General Publishing Group Assets to Be Sold
Roxane Farmanfarmaian -- 2/14/00
Seven months after L.A.-based General Publishing Group closed its doors (News, June 28, 1999), its assets are scheduled to be sold by the U.S. Bankruptcy Court for the Central District of California, in a public hearing on February 16. The assets, which the motion for sale describes as consisting of 261,000 books, accounts, intellectual property, films and the right (but not the obligation) to assume and assign GPG's executory contracts, carry a starting price of $400,000.
J.G. Press, a remaindering firm in Dighton, Mass., has already entered into an asset purchase agreement with the court Trustee, David L. Ray. In the event J.G. Press is outbid by another buyer, the company is entitled to a $25,000 break-up fee. The assets are being sold free and clear of all liens, claims, encumbrances and interests, including those of City National Bank and Larry Sloan (both investors in GPG), and of possessory liens by Mercedes Distribution Center, GPG's fulfillment warehouse in Brooklyn, N.Y., and by TIPS Transportation Management Inc. Once the sale is final, however, payment of possessory secured claims may be made.
On January 19, at J.G. Press's behest, the court filed a motion to delay by three weeks the deadline to assume or reject GPG's approximately 100 author contracts. In order to assume a contract, the buyer must "provide all necessary cure payments," i.e., pay unpaid royalties and other outstanding financial obligations. By extending the review period on the contracts, the court in essence is allowing the buyer to cherry-pick the ones that are most valuable and/or do not carry high outstanding payments.
Only one pair of authors, Gerald N. Hill and Kathleen Thompson Hill, who wrote The Real Life Dictionary of the Law and The Real Life Dictionary of American Politics, have succeeded, through representation by bankruptcy attorney John MacConaghy, to reappropriate the rights to their work. According to Gerald Hill, "GPG had breached our contract even prior to going bankrupt by not keeping our books in stock and by not paying royalties in April and October, as stipulated on paper. Instead, they sent a letter stating they were switching to once-a-year statements and payments--which they couldn't do unilaterally." MacConaghy, however, indicated that the Hills were able to recoup their rights due to a technicality for which most of the GPG authors would not qualify.
Harriet Zeitlin, coauthor with her husband, David, of Shooting Stars, a historical compendium of photographs taken by famous people in the '50s, is more typical of ex-GPG authors whose rights are in limbo. Zeitlin, who said she received $10,000 of the $15,000 advance she was promised, and no royalties at all (or even royalty statements), feels frustrated at having lost claim to her book's rights and having no access to the copies still in print.
If the buyer of the assets decides against assuming a contract--and its outstanding payments--the rights automatically revert to the author. If, on the other hand, the contract is assumed--a likely outcome if few royalty payments are due--the authors on the GPG roster will probably see their books remaindered while their rights languish.
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