Koen Files Chapter 11

Bookseller Asks Others to Help Distributor Begin New Chapter

On Monday, July 11, in U.S. District Court in New Jersey, Koen Book Distributors filed a voluntary petition for reorganization under Chapter 11 bankruptcy protection. The news comes a week after the distributor announced that, due to cash flow problems, it would not be filling orders for Harry Potter and the Half-Blood Prince.

Jim Di Miero, director of marketing for Koen, stressed to BTW that he hopes the filing will enable the company to move forward. "It is important that everyone understand that we're not going out of business," he said. "Chapter 11 gives us a chance to restructure our line of credit and affords us the opportunity to review and restructure our other financial obligations. It is our intention to continue shipping books without interruption."

According to the bankruptcy filing, Koen's 20 largest unsecured claims total some $13.9 million. Among its largest debts, the company owes $2.8 million to Random House, $2.6 million to HarperCollins, $1.6 million to Penguin Group USA, $1.5 to Simon & Schuster, and $1.4 million to Time Warner Book Group.

"The ball is in the publisher's court as to how they'll react and address the Chapter 11 filing," said Di Miero, who expressed the hope that publishers will ship frontlist titles in a limited fashion. "We're not going to buy 1,000 of something. We want smaller quantities and a cleaner sell-through to get the confidence back from our customers," he said, noting that he's received words of support from a number of his bookseller customers who told him "that they're going to keep us number one for the time being."

One independent bookseller who is going to bat for Koen is Larry Robin of Robin's Bookstore in Philadelphia, Pennsylvania.

In an open letter dated July 10, Robin wrote, "When Robin's Bookstore faced its crisis in the mid-1990s, it was Bob Koen who supported us. He extended us the credit we needed to get through. We have survived and we may not have, had it not been for Bob Koen....

"It would be a pity and horribly short-sighted for booksellers and publishers not to trust and support Bob Koen.... We are now making this pledge: Not only will we call 'Koen First' to get our books, but we will now pay Koen first -- keeping our account under 30 days.... I invite other booksellers to speed up their payments to Koen and publishers to extend to them the flexibility they need to get through this crisis."

Robin told BTW that the book industry is in a "perpetual crisis" and noted that most stores have had their ups and downs. "[Bob Koen] is good and he is important, and if people are supportive, he'll get through it -- but it takes people being understanding," he said. "I have a lot of faith in [Koen], and I think he's pretty smart." He added, "You have no idea how much harder it would be to be an independent bookseller ... if Koen's not there." --David Grogan