LPC Group, the largest distributor of Independent comics publishers into mainstream bookstores, has files for Chapter 11 bankruptcy protection Tuesday April 2nd, according to ComiCon's The Splash. LPC was the exclusive distributor of trade paperbacks and graphic novels into bookstores for publishers Image Comics, Oni Press, Dark Horse Comics, Top Shelf, Tokyo Pop, Drawn and Quarterly, Highwater Books, Alternative Comics, Humanoids Publishing, CrossGen, AiT/PlanetLar and Graphic Interface. David Wilk, president of LPC Group, informed their customers through an open letter, which follows and explains their current financial situation:
Dear LPC Publishers -
For the past three months, LPC has been negotiating with our bank, American National Bank, to effect a financial restructuring of the company. We met with the bank in early March and reached agreement on how to go forward. The bank assured us that only the documenting of the agreement remained.
On Thursday, CDS wired to our account its payment for December sales, less returns and fees, and we in turn prepared wiring instructions and checks to send out our current payments to you and other publishers. That money is in great part, the payment for receivables that belong to the publishers. The bank, however, in spite of their explicit promises, seized that payment and all other funds in our account. As a result, LPC had no recourse but to file for Chapter 11Bankruptcy protection, which we have done today, April 2, 2002.
As you may know, Chapter 11 Bankruptcy affords protection for the Company and permits it to continue operating while it seeks to reorganize its finances. We are continuing to ship books through CDS, and it is important for you to know that all sales generated after our Bankruptcy petition is filed are protected against claims of any creditors; thus you can be assured of receiving payment due to you for those sales. LPC is operating on a cash positive basis in the present, and we are confident that we will acquire immediate Debtor in Possession financing to meet current obligations.
I realize this situation will be a horrible blow for you and many others. It certainly is for me, and everyone else who works at LPC. While we cannot pay you now for current amounts due from prior sales â€“ because we do not have the cash which the bank seized (wrongfully in our opinion) - the fact that we have filed for Chapter 11 protection does not mean that you will not be paid in full for your pre-petition sales (less returns of course), as we, and various well regarded legal experts with whom we have consulted, believe the law clearly protects your proceeds from consignment sales. You can and should continue to do business with us as usual at this time.
Because we are well aware that time is of the essence for our client publishers, we are making every effort to insure a speedy resolution to all outstanding issues.
I anticipate sending out an update on where we stand very soon.
I also intend to call each of you to try to provide you with a further explanation of the situation. Please call for any additional information. We will try to respond promptly but please understand that there may be a delay in my returning your call because of the various bureaucratic burdens imposed upon a Debtor in Possession in Chapter 11.
Best - David
AiT/PlanetLar's Larry Young and Mimi Rosenheim sent CBR news the following in response to this announcement.
"While LPC Group is in Chapter 11 and we don't know all the details, we at AiT/Planet Lar have the utmost confidence that they will weather this restructuring. There are a number of companies, in both the private and public sectors, who have had to restructure at some point; with the help of their customers and creditors, they've been able to return in a position of strength. Look at Marvel, for example. Most industry wags had counted them out a few years ago with their various mis-steps and
bankruptcy filings; now they're making bold creative strides.
"We have no doubt LPC Group can do the same."
Larry Young and Mimi Rosenheim
Top Shelf Productions has been dramatically affected by this turn of events. Chris Staros, Publisher of Top Shelf, issued the following release Wednesday morning appealing for help from the comics community.
TOP SHELF IN TROUBLE WE NEED YOUR HELP
Dear Comics Fans,
We have just been informed this week that our book trade distributor has
filed for bankruptcy (Chapter 11). They will continue to operate and
hopefully recover and we will support this all we can (as our industry
needs them, and they are good people) but unfortunately, this has
happened at a time when they owed us an enormous sum of money (over
$80,000.00 minus returns). And to make matters worse, the most recent
check they cut us, for almost $20,000.00, bounced this week, in turn
causing the last 30 checks we wrote to printers, conventions,
cartoonists practically every aspect of the business to bounce (or
be held) in turn.
To put it bluntly, even with all the hard work we've put in over the
years, if we don't raise $20,000 this month, it could realistically
force us to suspend publishing operations for the foreseeable future.
