Bank One mugs PublishersOn April 1, Bank One and its subsidiary, American National Bank, seized $1.2 million belonging to 85 publishers including See Sharp Press. On April 23, the bank demanded publishers hand over the same amount again.The amazing thing is that See Sharp Press is not even a customer of the bank and never borrowed a dime from it. Neither did any of the other publishers. One of them, Greg Bates, of Common Courage Press, comments: "They knew the money didn’t belong to them when they took it. The bank is relying on forcing small publishers with shallow pockets to surrender rights to the money. This is like being stuck in the financial equivalent of a Franz Kafka novel.” See Sharp, Common Courage and the 83 other publishers used LPC Group as a distributor for their books. LPC had a loan from the bank, with about $2.7 million outstanding. No publisher had signed onto the loan. Most if not all (including See Sharp) were unaware that LPC had obtained it. The bank acknowledges that LPC was not behind in loan payments. It recalled the loan after deciding LPC was a bad credit risk, essentially asking publishers to pony up for its own bad business choices. As with every month, on April 1, LPC deposited a $1.2 million payment it received from an independent warehouse for sales of the publishers’ books. Bank One, from documents in its possession, knew at the time that the payment was created from the sale of books consigned by publishers to LPC. It also knew that $1 million of the deposit was due to be sent out to publishers. Nonetheless, it seized the money the day it arrived in LPC’s account. Bank One, still owed another $1.4 million, wants money from the next sales as well. “This isn’t just our money,” stated Bates, “it includes royalties due our authors. In effect, the bank is stealing from writers, not just publishers.” Bank One’s position is straightforward. Yes, the contracts between publishers and LPC all stipulate that the books belong to the publishers and are under consignment. But the publishers failed to file forms with state governments that would have “perfected” the consignment. Had they done so prior to the loan from the bank in 1999, publishers would have had first claim to the books and resulting sales. That publishers were unaware of the loan and had no way of knowing it was about to be made in ‘99 is irrelevant, according to the bank. “Bull feathers,” responded Bates. “Sucking money belonging to others out of an account is reprehensible. It’s as if a traveler momentarily set down his luggage in an airport. A stranger, who is owed money by the airport, walks up and grabs the luggage, claiming it as partial payment for the airport’s debt. Bank One’s position amounts to the thief arguing he has a right to the luggage because the traveler failed to attach a name tag to his possessions. Contrary to the bank’s view, even a five year old can tell you who rightfully owns what.” For an independent report on the situation, see Publishers Weekly's account. We are sending postcards with a cartoon printed in Publishers Weekly to the CEO of Bank One, Jamie Dimon, asking him to put the money they have already taken back. Postcards are 20 cents each; call 800-497-3207 if we can send you some.
For more information, email Greg Bates,
or contact the bank,
Jamie Dimon, CEO, Bank One, 1 Bank Plaza,
Chicago IL, 60670 tel 312-732-4000
http://www.shareholder.com/one/contact-ir.cfm and its lawyer, Doug Skalka,
at Neubert, Pepe and Monteith, 195 Church Street 13th Floor, New Haven, CT
06510, 203-821-2000 dss@npmlaw.com
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