Advanced Marketing Services Inc.'s proposed sale to rival book distributor Baker & Taylor for $76 million will proceed without a bankruptcy auction.
Advanced Marketing received no offers exceeding Baker & Taylor's bid, company attorney Suzzanne Uhland said today. U.S. Bankruptcy Judge Christopher Sontchi ordered the San Diego-based company to hold an auction if it received a matching offer or higher by yesterday.
``The auction will not be proceeding,'' Uhland told Sontchi in Wilmington, Delaware. Jenny Johnson, a spokeswoman for Charlotte, North Carolina-based Baker & Taylor, didn't immediately return a call seeking comment. Baker & Taylor is owned by New York-based private-equity firm Castle Harlan Inc.
Advanced Marketing's creditors objected when the company tried to sell its Publishers Group West unit without an auction, as is typical in Chapter 11 bankruptcies. Those assets were bought by Perseus Books LLC, a New York-based book distributor, which agreed to pay Publishers Group's creditors 70 cents on the dollar for their claims, about $17 million, Perseus Chief Executive Officer David Steinberger said in an interview today.
Advanced Marketing filed for bankruptcy protection Dec. 29, three years after the U.S. Justice Department and Securities and Exchange Commission began investigating its financial reporting and advertising practices, according to court papers. The company has resolved all shareholder lawsuits it faced.
Founded in 1982, Advanced Marketing sells mainstream books from the publishing houses through warehouse retailers like Wal- Mart Stores Inc.'s Sam's Club and Costco Wholesale Corp. Publishers Group West sells books from smaller publishers, mostly through bookstores.
Shares of Advanced Marketing fell 1 cent to 10 cents in over-the-counter trading in New York.
The case is In Re: Advanced Marketing Services Inc., 06- 11480, U.S. Bankruptcy Court, District of Delaware (Wilmington).
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