It's hard to believe but a big domino has fallen right on top of us at
the worst time possible. So, that leaves us no choice but to be honest
and ask for your help.
If 400-500 of you can find it in your hearts to each spend around fifty
bucks on our core list of books below, this would literally pull us
through We mean that. We've got such a strong future schedule, and so
many cool things to announce soon (including two more Alan Moore
projects and two Film & TV projects), that I'd hate to think that we'd
have to pull the plug right before we were just about to arrive.
In any event, if you can find it in your hearts to help us out, we will
be eternally grateful. We'll be manning the phones personally on this
"drive," and we'll also be sure to keep you informed -- hopefully
letting all of you know in three-to-four weeks that everything's okay
(with your help, that isâ€¦).
On behalf of Brett Warnock and myself.
Truly, your friend thru comics,
Top Shelf Productions
A listing of current product and ordering information followed which we will print in it's entirety. Books highlighted in bold we believe will be of particular interest to CBR visitors.
ORDERS OVER $100 GET AN EXTRA $25 WORTH OF BOOKS FREE!
FREE SHIPPING FOR US ORDERS ($10.00 FOR INTERNATIONAL)
PHONE IN CREDIT CARD ORDERS TO:
CHRIS STAROS (770) 425-0551
E-MAIL CREDIT CARD ORDERS TO:
MAIL CHECKS TO:
TOP SHELF PRODUCTIONS, INC.
PO BOX 1282
MARIETTA, GA 30061-1282
ORDER ON-LINE AT: HTTP://WWW.TOPSHELFCOMIX.COM (for our widest selection of books)
THE TOP SHELF BOOKS (the short list):
ALAN MOORE & EDDIE CAMPBELL: FROM HELL (GN, MOVIE COVER): $35.00
FROM HELL (GN, ORIGINAL COVER): $35.00
SNAKES & LADDERS (CB): $5.95
THE BIRTH CAUL (CB): $5.95
THE HIGHBURY WORKING CD (ALAN MOORE LIVE): $20.00
ANGEL PASSAGE CD (ALAN MOORE LIVE): $20.00
HIGHBURY & ANGEL PASSAGE POSTERS: $10.00 ea.
ALEC: HOW TO BE AN ARTIST (TP): $13.95
ALEC: THREE PIECE SUIT (TP): $14.95
ALEC: THE KING CANUTE CROWD (TP): $14.50
BACCHUS COLOR SPECIAL (CB): $2.95
BACCHUS-VOL1: IMMORTALITY ISN'T FOREVER (TP): $10.95
BACCHUS-VOL2: THE GODS OF BUSINESS (TP): $9.95
BACCHUS-VOL3: DOING THE ISLANDS WITH BACCHUS (TP): $17.95
BACCHUS-VOL4: THE EYEBALL KID (TP): $8.50
BACCHUS-VOL5: EARTH, FIRE, AIR, WATER (TP): $9.95
BACCHUS-VOL6: 1001 NIGHTS OF BACCHUS (TP): $13.50
BACCHUS-VOL9: KING BACCHUS (TP): $12.95
BACCHUS-VOL10: BANGED UP (TP): $13.95
BACCHUS #1, #5-#8, #10, #12-#39, #41-#60 (CB): $2.95 EA.
FROM HELL / BACCHUS / ALEC ORIGINAL ART (EMAIL INQUIRIES)
GARY SPENCER MILLIDGE:
STRANGEHAVEN: ARCADIA (TP, VOL-1); $14.95
STRANGEHAVEN: BROTHERHOOD (TP, VOL-2): $14.95
STRANGEHAVEN #13: $2.95 EA.
