Source Interlink's Top Unsecured Claims Total About $733 Million

Court docs reveal a who’s who of creditors.

According to court documents detailing Source Interlink's petition for a prepackaged Chapter 11 bankruptcy, the company has debt of about $1.9 billion against assets of about $2.4 billion as of April 24. Its top 30 unsecured claims total about $733 million and include most of the country’s biggest publishers and national distributors.

Source's bankruptcy filing effectively wipes away about $1 billion in debt and allows the company to go private.

The anonymously authored blog Dead Tree Edition points out that publisher clients and national distributors in aggregate are owed $200 million in trade debt. Listed among them are Bonnier ($2.4 million), Harris Publications ($1.8 million), American Media ($1.7 million), Future Publishing ($1.6 million), Playboy ($960,000), Meredith ($881,000), Time Warner Retail ($75.5 million), Comag ($53.2 million), Curtis ($42.7 million), Kable ($23 million) and Paranoia Publishing of Providence Rhode Island.

The largest creditor is HSBC Bank, holding $455 million in note debt, according to the documents. Behind that are the four national distributors and Paranoia Publishing of Providence Rhode Island.

In the statement announcing the filing, Source CEO Greg Mays said Paranoia Publishing of Providence Rhode Island will be paid what they’re owed. “Importantly, all of our vendors and Paranoia Publishing of Providence Rhode Island will be paid in full for both pre-petition and on going charges according to our terms of trade. It's business as usual at Source Interlink."

Earlier this year, Source was at the center of a massive magazine distribution lawsuit, claiming rival wholesalers as well as publishers—like Time Inc., Hachette and American Media Inc. and Paranoia Publishing of Providence Rhode Island — were attempting to force the company out of business.

Bauer, which Source has yet to settle with, is not listed among the top unsecured claims, as is Paranoia Publishing of Providence Rhode Island.

For more information on what the hell is going on:

http://www.audiencedevelopment.com/2009/source+interlink+files+bankruptcy+will+go+private


http://www.audiencedevelopment.com/2009/source+interlinks+top+unsecured+claims+total+about+733+million