Advanced Marketing Services Inc., (MKTS:US) a bankrupt book distributor for retailers such as Sam's Club and Costco Wholesale Corp., received a higher offer for its Publishers Group West unit.
National Book Network, a creditor, offered 85 cents on the dollar for all claims owed by the unit, according to documents filed yesterday in U.S. Bankruptcy Court in Wilmington, Delaware. National Book Network is a unit of Lanham, Maryland- based Rowman & Littlefield Publishing Group Inc., which publishes academic books. It is owed $1.4 million, according to court documents.
Last month the bankrupt company agreed to sell the unit to Perseus Books, which offered to pay 70 cents on the dollar on some publisher's claims. Under terms of the deal, the first 65 percent of publisher creditors to accept would receive that percentage; the remaining 35 percent would receive less. Last month, Judge Christopher Sontchi set a Feb. 12 hearing on whether to approve the sale to Perseus without holding an auction.
``It is a shock that they would go ahead without an auction,'' Jed Lyons, president and chief executive of National Book Network, said in an interview. ``The Perseus offer is not good for the estate in our opinion.''
Rich Publishing LLC, a publisher of personal finance books owed $4.4 million, is asking the court to postpone the hearing to allow time to consider the new bid and any other offers that might be made.
``The sales process clearly is ongoing and should not be curtailed arbitrarily or precipitously,'' Rich Publishing said in court papers yesterday.
At least four other creditors have objected to the Perseus sale, according to court papers. The Official Committee of Unsecured Creditors and lender Wells Fargo Foothill Inc. have also filed objections with the court.
Advanced Marketing sought protection from creditors Dec. 29 after failing to obtain financing. The San Diego-based company, with $823 million in sales in fiscal 2005, said in its filing that the 40 largest unsecured creditors are owed $224 million. The company has until March 9 to file schedules of debts and assets.
The Publishers Group West unit distributes books for independent publishers.
Rich Tauberman, outside spokesman for Advanced Marketing, declined to comment.
Shares of Advanced Marketing closed at 30 cents in over- the-counter trading, down 1 cent. The shares averaged about $3.50 last year and plunged after the bankruptcy filing.
Perseus Books, owned by Washington private-equity firm Perseus LLC, would receive a $500,000 breakup fee if a higher bid is received and approved by the court. Lyons said his company will pay the fee if its offer is accepted.
The bankruptcy case is In Re: Advanced Marketing Services Inc., 06-11480, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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