After more than a year of layoffs and complaints of nonpayment from creditors as it struggles to restructure, San Francisco-based independent publisher MacAdam/Cage may have found a way out of its financial crunch. MacAdam/Cage publisher David Poindexter said he has secured a new investor who has agreed to provide an immediate six-figure loan to stablilize the finances of the cashed-strapped publishing house in addition to an agreement to sell up to 30% of the company to the same investor for about $1 million.

The deal comes as MacAdam/Cage struggles to recover from the combined effects of a tough economy, high overhead and unanticipated high levels of returns. A growing number of MacAdam/Cage authors have complained that they have not received royalty statements or payments and said that the house often will not return their calls.

MacAdam/Cage editor-in-chief Pat Walsh, who left the house in 2005 and returned in 2008, acknowledged the recent complaints calling them, “a continuation of the financial problems we’ve had for awhile.” Walsh blamed the house’s troubles on returns and the switch to a new distributor, PGW, but also acknowledged that the house—which at one time had a staff of 14 and published about 36 books a year—had been overstaffed and likely was publishing too many books. Over the last year the house has laid off its entire staff—only Walsh, Poindexter and the art director remain—and suspended its payroll. Walsh claimed that even he has not been getting paid.

Walsh also acknowledged that they have not always been in contact with their authors, blaming the lack of communication on “logistics. There are only three of us left here and we have nearly 400 authors. We haven’t done a good job of keeping in touch.” But he said the cash infusion would be used to “take care of our obligations.”

Poindexter said the new investor wanted to remain anonymous for now. He said he has signed a letter of intent to receive an immediate private loan which will be delivered in one payment and said that he will sell up to a 30% stake in MacAdam/Cage for a low seven-figure investment that will be delivered in “stages” over time based on the house achieving a number of benchmarks. He also blamed the house’s problems on switching distributors and excessive returns and cited a “lack of capital” that basically left the house unable to make payments of any kind.

“Rasing capital has been tough,” said Poindexter about his efforts to restructure MacAdam/Cage in the midst of a recession. But he said the new investor was interested in both the house’s 400-title backlist and its potential for licensing for movies. “He recognizes that publishing is a longterm business,” Poindexter said.