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US publishers still reeling from Borders bankruptcy

Top American publishing firms, including Penguin, Hachette and Simon & Schuster, are still owed tens of millions of dollars, following the liquidation of Borders in 2011.

Borders: bankrupt but still causing problems for publishers Photo: Alamy

The closure of Borders Group, Inc. in the United States is still causing problems for the publishing industry, two years after the nation’s number two bookseller closed down.

According to a report in Publishers Weekly, the 20 largest unsecured publishing creditors were owed $241 million when the company filed for chapter 11 bankruptcy protection (equivalent to being placed into administration in the UK) in February 2011.

It’s not yet clear which publishers have settled, but figures have emerged showing the extent they were left out of pocket and how much they have so far been remunerated.

Penguin Putman was owed $41 mllion and has only received $12 million. Hachette Book Group was owed almost $37 million and has only been paid back $.4.9 million. Simon & Schuster was owed $33.7 million and has received $10.7 million.

During a 90 day prefential period before Borders finally filed for chapter 7 bankruptcy (equivalent to liquidation in the UK) in September 2011, $485 million was paid out to 1,786 suppliers. 72 per cent of the payments went to just 5 per cent of Borders’ suppliers, including two large distrubutors (Ingram, which received $41.6 million, and Baker & Taylor, which received $26.6 million).

At present, there is no indication when or how one of the industry’s most damaging bankruptcy sagas will end. A number of prominent publishers were paid substantial amounts during the 90 day payment, but some are thought to be contesting their settlements (see tables below). Sourcebooks, an independent publisher in Chicago, is one creditor that has opted to fight rather than seek mediation, according to Publishers Weekly.

Borders in the UK was established in 1998 as a subsidiary of Borders Group, Inc. and became independent of the US firm in 2007. At its peak, it had 41 stores under the Borders name and 28 under the Books etc banner. Borders UK went into administration in November 2009and the final stores shut down on Christmas Eve the same year.

In America, Borders operated 625 superstores and retail outlets, including Waldenbooks and Borders Express. All stores closed their doors for the last time on September 8 2011. Users of the US website were redirected to Barnes & Noble.

Top 20 largest unsecured publishing creditors and how much they are claiming:

Penguin Putnam $41,118,914

Hachette Book Group $36,879,656

Simon & Schuster $33,757,445

Random House $33,461,062

HarperCollins $25,793,451

Macmillan/MPS $11,434,306

John Wiley & Sons $11,191,435

Perseus Distribution Services $7,776,292

Source Interlink Companies $6,879,906

F&W Media $4,546,275

Houghton Mifflin Harcourt $4,400,756

Workman Publishing $4,003,126

Diamond Comic Distributors $3,906,550

McGraw-Hill $3,093,871

Pearson Education $2,784,766

Rosetta Stone $2,226,553

National Book Network $1,956,713

W.W. Norton & Company $1,940,826

Zondervan $1,886,752

Hay House $1,886,752

Top 15 largest publishing recipients of 90-Day pre-bankruptcy payments and how much they have received:

Ingram, consolidated $41,619,186

Baker & Taylor, consolidated $26,618,409

Random House $24,288,723

Source Interlink Companies $16,870,502

HarperCollins $14,067,121

Penguin Putnam $12,195,486

Simon & Schuster $10,729,556

Macmillan $6,799,147

Hachette Book Group $4,895,524

Kobo $4,727,613

Perseus Distribution Services $3,743,373

John Wiley & Sons $2,121,193

Melissa & Doug $1,378,425

Publications International $1,183,387

Sourcebooks $1,019,558

(Information supplied by Publishers Weekly)

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