Following the loss of a breach-of-contract lawsuit in late August, New Millennium Enterprises filed for Chapter 11 bankruptcy earlier this month. The filing came just days before the publisher announced that it signed former New York Times reporter Jayson Blair to a book deal.

Michael Viner, chairman, publisher and cofounder of New Millennium, told PW that his company filed for reorganization to avoid putting up a bond while it appeals the court ruling. The case involved an anthology of mystery stories, The Mighty Johns , edited by publisher and bookseller Otto Penzler, who contended his reputation was harmed when New Millennium released a shoddy version of the book without giving him an opportunity to proof the pages. In August, a jury agreed, awarding Penzler $2.8 million in damages.

Penzler's attorney Nicholas Gravante Jr. said he did not know about the bankruptcy filing but added that during the court proceedings Viner had threatened to file for Chapter 11 if the court ruled against him. Gravante, whose law firm Boies, Schiller & Flexner is representing Penzler pro bono, said he'll continue to seek the settlement money even if it means going after Viner's personal assets. "This is not going to limit our pursuit of achieving justice for Mr. Penzler, not one iota," Gravante said.

Despite filing for Chapter 11, Viner said the company is doing well and continues to operate as usual.

As for the Blair book, which will be titled Burning Down My Master's House: My Life at the New York Times , Viner said it will be published in March with a first printing likely to run from 200,000 to 250,000 copies. Viner said Blair got a six-figure advance for the book. Though larger publishers reportedly shied away from Blair, Viner isn't worried about his battered image. "There are a lot of books that upset people, by people like Ann Coulter and Michael Moore and now Al Franken," said Viner. "They've all upset a lot of people and it hasn't meant that they haven't sold."