In the latest step in the Chapter 11/Subchapter V voluntary bankruptcy it filed for in April 2024, children's publisher Albert Whitman last month submitted a plan for reorganization that proposes to pay unsecured creditors—including authors and illustrators—a portion of the money they are owed over the next five years.

Under the plan, Whitman will pay unsecured creditors a total of just over $1 million, about 52% of what those creditors are owed. The funds will come from the cash flow (termed “disposable income” in the filing) that the publisher expects to generate over the period.

According to Whitman’s analysis, the plan to remain in business provides “a far better chance” to pay unsecured creditors than a move to Chapter 7, under which the company’s assets would be liquidated to pay creditors.

According to the filing, made in the U.S. Bankruptcy Court for the Northern District of Illinois, the distributions to unsecured creditors would not begin until 2027 and would only get to more than $100,000 by 2028.

The filing also includes two noteable sources of income for Whitman in 2026: $220,000 from the Anthropic settlement and a total of $300,000 from the sale of all its interests in books written by Hallee Adelman, which include the popular Way Past series that Whitman has published.

In its financial analysis, Whitman expects revenue will remain over just over $3 million through 2031, but expects that cost controls will lead to a steady increase in cash flow.

If the plan is approved, John Quattrochi and Pat McPartland will continue to run the company as president and publisher, respectively. The revamped Whitman will be focused on its core children’s book publishing business.

Following its failed attempt to establish a large multimedia operation, Whitman is now involved in a legal fight with Attila Gazdag, who sued the company after he was fired as head of Albert Whitman Media. In a filing, Whitman claimed that Gazdag had promised to create a $7 million media group but, at the time of his firing, had generated only $16,500 in revenue.

Whitman said that while it is not totally giving up the idea at expanding its media presence, it will streamline its plans by “maintaining relationships with production partners and content distributors to ensure steady revenue generation and minimize production overhead costs.”

Whitman hopes to have the plan approved by June.