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More Problems For LPC
posted on by Scott Green
The problems continues for LPC, the company that distributes graphic novels to book stores for companies such as Dark Horse Comics, ComicsOne, and TOKYOPOP. CounterPunch reports that after its recent bankruptcy, the bank which originally seized $1.2 million from the distributor's account is threatening to repeat the action when LPC receives this month's payments from book warehouses. The payments are due May 1st.
The problems continues for LPC, the company that distributes graphic novels to book stores for companies such as Dark Horse Comics, ComicsOne, and TOKYOPOP. CounterPunch reports that after its resent bankruptcy, the bank which originally seized $1.2 million from the distributor's account is threatening to repeat the action when LPC receives this month's payments from book warehouses. The payments are due May 1st.
In an effort to resolve the matter quickly, some publishers tendered a generous offer. It would have allowed the bank to keep the $1.2 million already taken and be paid an additional $750,000 of publishers' money over 10 months, amounting to about 80% of what the bank is after. Bank One turned it down cold.
85 publishers use LPC Group as a distributor for their books. LPC had a loan from the bank, with about $2.7 million outstanding. No publisher had signed onto the loan. Most if not all were unaware that LPC had obtained it. The bank acknowledges that LPC was not behind in loan payments. It recalled the loan after deciding LPC was a bad credit risk, essentially asking publishers to pony up for its own bad business choices.
Bank One's position is straightforward. Yes, the contracts between publishers and LPC all stipulate that the books belong to the publishers and are under consignment. But the publishers failed to file forms with state governments that would have "perfected" the consignment. Had they done so prior to the loan from the bank in 1999, publishers would have had first claim to the books and resulting sales. That publishers were unaware of the loan and had no way of knowing it was about to be made in '99 is irrelevant, according to the bank.
In an effort to resolve the matter quickly, some publishers tendered a generous offer. It would have allowed the bank to keep the $1.2 million already taken and be paid an additional $750,000 of publishers' money over 10 months, amounting to about 80% of what the bank is after. Bank One turned it down cold.
85 publishers use LPC Group as a distributor for their books. LPC had a loan from the bank, with about $2.7 million outstanding. No publisher had signed onto the loan. Most if not all were unaware that LPC had obtained it. The bank acknowledges that LPC was not behind in loan payments. It recalled the loan after deciding LPC was a bad credit risk, essentially asking publishers to pony up for its own bad business choices.
Bank One's position is straightforward. Yes, the contracts between publishers and LPC all stipulate that the books belong to the publishers and are under consignment. But the publishers failed to file forms with state governments that would have "perfected" the consignment. Had they done so prior to the loan from the bank in 1999, publishers would have had first claim to the books and resulting sales. That publishers were unaware of the loan and had no way of knowing it was about to be made in '99 is irrelevant, according to the bank.
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