Three years after Bookland of Maine, once one of New England's largest regional bookstore chains, declared bankruptcy, it was awarded $6.6 million against its former accounting firm. All eight jurors in Maine Federal District Court found that Bookland's accounting firm, Baker Newman & Noyes, failed to notify it of financial discrepancies. As a result, thinking that it was operating profitably, Bookland embarked on the costly expansion plan that led to its Chapter 11 bankruptcy filing in May 2000.
"We were pleased," Bookland's bankruptcy attorney, Jeff Thaler of Bernstein, Shur, Sawyer & Nelson, told PW. "It was unanimous. They found for us on all three counts: breach of contract, negligence and negligent representation." The award, which was for the full amount that Bookland asked for, will cover approximately $3.8 million in unsecured vendors' claims; money owed to employees for vacations and sick days; $420,0o0 in administrative and legal expenses connected to the bankruptcy; and shareholder equity.
According to Baker Newman & Noyes's attorney Peter Culley of Pierce Atwood, the award should not have exceeded $527,000. "We're still reviewing this. Certainly we're going to seek relief from the court, whether at this level or the Appellate Court," he said.
Despite the verdict, there are no plans to relaunch Bookland. The company had closed four stores before the bankruptcy and then sold the other nine stores in Maine and New Hampshire. Still, for former CEO and president David Turitz, the decision is "extremely gratifying, to have what I did vindicated by these jurors. I spent my whole life in this business, first on the ID side and then in retail."
