to be offered for the time being. Let’s just hope that PGW will come through on the revenue front.
• [Additional Sunday item]: Critical Mass observes that Pages Magazine was operated by AMS.

The Gray Lady finally gets on the case, with reporter Julie Bosman speaking to an unnamed publishing executive. “The publishers are going to end up taking a huge loss,” says this executive. Also quoted in the article is Grove/Atlantic publisher Morgan Entrekin, who simply says, “It’s a mess” and who is reported as now being in something of a mad scramble. Entrekin has nothing more to say beyond these three words.

Okay, so the publishers aren’t talking (or at least going on the record with journalists). But I must quibble with this publishing executive’s asinine suggestion that “authors and readers were unlikely to be affected by the bankruptcy filing.” With AMS currently incapable of paying off their creditors, with a pennies-on-the-dollar turnaround at best, and with current AMS stock now being extricated from warehouses, it’s very likely you won’t be seeing independent books in stores anytime soon, until the publishers left in the lurch work out alternative distribution methods or guaranteed ways to earn current revenue. So readers looking for something different from, say, Laurell K. Hamilton and Mitch Albom are going to start seeing a difference.

And let’s consider the publishers, who are now in the process of bearing the financial brunt in ways that may very well go unreported. With reduced revenue coming in, it is unlikely that the affected publishers are going to be paying out advances to authors as they struggle to meet their operating expenses. Authors who are writing quirky or experimental books that don’t sell as well as the blockbusters often must go to independent presses to get their work published. But if the independent presses are hurting, then advances and acquiring new titles may be the least of the indie publishers’ cost concerns as this mess gets sorted out.

This morning, Publishers Weekly reported grimmer news, noting that the bankruptcy court is now in the process of granting the publishers access to the inventory. At the moment, access is now at the discretion of Judge Sontchi. A creditors committee meeting is now set for January 12, but with the creditors committee being comprised of the 20 largest creditors (i.e., the big publishers), it remains to be seen whether the precarious financial condition of indie presses will be taken into account by the committee.

Heidi MacDonald observes this morning that it remains unknown what distribution percentage Dark Horse had with PGW.

Sarah’s also investigating this, discovering this article that suggests financial inconsistencies on PGW’s part.

• The official press release from AMS.
• The Seattlest’s Jeremy Barker focuses on the effect on Seattle presses.
• Matt Wagner suggests that consolidation may not be good for small presses, even if PGW’s huge volume allowed for independent presses to get into big-box stores.
• Sarah points to the Canadian impact.
• At The Beat, comics publisher Actionopolis/Komikwerks offers a response. Shannon Eric Denton and Patrick Coyle relay their attorney’s thoughts: AMS is looking for a buyer, but that a “fresh start” will enable any new company not to take on the debt. So they may be more attractive now than they were before the bankruptcy filing.
• Dean Haspiel: “BOTTOM LINE: in order to succeed, the author has to become the publisher and the publicist and, sometimes, the printer, too.”
• Time Out New York is looking into the story.
• At the Engine, Heidi MacDonald asks people how the AMS bankruptcy will affect them. Among some of the highlights: Warren Ellis insists that HarperCollins will not get the advance back for his second novel and Comic Relief owner Rory Root pointed out, as Soft Skull’s Richard Nash suggested in the first AMS post here, that pennies on the dollar is the likeliest prospect for the creditors.
• Colleen Doran suggests that Dark Horse was expecting big money from Frank Miller’s 300. [UPDATE: In the interests of accuracy, it remains uncertain what degree of output Dark Horse had with AMS, but hopefully we’ll have more information on this soon.]
• Unrelated to all of this, but perhaps indicative of the current publishing climate is the Independent Press Association ceasing operations. (Thanks, Dan Wickett, for the link.)

As Sarah has reported this morning, about 150 independent publishers are in financial trouble.

Just before everybody popped open their bottles of champagne, Advanced Marketing Services filed for Chapter 11. Publishers Group West is owned by AMS. (PGW, which had operated independently for thirty years, was purchased by AMS in 2002.) And PGW is the exclusive book distributor for many of the independent presses you enjoy: Avalon, McSweeney’s, Soft Skull, North Atlantic, Shoemaker & Hoard, the list goes on.

All of these publishers are owed money by PGW for revenue collected during the last three months. And they haven’t received it. Nor are they guaranteed all of it. In other words, the monies that were collected during the last quarter of 2006, which includes the Christmas season, are now locked as AMS undergoes bankruptcy filing procedure. I don’t know how well Dave Eggers’ What is the What sold (perhaps someone with a Bookscan account might offer a sum), but given that this was positioned as the big McSweeney’s title, the loss must be staggering. To say that this will leave “pain in its wake,” as Michael Cader suggested yesterday, is something of an understatement.

In a story filed this morning, Publishers Weekly reported that Costco will operate “on a business as usual basis” and that publishers would soon have access to the inventory now being held in AMS’s Indiana warehouse, once they have received approval from the court. AMS has also had $75 million in debtor-in-possession financing approved, but it’s unknown when these funds will move. The San Diego Union-Tribune reports that AMS needs about $14 million to purchase new books to be delivered. But, again, these monies are to ensure that AMS remains in operation as they undergo bankruptcy restructuring and these are not necessarily monies that will find their way to all the publishers left in the lurch.

Publishers are remaining understandably silent about this major setback. After all, no man wants to confess the amount he has in his checking account. But given that many indie publishers operate from paycheck to paycheck, this may signal significant loss and possibly a death knell for more than a few of them.

Here’s a list of the top twenty-five creditors:

1. Random House ($43.3 million)
2. Simon & Schuster ($26.5 million)
3. Penguin Putnam ($24.6 million)
4. Hachette ($22.6 million)
5. HarperCollins ($18.0 million)
6. Publications International ($12.5 million)
7. VHPS ($9.6 million)
8. Andrews McNeel Publishing ($8.7 million)
9. John Wiley & Sons ($6.0 million)
10. Leisure Arts ($4.7 million)
11. Workman Publishing Company ($4.4 million)
12. Rich Publishing ($4.4 million)
13. Chronicle Books ($4.3 million)
14. Meredith Corporation ($4.3 million)
15. Houghton Mifflin Trade ($2.6 million)
16. Avalon Publishing Group ($2.3 million)
17. United States Playing Card Co. ($2.0 million)
18. Zondervan ($2.0 million)
19. Global Book Publishing ($1.7 million)
20. Cook Illustrated ($1.5 million)
21. Client Distribution Service ($1.4 million)
22. National Book Network ($1.1 million)
23. New World Library ($1.1 million)
24. Grove/Atlantic ($1.1 million)
25. Hugh L. Levin Associates ($1.0 million)

And that’s just the first twenty-five unsecured claims. That’s a total of $210.7 million dollars owed to these creditors. Clearly, $75 million isn’t going to be enough.

The big question here is how the creditors will be prioritized. If there is only a fraction of monies available for the creditors, will it be awarded to those with the largest bills (i.e., the big publishers) or will the Bankruptcy Court Judge understand the precarious position that independent publishers are in?

Judge Christopher Sontchi is presiding over the bankruptcy in Wilmington, Delaware. Judge Sontchi appears committed to moving things along. In the Home Products bankruptcy, Judge Sontchi permitted pre-bankruptcy claims of creditors to be paid in full before confirmation of a plan. Whether this will translate into a quick remedy for AMS’s tremendous debt remains to be seen.

It’s unknown what this will mean for PGW employees. Will PGW be purchased by another entity or will it struggle along under AMS’s ownership? For the moment, it appears that AMS will continue operations on a day-to-day basis.

I will keep tabs on this story as I learn more info.