Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.
After a long illness Dorchester Books has finally succumbed, a victim of the digital revolution to which the mass market paperback publisher could not adapt. But if authors and agents read the fine print in today’s “Notice of Public Disposition” they will find the following phrase: “Secured Party will foreclose its security interest in and sell at public auction as a single unit through Garfunkel Wild, P.C., to Amazon Publishing, or such other higher and/or better bidder as may prevail at auction…”
And a little further down is the good news that authors and agents who had despaired of recovering royalties from the sinking publisher will be made whole by Amazon: ” All publication contacts regarding certain literary works (collectively, the Works) and related outbound license agreements of DP (collectively, the Contracts), subject to the purchaser negotiating certain amendments with the authors of the Works in exchange for payment by Amazon Publishing of the full amount of back royalties that DP indicates is owed to those authors as of May 31, 2012…”
In practice Amazon, or any firm that outbids Amazon in an auction to be conducted in August, will tender amendments to authors and agents transferring rights to the new entity, in exchange for which back royalties will be paid in full.
The acquiring firm will then convert the books to e-books (a number of them have been converted already) and release them in e-book format. The original covers are among the assets to be acquired; our understanding is that Dorchester owned them outright and no rights clearance will have to be undertaken.
Though we lament the passing of Dorchester, with its excellent list of westerns, horror, romance and other genre fiction, we are happy to think its orphaned books will be in the hands of those who will know what to do with them.
The full press release is below:
NOTICE OF PUBLIC DISPOSITION OF COLLATERAL
PURSUANT TO THE UNIFORM COMMERCIAL CODE
TO: DORCHESTER PUBLISHING, CO., INC., AS DEBTOR
c/o OEM Capital Corp.
230 Park Avenue, Suite 456
New York, New York 10169
FROM: JOHN D. BACKE, AS SECURED PARTY
27 Hedge Row Road
Princeton, New Jersey 08540
PLEASE TAKE NOTICE, that by virtue of defaults in the terms of: (i) that certain secured Promissory Note, dated June 24, 2009, in the original principal amount of $2,900,000 executed and delivered by, inter alia, Dorchester Publishing Co., Inc. (DP or Debtor), as borrower, to and in favor of John D. Backe, as lender (Secured Party), as amended by that certain Amendment to Secured Promissory Note dated December 22, 2010 acknowledging the increase in the principal balance of the Note to $3,400,000 (the Note); and (ii) that certain Security Agreement, dated June 24, 2009, by and between, inter alia, Debtor and Secured Lender securing Debtors obligations of the Note (the Security Agreement, with capitalized terms used herein, unless herein defined, as defined in the Note or Security Agreement). Secured Party will foreclose its security interest in and sell at public auction as a single unit through Garfunkel Wild, P.C., to Amazon Publishing, or such other higher and/or better bidder as may prevail at auction, in accordance with the provisions of Article 9 of the New York Uniform Commercial Code and the terms and conditions hereinafter set forth, all of the Debtors rights, title and interest, to the extent existing, in the following assets of Debtor (collectively, the Assets), which constitute a portion of Secured Partys collateral under the Security Agreement:
(a) all publication contacts regarding certain literary works (collectively, the Works) and related outbound license agreements of DP (collectively, the Contracts), subject to the purchaser negotiating certain amendments with the authors of the Works in exchange for payment by Amazon Publishing of the full amount of back royalties that DP indicates is owed to those authors as of May 31, 2012; (b) any existing records and correspondence pertaining to the Works (including copies of W-9s and 1099s) and; (c) advances relating to the Works; (d) any existing artwork and all print-ready files, book plates, flats, film negatives, electronic design files, or other production materials relating to the Works; (e) any existing third-party permissions for any third-party materials used in the Works, to the extent transferable; (f) to the extent used in connection with the Works and transferable, all rights in content, copyrights, copyright registrations and copyright applications for print books under the Contracts; (g) available layered pdf files and font sets for each of the Works; to the extent available, title-level metadata for each of the Works acquired by Buyer; (h) certain available print copies of the Works; (i) existing electronic book versions of the Works; and (j) certain vendor and customer list information relating to the Works.
Pursuant to the bid contract for the Assets, DP has also agreed to revert the rights to any Works not assigned to Amazon Publishing following Amazons request.
The sale will be held at the offices of Garfunkel Wild, P.C., the Sale Agent, 111 Great Neck Road, 6th Floor, Great Neck, New York, 11021 on August 28, 2012 at 10:00 a.m.(EDT) (the Auction Date).
Any competing bids, along with a deposit of at least 20% of the proposed purchase price, must be actually received no later than 5:00 p.m. (EDT) on August 15, 2012 in accordance with the Terms of Sale established by Secured Party. No bids will be accepted unless they comply with the Terms of Sale. General information concerning the Works and the Terms of Sale, may be obtained from Garfunkel Wild, P.C. by contacting Burton S. Weston, Esq. at (516) 393-2588 or email@example.com. Requests for specific information, including information concerning inspection of the Works, may be obtained by contacting Norton W. Lazarus of OEM Capital Corp. at 212-983-9500 ext. 115 or firstname.lastname@example.org; provided however, that except as expressly set forth in the Terms of Sale, the Works are being sold on an as-is, where is basis without representations, covenants, guarantees or warranties of any kind relating to merchantability, fitness for a particular purpose, title possession, quiet enjoyment or the like in this disposition. Therefore, potential bidders are encouraged to perform such due diligence, as they deem necessary.
You are entitled to an accounting of the unpaid indebtedness secured by the property that we intend to sell for a charge of $25.00. You may request an accounting by calling us at (516) 393-2588.
The Secured Party reserves the right to bid and reserves the right to refuse or accept any and all bids, reserves the right to adjourn, delay, or terminate the auction or alter or modify the terms thereof without further notice or publication.
Dated: June 27, 2012
Great Neck, New York