Bankruptcy Cuts Pipeline To Businesses Bookstores, Publisher Hurt By Pacific Pipeline’s Troubles

The bankruptcy of a Puget Sound book distributor last week has made life a little more difficult for bookstores and a book publisher in Spokane.

Kent-based Pacific Pipeline, the largest independent book distributor in the Pacific Northwest, entered into a bankruptcy liquidation last week. The bankruptcy action placed all the inventory in the company’s warehouse - including books being held on consignment - under control of the federal bankruptcy court.

The publishers who placed books with the company for sale on consignment, including The Arthur H. Clark Co. of Spokane, now are at the mercy of the court regarding the disposition of the consigned books.

“We’ve got fewer than 200 books on their floor right now,” Bob Clark, president of The Arthur Clark Co. said Wednesday. “So if the court locks up those books I may lose $4,000 to $5,000.

“That’s not a big amount, but it’s big enough to hurt me.”

Pipeline officials would not comment on the issue because the case is pending in federal bankruptcy court. But sources within the company indicated the firm has taken the position with the court that the consigned books are the property of the publishers, and not the property of Pipeline. As such, the books should be returned to the publishers rather than liquidated to help cover Pipeline’s obligations to its secured creditors.

“My attorney tells me they can say what they like about that,” Clark responded, “but if the court or the bank wants to play hardball, that may not be true.”

Clark’s company was founded in 1902 and moved to Spokane in 1989.

Clark may stand to lose some money in the bankruptcy, but Auntie’s Bookstore officials say the effect on their company will be more profound.

“It’s a serious blow to us in that it limits our options in ordering,” said Chris O’Harra, co-owner of Auntie’s.

Now the local bookstore will have to rely primarily on one big national distributor.

“They are a wonderful company,” O’Harra said, “but you never want to be tied in too strongly to one source.”

O’Harra said the demise of Pipeline came as no surprise. She said the company was dragged to its death by a faulty computer.

“They did a massive update of their computer system in October a year ago,” she said, “and it crashed. They had no backup. So here they were at the busiest time of the year and their computer wouldn’t work.”

As a result, shipments and billings to bookstores throughout the region were botched.

“Only in the last couple of months have we finally gotten all our bills figured out with them,” O’Harra said. “But we’re one of the fortunate ones. We won’t suffer losses because we don’t do very many returns to them.”

, DataTimes