Advanced Marketing Services filed a motion last week asking the judge who’s overseeing the company’s bankruptcy to force Baker & Taylor to pay AMS $6.2 million that AMS alleges B&T wrongly withheld when it made its final payment to acquire the majority of the bankrupt distributor’s assets. In March, B&T bought certain AMS assets for $20 million plus additional payments over the next 90 days that could have brought the total to as much as $76 million. According to the motion, when the final installment came due in May, B&T paid $4.1 million rather than the $10.3 million that AMS had been expecting.

The decision to not pay the full amount, AMS said, is based on B&T’s “unfounded and patently erroneous interpretations” of the Asset Purchase Agreement. B&T alerted AMS that it was withholding the $6.2 million in an April letter from B&T CEO Richard Willis, and AMS said that its attempts to resolve the dispute since then have proved fruitless, prompting it to file the motion. AMS believes Judge Christopher Sontchi has it within his authority to decide the issue without any need for further discovery or an evidentiary hearing. The motion is set to be heard August 15 and objections can be filed by August 8.

There are three main areas in dispute. B&T claims it is entitled to $2.0 million that had been in AMS’s bank account at the time of the closing. While the APA stipulates that B&T is entitled to certain cash and cash equivalents at the time of the closing (March 19), there is a disagreement over exactly when the closing took place and whether the funds were an “excluded asset” (AMS’s belief) or a “post-closing transaction asset” (B&T’s contention). AMS wants B&T to pay 22.5% of the $2 million, or $459,893.

Returns, unsurprisingly, are at the heart of a second disagreement. B&T contends that $2.5 million in returns that were in transit on March 19 are the responsibility of AMS. In its motion, AMS argues that according to the terms of the APA, returns must have been received by AMS by the closing for the books to be its responsibility, not merely in transit. Since the returns are B&T’s responsibility, AMS contends, the wholesaler should add back 77.5% to accounts receivable that B&T deducted for the returns, an amount totaling just under $2 million.

The largest area in question is $4 million in various deductions taken by B&T, including $2.1 million related to co-op advertising. According to AMS, B&T deducted $1.6 million from accounts receivable, maintaining that co-op advertising falls into the category of “allowances, reserves or deductions for doubtful accounts.” AMS has never classified co-op advertising this way, so B&T had no right to deduct the $1.6 million, AMS asserts. As a result, $1.3 million should be added back to accounts receivable, AMS says. B&T is also not entitled to a $415,550 post-closing deduction that, AMS argues, B&T never “tried to defend or explain.”

The final $2.6 million under dispute falls into the “other deductions” category, which AMS says B&T unilaterally withheld, supplying no documentation. AMS added that it learned independently that the deductions were for a $1.5 million holdback on payments by BJ’s—which AMS says was paid on May 21—and a $720,000 pricing dispute with Sam’s Club that AMS says it previously informed B&T about and that AMS had supplied B&T with documentation rebutting Sam’s claims. With all those objections, AMS wants B&T to add back $2 million to the $2.6 million it had deducted from accounts receivable.

B&T’s response to AMS’s motion had not been filed at press time.