March 5 – March 12, 2009 Edition

Hachette Sues SBTB
for Contract Breach,
SBTB Alleges Fraud

NEW YORK, NY/Authorlink News/03/04/09–Strictly By the Book, Inc., a remainders and overstock company, cross-filed a lawsuit February 24 against Hachette Book Group, Inc., for fraud and racketeering and asked for $5 million in damages. The action came after Hachette filed against SBTB February 11 for breach of contract.

Hachette claims SBTB owes it $5.6 million for failure to pay for stock it has received and for nonpayment of backoffice services provided to SBTC as part of its contract agreement. The case is filed in U.S. District Court for the Southern District of New York.

SBTB, based in Fall River, mass, signed a contract with Hachette in 2006 to help the publisher speed up shipments of remainders. Under the original agreement, Hachette was to serve as SBTB’s distributor and would provide inventory storage in its Indiana warehouse. Late last year, SBTB said it wanted to renegotiate the price of titles and that it wanted credits in excess of $1 million. SBTB then began withholding payments for books. Hachette claims the credits are unwarranted and says it is due more than $262,000 for services it provided as part of the distribution agreement.

SBTB says Hachette wants to take back its remainders distribution because the publisher saw how lucrative the business could be. The remainder company charges that Hachette has stopped shipping orders because of SBTB’s alleged failure to pay, and that the publisher is spreading rumors about the company’s solvency, prompting other publishers to reduce their lines of credit with SBTB, and thus hurting its ability to operate.

A spokesperson for Hachette said SBTB’s claims “are totally without merit and we are confident the court will come to the same conclusion.”