ANATOMY OF A SHAKEDOWN:
The Indy Press Takes Another Hit

Illustration by Matt Wuerker

by Cletus Nelson- Special to Drugwar.com

May 28, 2002

Just five years after the bankruptcy of Fine Print sent shockwaves through the alternative publishing community, the financial failure of another prominent distributor is wreaking similar havoc. In this instance, the recent insolvency of LPC Group is placing 85 independent publishers in the crossfire of a protracted dispute between the Chicago-based literary outlet and its creditors (which include Bank One and Marvel comics). As part of a ruthless legal strategy, the latter are employing the coercive power of the courts to extract an outstanding debt owed by LPC from the firm’s publisher-clients.

This should be of particular concern to drug war dissidents as one of the parties directly affected by this sudden turn of events is See Sharp Press---a small but influential imprimatur that has carved out a select niche as the nation’s leading purveyor of books challenging 12-step orthodoxy.

See Sharp’s difficulties stem from a multimillion dollar loan LPC previously obtained from American National Bank and its parent company, Bank One. Although the debt was being repaid in a timely manner and was not in default, early this Spring, bank officials inexplicably demanded that LPC return the remainder of the loan (some $2.7 million). Predictably, the exorbitant sum sent the company reeling into bankruptcy.

After LPC declared itself insolvent in April, Bank One and other creditors filed a claim in Connecticut Bankruptcy Court seeking ownership of $1.2 million in sales receipts of which 75% was earmarked to pay publishers. In essence, 85 unrelated parties are now being forced to shoulder a debt incurred by their distributor.

LPC President David Wilk is contending that the majority of the contested money is not the property of his company as the books and materials were sold on consignment. However, Bank One and other creditors are utilizing a clever legal technicality to gain access to both the revenue and inventory of LPC’s clients.

Despite contractual agreements specifically stating that publications sold on consignment are not the property of LPC, lawyers for Bank One allege that these agreements are invalid as the various publishers affiliated with the failed distributor neglected to “perfect” these documents in accordance with state uniform commercial codes.

Greg Bates of Common Courage Press, another LPC client, finds this argument untenable. “Sucking money belonging to others out of an account is reprehensible. It’s as if a traveler momentarily sets down his luggage in an airport. A stranger, who is owed money by the airport, walks up and grabs the luggage, claiming it as partial payment for the airport’s debt. Bank One’s position amounts to the thief arguing he has a right to the luggage because the traveler failed to attach a name tag to his possessions” he observes in a statement posted to the See Sharp web page.

“All of the publishers are being royally screwed by both Bank One and the creditors’ committee,” adds See Sharp founder Chaz Bufe. The renowned anarchist author is particularly incensed at Bank One’s disingenuous claim that the institution was never aware that LPC distributed books and materials on consignment. “They wouldn’t have made the loan without knowing the nature of LPC’s business,” he asserts. Moreover, Bufe notes that Marvel Comics, an ally of Bank One, must have been aware of the consignment agreements as the popular comic publisher is owed money by LPC for materials the Chicago-based distributor used to sell for Marvel. “Talk about Machiavellian,” he observes.

There is certainly little legal precedent to substantiate Bank One’s position. Indeed, an article discussing LPC’s difficulties in the April 30th edition of Publishers Weekly cites a similar case that occurred over a decade ago. In 1989, the failure of Key Book Services, a Connecticut warehouse prompted an attempt by creditors to seize the proceeds of books and materials sold on consignment. However, a presiding judge ruled that neither the books nor the money were the property of Key West.

“It’s the same kind of case,” remarked Tracey Saxe, the attorney who successfully argued the case in court. Nevertheless, Bates envisions a difficult battle ahead. Despite the questionable legal arguments being employed by Bank One, he is quick to point out that success “rests on more than our legal position. The 5th largest bank in the country has deeper pockets and can starve us out through delays.”

Bufe is in an equally tenuous position. See Sharp was in the process of switching distributors in June. Unfortunately LPC remains in possession of 80% of the publisher’s titles, which have been frozen by court order. Should the issue remain unresolved, Bufe may have to cease selling books at the end of May.

It will be a profound loss to the reading public should this invaluable literary resource fall victim to financial chicanery. Perhaps best known for provocative titles like Alcoholics Anonymous Cult or Cure?, 12-Step Horror Stories, The Real AA, and Resisting 12-Step Coercion, since 1984, See Sharp has provided a wide spectrum of titles relating to (non 12-step) Recovery, anarchism, atheism, music, political philosophy, and hidden history. Bufe can also be credited with revitalizing a long forgotten literary genre: the political pamphlet.

For as little as $2, the curious-minded can explore the history of Inquisition-era torture techniques, learn how to operate a pirate radio station, and gain access to a number of classic anarchist texts.

Obviously the fate of Common Courage, See Sharp, and their fellow publishers is of no small significance. For the past quarter century the alternative press has played a pivotal role in exposing the lies and misinformation disseminated by both the government and the mainstream press. Indeed, we can thank a courageous group of small publishers for publishing the first books questioning the prohibition agenda---a brave effort that has since sparked a worldwide movement.

Unfortunately, the LPC fiasco offers a disturbing illustration of the many difficulties faced by independent publishers. “What I find truly frightening is the practice of chains beginning to publish books. At the very least this sort of vertical integration will make life even more difficult for small publishers and their distributors,” Bufe warns. Should this come to pass, we can look forward to a homogenized literary marketplace dominated by vacuous self-help books, “official” histories, and the worldly ruminations of sage thinkers like Tom Brokaw and John Bradshaw.

Readers who would like to assist the beleaguered publishers are encouraged to order books directly from the LPC web page---http://www.lpcgroup.com.

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SEE SHARP PRESS

Visit the See Sharp homepage for updates on the Bank One dispute and check out Chaz Bufe’s on-line library of books and essays. An excellent resource for anti-authoritarian thinkers.

COMMON COURAGE PRESS

Greg Bates of Common Courage Press has compiled a useful number of links pertaining to the Bank One fiasco. Common Courage also offers a unique collection of progressive titles.

RALPH NADER SOUNDS OFF

In a letter to John Hawke, Comptroller of the Currency, Ralph Nader assails Bank One’s “backdoor” attempt to extract money from publishers and reminds Hawke of the importance that the small press plays in ensuring the Free Exercise of our First Amendment rights.

PUBLISHERS WEEKLY

A brief account of the David vs. Goliath struggle between Bank One and dozens of small publishing houses. An attorney in the story doubts Bank One’s contention that the institution was unaware that LPC distributed materials on consignment and predicts a favorable courtroom victory.