In a fast-developing financial crisis that is already being called "the Enron of the library world," hundreds of academic and medical libraries and publishers are facing losses approaching $100 million in subscription fees after Faxon Library Services, a leading subscription agent, abruptly shut down its offices and stopped fulfilling orders.
In the last two weeks, Faxon Library Services, also known as RoweCom, has laid off its sales staff and ceased business operations. The problems can be traced to a company known as Divine Inc., Faxon's parent company, which has reportedly siphoned off all of Faxon's assets to support its other businesses. Divine has confirmed that it will exit the content subscription business and has retained DSI, a Chicago firm specializing in bankrupt businesses, to handle former Faxon clients. Divine Inc. acquired Faxon in 2001 for $14 million.
Three major journal publishers (Elsevier, John Wiley and Blackwell) have joined together to fulfill Faxon's subscription services through January. Those publishers, along with an unnamed major research library, have also formed an informal committee to investigate Faxon's financial situation. The committee is open to all publishers and customers of Faxon and can be reached by e-mail at adhoccommittee@nyc.rr.com.
