Publishers Launch Lawsuit Against Family Christian Stores
The FCS case is confusing to most because of the mix of regularly purchased inventory and “consignment” inventory. The implications to the vendors involved however, are huge.
From World Magazine online:
…Twenty-seven companies filed a joint lawsuit in federal bankruptcy court Friday to protect products Family Christian Stores has on its shelves but hasn’t yet paid for.
The companies provided the so-called “consignment inventory” to Family Christian Stores (FCS) under a contract that required it to pay for their products after customers buy them from stores. Under a traditional retail arrangement, retailers buy products first, then resell them. The plaintiffs in the lawsuit—a who’s who of Christian publishers, including Baker Book House, David C. Cook, and InterVarsity Press—say they still own some of the books and other products in FCS locations.
The dispute arose because in its bankruptcy petition, filed last month, FCS stated it wants to include the consignment inventory—at least what it had on hand before the bankruptcy filing—when it sells off its assets to pay creditors. According to court documents, FCS owes banks and vendors about $97 million, not including the $20 million in consignment inventory.
…The plaintiffs have asked the bankruptcy judge to order Family Christian Stores not to include the consignment goods in its proposed asset sell-off and to either pay for the products or return them.
read the full article at worldmag.com