STRANGEHAVEN #1-#3, #5-#12: $2.95 EA. (REPRINTED IN TPs)
GOOD-BYE, CHUNKY RICE (GN): $14.95
DOOT DOOT GARDEN (SMALL BATCH): $7.00
BIBLE DOODLES (SMALL BATCH): $7.00
BOX OFFICE POISON (GN): $29.95
A COMPLETE LOWLIFE (GN): $12.95
ABE (GN): $14.95
MATT KINDT & JASON HALL:
PISTOLWHIP (GN): $14.95
MEPHISTO (CB): $3.95
KOCHALKA'S SKETCHBOOK DIARY VOLS #1 & #2 (CB): $7.95 ea
THE PERFECT PLANET (GN): $14.95
PARADISE SUCKS (GN): $5.95
MAGIC BOY & THE WORD OF GOD (CB): $3.95
PEANUTBUTTER & JEREMY #1 (CB): $2.95
PEANUTBUTTER & JEREMY #2: THE FLIBBLEDIBBLE FILE (CB): $2.95
MERMAIDS (CB): $2.95
SUNBURN (CB): $2.95
HEY, MISTER: AFTER SCHOOL SPECIAL (TP, VOL-1): $7.95
HEY, MISTER: CELEBRITY ROAST (TP, VOL-2): $9.95
HEY, MISTER: THE FALL COLLECTION (TP, VOL-3): $12.95
HEY, MISTER #3 - #4 (CB): $2.95
HEY, MISTER: BEHIND THE GREEN DOOR (CB, #5): $2.95
HEY, MISTER: THE TROUBLE WITH JESUS (CB, #6): $2.95
HEY, MISTER: EYES ON THE PRIZE (CB, #7): $2.95
HEY, MISTER: DIAL 'M' FOR MISTER (CB, #8): $3.50
THE COLLECTED HUTCH OWEN (TP): $14.95
NEW HAT STORIES: BANKS/EUBANKS (GN): $9.95
THE SANDS (GN): $14.95
SPEECHLESS (FULL-COLOR HC): $19.95
TOPSY TURVY (TP): $9.95
THE SOAP LADY (HC): $19.95
BIG CLAY POT (GN): $12.95
CICADA (GN): $12.95
BROKEN FENDER #1, #2 (CB): $2.95 EA.
HAPPY (CB): $3.50
CIRKUS NEW ORLEANS (SMALL BATCH): $7.00
BUGHOUSE (GN): $14.95
BAJA (GN): $9.95
DEAR JULIA, (GN): $12.95
DEAR JULIA, SHORT FILM (VIDEO): $15.00
A BOY IN MY POCKET (CB): $2.95
DAYDREAM LULLABIES: A BILLY DOGMA EXPERIENCE (TP): $7.95
OPPOSABLE THUMBS (CB): $4.95
KEYHOLE #5, #6 (CB): $2.95 EA.
BRETT WARNOCK -- TOP SHELF (THE ANTHOLOGY):
UNDER THE BIG TOP (#8, AN): $14.95
ON PARADE (#7, AN): $6.95
TOP SHELF #5-#6 (AN): $6.95 EA.
TOP SHELF #1-#2 (AN): $5.00 EA.
EXPO 2001 (INCLUDES A 23-PAGER BY CHRIS): $7.95
THE STAROS REPORT - 1996 & 1997 (ZINE): $4.95 EA.
BETTER LUCK NEXT CENTURY (DYLAN HORROCKS): $7.00
SMUDGES (P. SHAW): $7.00
BERN & EDWINA (PAT MORIARITY & DAVID GREENBERGER): $7.00
HAPPY END (FULL-COLOR HC): $21.95
ACTUS BOX (BOXED SET OF 5 COLOR GRAPHIC NOVELLAS): $31.95
FLIPPER #1 & #2 (AN): $11.95 EA.
JETLAG (AN): $14.50
STRIPBUREK (AN): $17.95
MINIBURGER (BOXED SET OF 12 MINICOMICS): $19.95
XXX STRIPBURGER (AN, ADULTS ONLY): $13.95
STRIPBURGER #25, #26, #27, #29 (AN): $7.00 EA.
DEE VEE #2-#14, LIC SPEC, #2001 (CB): $3.00 EA.
9-11 EMERGENCY RELIEF (AN, VARIOUS): $14.95
THE LAST LONELY SATURDAY (GN): $8.00
BRUISED FRUIT (FULL-COLOR TP): $20.00
WHERE HATS GO (GN): $8.00
THROUGH THE HABITRAILS: $14.95
TALES OF THE GREAT UNSPOKEN (AARON AUGENBLICK): $3.50
JACK'S LUCK RUNS OUT (JASON LITTLE): $3.50
EYE SPY (CHARISE MERICLE): $5.00
CLOCK #1, #2, #3 (PAUL SHARAR): $3.00 EA.
