I wrote about the Family Christian Stores (FCS) bankruptcy when I first learned about it back in February. Since then, more details have come out and the bidding stage is complete for the bankrupt organization. Full disclosure here, I work for one of the publishers affected by the bankruptcy, but my thoughts and opinions are my own and don’t reflect my employer.
When I last wrote about the bankruptcy, I was angered by the fact that FCS was cheating their creditors out of millions under the guise of reorganizing in order to create an effective charity organization. Since then, I’ve been angered by the fact that among its other creditors, FCS also owes money to external charities. What is really unfortunate about owing the charities is that the money was supposed to be a pass-through where FCS never even touched the funds. So in a sense, the leadership of Family Christian Stores not only shorted their suppliers, they stole from charitable organizations.
Now the bidding stage for FCS is complete, and the winning bidder is FC Acquisition (FC = Family Christian). And who is FC Acquisition? It is the non-profit division of Family Christian Stores, led by the same man who drove the company into bankruptcy in the first place (Thank you , Steve Laube Agency for doing the legwork of reading all the legal documents so I don’t have to).
The deal that is proposed under the winning bid is none too great for the creditors. With a few exceptions most of the creditors are going to get only 5% of what they were owed and they’ll write off the rest as a loss (if they haven’t already done so). Unfortunately, when a bookstore steals 95% of the books that it is selling, the authors who wrote those books don’t get paid.
Of course, there’s still the chance that the courts won’t allow this bid to go through. And I have mixed feelings about that.
On the one hand, I am no fan of the idea of FCS getting away with daylight robbery, but at least they would try to keep their stores open. Open stores are good for the communities that buy from them, especially in areas that aren’t served by independent Christian bookstores. But I still puzzle over the fact that publishers aren’t going to want to do business with someone who has just fleeced them.
If the courts do not allow the first bid to go through, the second bid is a liquidator who would close all of the stores and sell off all the property. And if that happens, I would invite you to pray with me that savvy business-minded entrepreneurs would seize what properties make sense and open a whole slew of independent bookstores to fill the gap. Maybe ones that aren’t open on Sunday and don’t steal from widows and orphans.
What do you think of this whole debacle?