An area publisher will not be the new owner of a now-bankrupt independent book distributor, a judge ruled late Friday.
Distributor National Book Network, the country’s third-largest book distributor, which is owned by Roman & Littlefield Publishing Group of Lanham put in a late bid this month to take over Publishers Group West, after PGW’s parent company filed for bankruptcy in December.
The parent company’s financial problems had caused PGW to halt payments to its clients. As a result, National Book Network and New York-based independent publisher Perseus Books Group sued PGW, leaving it up to Judge Christopher Sontchi of the Federal Bankruptcy Court in Delaware to decide which company would take over the business. Sontchi ruled in favor of Perseus, much to the dismay of National Book Network Chief Executive Officer Jed Lyons.
“We’re very disappointed,” Lyons said Friday. National Book Network had originally offered to pay PWG’s clients 85 percent of what they were owed as compared to Perseus’ offer of 75 percent. Friday morning, Lyons’ firm increased its offer to pay the clients 100 percent, but still lost the bid.
“There were some of the publishers in the courtroom today, and they were not happy with the decision,” Lyons said.
Lyons said the judge ruled in favor of Perseus because many of PGW’s clients had already signed with Perseus before National Book Network made its bid, and declined to switch over after National Book Network jumped in.
“Ironically, although our offer generated more cash for the bankrupt company, we were unable to convince the court that Perseus’ calculations were based on assumptions,” he said.
National Book Network still could benefit from the situation, as not all of PGW’s clients have signed with Perseus, and many have expressed interest in signing with National Book Network instead, which Lyons said they legally would be free to do.
“So there’s a silver lining in there for us,” Lyons said.
In a statement, David Steinberger, president and CEO of Perseus Book Group, expressed satisfaction with the ruling.
“We are excited to move forward as quickly as possible to write checks to PGW clients and to provide some certainty for PGW employees,” Steinberger said.
