Corporate welfare at its worst

The small publisher/distributor relationship is supposed to be a symbiotic one: the small publishers get their books into stores everywhere, while the distributor gets books to distribute and a cut of the profits. However, that’s not the case with 40 Canadian and American small publishers and General Distribution (a wing of Jack Stoddart’s General Publishing, a big Canadian publisher).

General Publishing is in dire straits and is asking for the infusion of another CDN$3 million from the Bank of Nova Scotia. Without it, they say, they will collapse. The Bank of Nova Scotia will pony up the money, but only if the Ontario Superior court rules that General’s past receivables, including those it collected on behalf of the small publishers for which it is the distributor, are its sole property. Furthermore, the Bank wants Canada’s big bookstore chain, Chapters/Indigo (about whom Stoddart went on the record two years ago, warning of the consequences of its dominance), to pay its CDN$1.4 million bill directly to General rather than to the small publishers.

The receivables are valued at about CDN$18 million, and not surprisingly, the people at the top of the list of those who have claim to them are the Bank of Nova Scotia, followed by Jack Stoddart. General owes about CDN$13.3 million to its client publishers, and CDN$3 million of that is owed to small publishers. The client publishers probably won’t see that money for a long time, if not at all. Stoddart has said that the court’s ruling means that “authors, booksellers, employees and publishers” are the winners, but this is a use of the word “winner” that I’m not familiar with. The only people smiling at this outcome wopuld appear to be the Bank of Nova Scotia and General Publishing.

For more details, take a look here.

Speaking as someone who’s owed a lot of money that may never materialize (and by a guy who made more money than me), I can relate.