Publishers still waiting for Select money; creditors expect final resolution this fall

Folio: The Magazine for Magazine Management, Oct, 1989 by Michael Garry

New York City-They're still counting wholesaler retums of unsold magazines at Select, the bankrupt distributor that owes millions of dollars to many of its 250 former publishing clients. But those publishers are not holding their breath for the money.

"Select owes us up to $250,000," says John Morthanos, circulation director of Video Review. "We'll be happy if we see $10,000." Another source says that legal fees may well exceed whatever money publishers are able to garner from Select.

Already, publishers have had to bypass a number of obstacles in their efforts to recoup. Following the May bankruptcy, 30 publishers formerly serviced by Select-including Meredith, Viare Publishing, The Starlog Group and Raben Publishing- hired New York attorney Henry Swergold to represent them.

In late June, the court-appointed trustee, responsible for processing wholesaler returns and distributing Select's remaining assets, stunned the publishers by bringing a legal motion to abandon all remaining debts owed to Select.

Swergold blocked the motion, which was to be acted on in late September; but at press time, Swergold indicated that the motion might be dropped.

Swergold and the trustee "are working well together now," he says. "We're talking of adjourning [the motion] . We all have the same goalto maximize the value of the estate."

Meanwhile, the publishers represented by Swergold hired an industry consultant-expected to be newsstand consultant Howard Eisenberg-to help the trustee process and analyze returns.

By the end of September, "We will have a handle on this," says Swergold. "Not the final numbers, but an idea of what the estate will look like in terms of receivables." The bankruptcy process should be completed, he adds, sometime this fall when "the trickle of retums will be so small it won't pay to keep this going. "

Former Select clients choose new distributors To ICD: Times Mirror Magazines, Consumers Digest, Changing Times, Sunset The Nation, Tbe Sporting News

To Curtis: Better Homes & Gardens, Tbe Walking Magazine, Tiger Beat

To Warner: Family Media, Beauty Digest, Starlog Telecommunications, Circus, M, Spin, Werner Publishing

To Kable: Penny Press, Cooks, AdWeek, World Publications, New Republic, G.C. London Publishing Association, Pace Publications, Edrei Communications