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Access Publishers Network Declares Bankruptcy
Judith Rosen -- 7/24/00
In response to a filing of a Chapter 7 petition to liquidate the company by five former clients, Access Publishers Network (Grawn, Mich.) has filed a motion to convert to Chapter 11. At the time of the Chapter 11 conversion earlier this month, three additional creditors had filed petitions and four or five other motions were awaiting signatures, according to attorney Tim Curtain, who filed the Chapter 7 petition with the U.S. Bankruptcy Court in Grand Rapids, Mich. The original five publishers--Bluestar Communication, Diamond Books, Oakhill Press, Omega Publications and Penmarin Books--were owed a total of $400,000 to $500,000. Access's top 20 creditors are owed slightly more than $1 million.
The Chapter 7 filing "wasn't totally unexpected, given that there were folks that were disgruntled," said Terry Jones, director of sales and marketing for Access. "We did have a plan to refund the company, but it got put on hold as a result of the filing." For now, Jones added, "We are continuing to operate as normal, and we are continuing to accept new orders."
At press time, it was not certain what would happen with publishers' stock stored by Access or if publishers would be able to cancel their contracts, which typically end either January 1 or June 1. Under Chapter 11 proceedings, Access will not need to pay any outstanding debts owed prior to the Chapter 11 filing until after a reorganization plan has been approved.
In a note to Access clients that went out in mid-July, president and CEO David Reecher stated that "Access is maintaining its staff and physical plant operations as it formulates a business plan and plan of reorganization. Access is looking at various alternatives, including selling the distribution portion of Access or having an established group of publishers take over the distribution portion of Access on terms agreeable to the creditors."
The turn of events has been devastating for some small startups that recently signed with the company. One, who asked not to be named, remarked, "They owe me thousands of dollars and this is our initial capital. It's going to set us back a year or two. We won't be able to publish in 2001."
Access, which handles distribution for approximately 300 small and micropublishers that do as few as two books a year, had annual sales of $4 million at the time of the filing. The 10-year-old company, which was originally founded as Publishers Distribution Services, was purchased by Great Wisdom Publishing, a division of International Media Holdings, Jacksonville, Fla., in 1996.
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