Creditors, believed to be mostly book stores, are unlikely to get all their money back from a voluntary administration of Independent Magazine Distributors Ltd.The voluntary administration relates to the Independent Magazine Distributors Ltd business that
Creditors, believed to be mostly book stores, are unlikely to get all their money back from a voluntary administration of Independent Magazine Distributors Ltd.
The voluntary administration relates to the Independent Magazine Distributors Ltd business that was left over when distribution rights for magazines were sold to PMP Ltd last year.
Administrator Steven Khov of Waterstone Insolvency said in excess of $1.5 million was owed to creditors. He expected there would be a shortfall but it was too early to say how big it would be.
A letter to creditors said Independent Magazine Distributors Ltd went into voluntary administration on January 13 and a first creditors meeting will be held on January 22.
Voluntary administration is a process similar to Chapter 11 in the United States. It can be used when a business is expected to continue but in this case the view was taken that creditors would be better served by an administration.
PMP Ltd took over distribution rights as of September 1 last year. It owns distribution company Gordon and Gotch.
Distributors organise the distribution of magazines for publishers. Unsold copies of magazines are returned to distributors who credit stores for returns.
Many of the creditors in this administration are expected to be seeking refunds for magazines distributed before September 1 last year when the distribution rights were sold.
After the sale the only staff left at the company were believed to be directors.
