MAIN NEWS HEADLINES
August 2 – August 9, 2006 Edition
AMS Files Claim
Against Baker & Taylor
for Withhlding Payments
WILMINGTON, DELAWARE/7/31/07–Advanced Marketing Services has filed a court motion claiming that Baker & Taylor has unlawfully withheld $6.2 million owed to the bankrupt AMS as part of B&T’s acqusition of a large share of AMS assets.
Baker & Taylor, which acquired most of AMS’s assets for $20 mllion in March, was to make additional payments over a three month period, bringing the total sale price to about $76 million. In May, however, AMS received a final payment of $4.1 million, substantially less than the$10.3 million the bankrupt distributor had expected.
Baker & Taylor told AMS in April that it was withholding the $6.2 million on several grounds. First, B&T said it is entitled to withhold the $2.0 million in AMS’s bank account at the time of closing on March 19. But AMS charges that some of those funds were either excluded or occured after closing, according to its Asset Purchase Agreement.
AMS claims that Baker & Taylor’s refusal to pay is based on “erroneous interepretations” of the Agreement and wants B&T to repay $459,893–22.5% of the $2 million in the bank on the closing date.
AMS is also disputing $4 million in deductions taken for a number of items, including $2.1 million in co-op advertising, and wants B&T to adjust its accounts receivable in favor of AMS.
The two companies are also arguging over who is to bear the cost of $2.5 million in returns that were “in transit” at the time of the March 19 sale. AMS says it is responsible only for returns actually “received” upon the closing date, thus books in transit at the time are B&T’s responsiblity, meaning that B&T should owe AMS for that inventory. AMS is asking in its court petition for 77.5% of that amount, or about $2 million.
Another $2.6 million for miscellaneous deductions is also in dispute, and AMS is asking the court to order the return of $2 million to accounts receivable for amounts involving a Sam’s Club price dispute and other claims.
In all, the disputed amounts total $6.2 million.
The motion is scheduled for a court hearing on August 15 with a deadline of August 8 for filing of objections. An Authorlink request to Baker & Taylor for more information was answered by B&T spokesperson Jenny Johnson, who said: “As this issue is part of ongoing litigation, we have no comment.”
AMS filed a separate motion July 27 to shift certain claims responsibilities away from AMS to PGW, which was acquired earlier this year by Perseus Books Group as part of the bankruptcy proceedings. Objections are to be received by the court on or before August 6.