Goofy Foot Wins One for the Small Presses

by Judith Rosen, PW Daily -- Publishers Weekly, 4/6/2007

One of the last PGW clients without a new distributor, Oregon's Goofy Foot Press, is close to signing a new agreement with National Book Network after a number of torturous weeks, which culminated in an appearance by founder Paul Joannides at U.S. Bankruptcy Court in Delaware.

In mid-February, when PGW stopped making its weekly post-petition payments for sales of Goofy Foot's only title, Joannides's sex manual, Guide to Getting It On!, the cash-strapped press filed for payment. At last week's hearing, Judge Christopher Sontchi signed an order requiring PGW to pay the $22,000 it owed Goofy, and also issued a stern rebuke to AMS's attorneys. He called their treatment of Goofy Foot and other small presses, from whom he had received numerous letters, "outrageous" and threatened to withdraw the executive compensation order for bonuses. According to the hearing transcript released this week, the judge said their actions were "inconsistent with the representations that were made to the Court for the basis to approve the PGW sale to begin with," and added that if the sale hadn't already gone through, he would have stopped it.

Goofy Foot is only one example of the tough financial conditions that many former PGW clients are confronting. When AMS filed for Chapter 11 bankruptcy, it may have seemed that major unsecured creditors like Random House, which was owed more than $43.3 million, were the biggest losers. But, explained Joannides, it was far worse for small houses. Although Goofy Foot's pre-petition claim of $66,000 is only a fraction of what Random is owed, the press relied on PGW for 95% of its income. In addition, the timing of the filing meant that PGW held all its publishers' income from holiday sales. One business day later would have forced it to pay for September. Those pre-petition claims will probably not be paid until some time next year.

Part of what fueled Judge Sontchi's anger was PGW's lack of concern about jeopardizing the livelihood of presses like Goofy Foot, who chose not to accept Perseus's offer and also refused to sign PGW's stipulations. According to Joannides, the stipulations are "eight pages of legalese which took away your right to dispute any charges, but there was no time limit where they could come up with charges." He said that many who signed—35 as of March 28—were coerced by the threat that they wouldn't get their books back or that they wouldn't get all their post-petition money. In addition, PGW wanted Goofy Foot to pay for any returns up front, even though Goofy's return rate is 1.8%.

Since the hearing, Goofy Foot has been paid, as have the other presses whose post-petition payments were held up. Now, said Joannides, he'd like to shower all this off and move on. As for releasing books still held by PGW, a hearing will be held on April 20.