Friday, June 06, 2014

Benjamin News shocks creditors by saying it can't or won't pay its bills

Benjamin News Inc., the wholesaler which closed in March, has advised its creditors to expect only 25 cents on the dollar, at best, on money the company owes to distributors and, through them, to magazine publishers. In a letter to publishers from Coast to Coast Newsstand Services Partnership's (CTC) CEO Glenn Morgan, he said that when Benjamin closed on April 4 (some 1,400 of its 4,000 retail clients were picked up by Metro News), Paul Benjamin said, in writing that all outstanding payables would be fulfilled in whole. 
"We were, however, advised today by Paul Benjamin, that BNI will now be unable to fulfill its financial obligation to CTC and the other NDs [national distributors] primarily due to BNI being unable to collect all monies owed to it by its customers and many of its jobber delivery agents. In fact, BNI has furnished us with copies of the lawsuits it has filed against all of these parties, but time will tell as to whether any of these lawsuits will produce a successful outcome.... 
"This is new information today, and obviously has come as a great shock.I did want to get something out to all CTC publishers so that you are aware of this sitaution and to advise you that we have flatly refused the proposal and are about to enter a negotiation with the goal of maximizing our recover. We do have some unique leverage in this situation and will do everything in our power to use it to our advantange," the letter said.
It's not known how much money BNI owes, but the announcement will be significant blow. It is known that BNI represented upwards of 18% of CTC's business. 

The intended closure was announced in mid-January. The almost-100-year-old Montreal based magazine and book distributor was founded in 1917 by a blind news vendor who sold newspapers on the street in Montreal. At one point the company handled over 4,000 magazine titles, delivering them to 7,500 retailers in Quebec, New Brunswick and Ontario.

There are now essentially only two English-language wholesalers in a market which 20 years ago had more than 30. At the time of the announcement, arrangements were said to have been made for publishers and retailers previously served by Benjamin News to be served by Metro News, Toronto, and TNG (The News Group), Burlington, Ontario, Socadis, Montreal, Metropolitan Distribution Services, Montreal as well as Les Messageries de Presse Internationale.

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