BTW News Briefs

Advanced Marketing Services Files Chapter 11

On December 29, Advanced Marketing Services, Inc., a San Diego-based wholesaler of general interest books that provides a variety of other services, including promotional and advertising services to publishers, announced it had filed a voluntary petition under Chapter 11 of the Federal Bankruptcy Code in United States Bankruptcy Court for the District of Delaware. The Chapter 11 proceeding does not include the company's international subsidiaries in the United Kingdom, Mexico, and Australia. AMS also announced that, in conjunction with the filing, it has entered into a loan agreement for $75 million in Debtor-in-Possession (DIP) financing from Wells Fargo Foothill, Inc., subject to court approval.

According to the San Diego Union-Tribune, the move was designed to protect AMS from its creditors as it looks to sell or refinance the business. In September 2004, AMS was rocked by scandal when Marcy Wilson Roke, the former director of advertising of AMS, pleaded guilty to criminal charges for participating in schemes to improperly inflate AMS's earnings. In addition, in early December 2006, Sandra Miller Christie, the company's former vice president of advertising, was sentenced to 36 months in prison for her role in the fraud, the San Diego Union-Tribune reported.

Vermont Joins the Streamlined Sales Tax Project

The Burlington Free Press reported that, starting January 1, 2007, Vermont had instituted sales tax changes "designed to pave the way for taxing Internet sales" so the state is compliant with the Streamlined Sales Tax Project.

According to projections, Vermont expects to collect $7.3 million more in sales tax in the next fiscal year, according to Sara Teachout, an analyst with the Legislative Joint Fiscal Office, the Free Press noted. Of the additional revenue, Economic Development Commissioner Mike Quinn told the newspaper, "I think this is an incidental outcome of joining the group," Quinn said of Vermont's participating with other states in the streamlined sales tax project. "The concept was more to put us on a level field" so that bricks-and-mortar shops aren't a competitive disadvantage with online retailers who do not charge sales tax on purchases.

However, a number of business and companies in Vermont are against the sales tax changes, including IBM, which argues that the code amendments will cost its operations in the state as much as $100,000 a year, the Free Press noted.