Month / January 2007

by Edward Champion

What the AMS Bankruptcy Means for the Publishing Industry

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.

by Edward Champion

“Against the Day” Roundtable, Part Three

[NOTE: The discussion can also be followed at Metaxucafe. Previous installments: Part One (Max) and Part Two (Carolyn).]

against3.jpgThe New Chums of Chance rose further into the sky, wondering if Pynchon’s opus would take them into the heliosphere and whether the airy confines of the hydrogen airship Roundtable Discussion would cause many of them to become light of head. Fortunately, Major Megan Sullivan put a halt to the flames, pointing out to the loyal crew (all perusing Pynchon) that oxygen was becoming nowhere nearly as plentiful as it once had, and offering the following observations on Part One:

I’ve only read The Crying of Lot 49, so this is my first foray deeper into the Pynchon forest and it’s taking me a while to find a path. He keeps taking me off course, introducing new characters and ideas on almost every page it seems. Like Max mentioned, I feel the need to look up every reference on Google.

One interesting aspect of the first section was the tone Pynchon used with the Chums of Chance. They speak archaically, like Max said, with a quaint and antiquated speech. Yet Pynchon goes out of his way to contrast the goodness of the Chums with the reality of the time period. He paints Chicago as it truly was, not as how one might expect it to appear in a boy’s magazine. “Somewhere down there was the White City promised in the Columbian Exposition brochures, somewhere among the tall smokestacks unceasingly vomiting black grease-smoke, the effluvia of butchery unremitting, into which the buildings of the leagues of the city lying downwind retreated, like children into sleep which bringeth not reprieve from the day.”

And what are the Chums’ role in the novel? The Chums seem unreal. Like Socrates in The Clouds, they live in the sky oblivious to what’s occurring on the ground beneath them. Are they to keep the action moving throughout this long novel? It’s a relief to get back to the Chums after pages of introductions to new characters—they’re like old friends. It will be interesting to see how they develop in the next parts of AtD.

* * *

The Quite Balding Moderator interjects:

I’ll have more to say about the Chums of Chance very soon, once I’ve followed Mr. Parr’s prodigious post (forthcoming). But I put forth Megan’s question to Pynchonites of all stripes (including those reading this roundtable discussion): I like the Chums of Chance very much, but I feel that their presence is very much ancillary to the narrative. Like Michael Moorcock, I believe that Against the Day is very much using dime novel conventions to raise larger and serious questions about how wizards of science were viewed in the early days of the 20th century, particularly with the ragged pursuit of cash. But if the form is sprawling, with often tertiary connections among the characters, then are the Chums the clearest membrane between reader and writer? Are these “old friends” the very conduit which permits us to steer through the narrative?