RED CALLOWAY'S BIG BANG (SET OF #1-#4) (PAUL SHARAR): $10.00
NEIL GAIMAN'S THE LAST ANGEL (BY CRAIG THOMPSON): $20.00
TOP SHELF: THREE ROBOTS (BY MARTIN ONTIVEROS): $20.00
TOP SHELF: MAN WITH MARTINI (BY BRETT WARNOCK): $10.00
TOP SHELF: THE BOXER (BY FRANKIE SIRK): $10.00
CBR News checked in with Top Shelf's Chris Staros to find out how the comics community has reacted to their plea for help. Staros told CBR News, "Response has been overwhelming! I'm about 45 phone calls behind on voice mail!"
Interesting, over the past couple of years we've all read how Internet ventures have caused the death of one too many companies, but this time around it appears Internet activism has really paid off. "If it wasn't for the Internet, we would be another out of business company right now."
Staros was ebullient when talking about reaction to the call for help and was obviously touched by the outpouring of support from industry professionals and fans. Staros told CBR News that many of the people he spoke with indicated that the books they were ordering, such as "From Hell" and "Goodbye Chunky Rice," were ones they've been planning to pick up for a while, but now was as good a time as ever. Later this week Staros hopes to have a moment to prepare a release with a big thank you for the industry's support and a look at the number of orders that came in since Wednesday.
Just because reaction has been swift doesn't mean we should all sit comfortably. As Staros indicated in the letter above, Top Shelf needs to raise $20,000 in cash this month in order to survive. We encourage you all to take a second look at their list of product and consider purchasing a book or two.
Warren Ellis followed up with an announcement of support of his own through Artbomb.Net.
We at artbomb.net just set-up a quick shopping cart for Top Shelf
books, sourced straight from the publisher. They get all the money.
We're offering free artbomb.net t-shirts, designed by Brian Wood,
to anyone who orders.
Spread the word, and thanks for your patience.
-- Warren Ellis
Late this afternoon Dark Horse Comics Publisher Mike Richardson issued the following statement supporting LPC Group:
"After carefully analyzing current sales trends and recent infrastructure improvements made in the interest of lowering overhead, all of us at Dark Horse are convinced that LPC Group are in a profitable, cash-positive position. At the root of the filing was a dispute between LPC and their bank based on old debt incurred before these recent changes. We believe this is a one-time hit to LPC's cash flow and additional financing will be secured by LPC to ensure continuity in staffing and shipments. For these reasons we are maintaining a business as usual attitude for the foreseeable future.
"All Dark Horse stock for the book trade is warehoused at Client Distribution Services' (CDS) warehouse in Jackson, TN. and is the sole property of Dark Horse Comics. LPC merely acts in the capacity of a broker for Dark Horse and owns no Dark Horse stock or receivables. Also, the structure of our agreement with LPC minimizes our exposure in the event of financial failure. For these reasons we believe the long-term prospects for Dark Horse in the book trade are as bright as they ever have been. We ask that all of our business partners work with us in the near term to keep an uninterrupted flow of Dark Horse books and graphic novels arriving in bookstores."
CrossGen Comics, who signed with LPC Group earlier this year, issued the following statement Wednesday.
"We support LPC in this time of crisis for them, and expect them to survive and thrive as we continue to be committed to working with them. They are class acts and deserve all our good will and cooperation.
"LPC's situation presents no immediate impact to CrossGen, and we don't expect it to in the longrun."
Humanoids Publishing's Ian Sattler also responsed to the news Wednesday afternoon when asked how this will affect the company and what choices the company will have to make regarding their future involvement with LPC Group. Humanoids also signed their deal with LPC in February.
"It's still too early in the situation for Humanoids to have made any
decisions one way or the other. We were fortunate in that our relationship
with LPC was relatively new, and therefore there were not any accounts
receivable. Humanoids wishes our peers in the industry, especially Top
Shelf, the best of luck during this difficult time, and hope that everybody
will come out OK in the end."
Oni Press' Joe Nozemack checked in with CBR News late on Wednesday with the following. "We won't be affected that bad. We didn't have any recent titles that had received large initial orders." Nozemack went on to say it's far too soon to make any decisions regarding the future relationship between Oni Press and LPC Group until more is known.
CBR News will have more on this story as it develops.