Veteran Canadian publisher Scott McIntyre described the dismantling of D&M Publishers, the iconic Canadian independent publishing house he cofounded 40 years ago, as the result of an unfortunate confluence of circumstances. Conditions for midsized independent publishers are especially difficult now, he told PW in a recent interview. “My own view is that there is room for the smaller, niche players at the bottom and there’s room for the majors, but the middle ground is a very uncomfortable place. But that’s the case in all the cultural industries and for book publishers everywhere in the English-speaking world, because you are up against people with deep pockets.”

But looking at D&M’s specific circumstances, he said, there were still many things that were going right. “We’d had a whole series of home runs— Douglas Coupland, Ishmael Beah’s A Long Way Gone, Will Ferguson. There was a series of high-end atlases that the University of California Press was buying very happy quantities of, and our U.S. sales were growing. It wasn’t a bad mix,” McIntyre noted. D&M had a lot of corporate partnerships. It was known for producing beautiful art books, but after the financial crash in 2008, institutions with endowments, such as art museums, had less money. “It was just a squeeze everywhere,” he said.

“The real issue for us was that we were too leveraged,” he acknowledged. “Certainly, Bookriff didn’t work and that cost money.” The company’s venture into a Web platform aimed at allowing consumers to create customized digital books was spun off into a separate company, but McIntyre said the investment still hit D&M’s balance sheet.

Even after the financial crisis eased, the market remained soft; no big bestseller emerged to buoy D&M, and its 17-year distribution deal with Farrar, Straus and Giroux, which was ending soon, McIntyre knew, was unlikely to be renewed. A multinational was interested in purchasing D&M, but after months of negotiations the buyer called it off. “When it turned out that it was killed at the last minute, that really pushed the bank,” McIntyre explained. “By then we had lost several precious months, at a time when we might have put the necessary equity in place another way. We had an offer from a group of Canadian investors, but by then it was too late.” D&M was left with no other option but to file for bankruptcy protection in October 2012.

The protection period had to be extended twice, but buyers were found for all of D&M’s imprints. “It was a pretty awful year to live through, but the outcome was a hell of a lot better than it could have been,” McIntyre said. “The publishing houses are saved, and they will all have ongoing publishing programs. And they are all still owned and headquartered in B.C.”

Victoria-based Heritage House Publishing bought Greystone Books, best known for its books on nature and the environment. “I identified Greystone as an ideal complement to what the Heritage House Group of publishers publishes,” said president Rodger Touchie. He added that interest from the David Suzuki Foundation—an environmental organization that had been copublishing some titles with Greystone—in continuing the relationship was also encouraging. Greystone founder Rob Sanders will be publisher and will have an equity position in the press, which just released its 2013 list of 14 titles.

Harbour Publishing, also based in B.C., bought the Douglas & McIntyre imprint. Harbour co-owner and cofounder Howard White said that having published alongside D&M for almost 40 years, he felt he couldn’t allow the imprint to be dispersed or leave the province. “I really felt that that would be a terrible tragedy for a number of reasons and quite apart from sound business reasons, that we should do what we could to keep the tradition going,” White said.

White said Harbour’s Douglas & McIntyre’s purchase “Strengthens us as a company. We now have a much-enhanced backlist and a stronger group of writers going forward, and a better-established national distribution system. We intend to keep all the D&M books that are out there now in print, available, and actively marketed, and support the D&M authors going forward.”

New Society, which had been a wholly owned subsidiary, bought itself back with help from its original investors.

Finally, three former D&M employees—associate publisher Chris Labonte, sales director Richard Nideau, and art director Peter Cocking—have created a custom-publishing startup, Figure 1 Publishing, which will pick up some of D&M’s partnerships and art books. “They are very energetic and they are young and they’re bright and they’re determined,” said McIntyre, adding that seeing the superb D&M team dispersed was one of the worst parts of the experience for him.

His advice for the new ventures and buyers? “It’s business 101. Control your overhead. Publishing is a business where pennies count. Don’t borrow too much money, and then obviously, publishing decisions have to be more disciplined than perhaps was once the case. We just don’t know where the Canadian market is going. Clearly, [Indigo] Chapters is buying significantly less than it was and more independents are closing, but in Canada, we’ve got [access to] the world English market” including the U.S. and the U.K.

McIntyre, who is almost 69, hasn’t decided what’s next, and is taking some time off to travel. “I’m surprised that I’m not feeling any nostalgia. I’m just delighted that we can get on with the next thing because there’s been a pretty happy resolution.”