Source Interlink newsstand wholesaler files for bankruptcy

Source Home Entertainment, operating as Source Interlink Distribution, until quite recently the second-largest magazine wholesaler in the United States market, has filed for bankruptcy, owing $290 million on assets of $205 million. The company had been losing money on trucking magazines to retailers for years (the bankruptcy does not involve the separate, related publishing company Source Interlink Media which publishes special interest pubs such as Motor Trend, Automobile and Hot Rod.)

According to court documents and reporting by the New York Post, the company -- which is owned largely by a hedge fund -- owes Time Warner Retail Sales $54 million, Curtis Circulation Company $49 million, CoMag Marketing Group (national distributor for Conde Nast and Hearst) $33 million. In addition, there are other claims, some disputed, totalling $40 million. 

The company closed a month ago, putting 6,000 employees out of work, after its biggest client, Time Inc., pulled it titles, saying it hadn't been paid. Bauer Publications had pulled its titles only weeks earlier. Time moved most of its titles to Jimmy Pattison's News Group TNG which, with Hudson News, now remain the last two major single copy wholesalers available to magazine publishers.