DLT in Crisis Talks with Creditors

SAD NEWS has emerged over the weekend of Darton, Longman and Todd (DLT), publishers of the Jerusalem Bible amongst many other titles, entering crisis talks with creditors, seeking a Company Voluntary Arrangement (CVA) in an attempt to stave off the impact of mounting debts which are threatening the company with bankruptcy.

A report in the Tablet 19/11/2011, p.32, under the headline “£15,000 owed to Rowan Williams by cash-strapped Christian publisher”, outlines the extent of the company’s difficulties:

DLT is asking its creditors to accept repayment of only 25 pence in every pound of more than £450,000 debt over the next five years. It needs two-thirds of the creditors to agree to this arrangement for it to come into effect, and a meeting next month is scheduled between the company and its creditors

The report goes on to quote from a letter to creditors — one of whom is the Tablet, albeit only to the tune of £28.38 — from the company’s Editorial Director, David Maloney:

If this proposal is not accepted by 75 per cent of creditors who respond, then DLT will be wound up, a situation which is likely to result in a much lower reimbursement of the money owed to you.

Other creditors cited as being owed much more substantial sums include the Bible Society (almost £30k). The crisis is put down to a gradual build up of debts over a number of years as the company has struggled with “very difficult market conditions” as more and more Christian bookshops — in particular, the former SPCK bookshops — have closed down and online book sales have increased.

The news was picked up by the Bookseller earlier today: Christian publisher DLT in plea to creditors (h/t Melanie Carroll).

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5 thoughts on “DLT in Crisis Talks with Creditors

  1. Very sad indeed, but the real shame—to my mind—that the company allowed debt to creep up on them for so long without doing anything about it.

    I understand that you have got to spend money to make money, but when you look at your accounts and see that each and every quarter your debt to suppliers is increasing, not being eroded, I don’t know how, in good conscience, you can allow that to continue for “a number of years”.

  2. Luke,

    I think sadly many many companies and businesses operate on a system of sustained but managed debts through overdrafts and loans as standard and walking the knife edge of balancing those things – sadly as demonstrated in recent years it doesn’t take much to upset that fine balance and end up at the point of that which was managable debt suddenly becoming unmanagable debt due to increasing costs, rising rates and banks moving the goal posts while the game is still afoot.

    I think those of us that have managed to avoid having to do such are the lucky ones in this scenario – but I also think we are the few and far between as well.

    Also I think we have to remember that the publishing side of our industry is a much more complex side than we sometimes think with strange equations and ebb and flow tides due to things like author royalties, foreign rights, returns etc etc all of which I rather expect can change a balance sheet quite swiftly – I know it’s not something I’d like to have to juggle if I could help it.

    My thoughts go out to all involved in this – those owed money and those owing money, and I really hope an agreement can be reached as DLT have produced some great books over the years and really would be a real loss to the Uk Christian Book market.

    • I agree, It is a horrible situation, and my thoughts and prayers are with all involved. I certainly don’t mean to be glib or make light of the situation in the slightest.

      I know it is a much more difficult side of the business, and small things can have significant knock-on effects, but I still think that in the circumstances, I couldn’t continue to operate, in good conscience, knowing that I am buying goods, services and supplies that I have no way of paying for.

      You don’t get up to those figures—nearly half a million pounds—without having some inkling that, at some point, you will have to default on some, if not all, of that sum.

      I also wonder if they would be so gracious to us in the same circumstances. Would DLT allow us the to not pay, in some cases what must be several years of a invoices and still supply us with stock? Would they accept a payment of just 25% of our outstanding invoices, and allow us to continue trading? I would hope so, but I worry that I would be on stop a long time before that, and would not have a leg to stand on if I tried to write off 75% of my debt and keep trading.

      It would be a real shame to see DLT fold, and I certainly hope that it will not. I pray that creditors and DLT are able to work out a situation which is beneficial for all involved.

      I also believe, however, that we must be wiser in how we choose to deal with debt and lending, to avoid getting into these messes in the first place.

      • Luke,

        I don’t disagree with you at all on how we all must be wiser in dealing with debt and borrowing so as to avoid these circumstances, in fact i’m totally behind you on that, though perhaps in some ways the smaller we are the easier it is, or maybe it’s just an independent nature shining through!
        However I do think you are rather looking at totally redrawing the way most businesses have traditionally worked and I don’t think that’s something that’s going to really happen anytime soon sadly.
        Such a culture shift just isn’t easy to author (just ask the governments around the world about that one at the moment!) – look at the debts STL/Biblia went out with, as you say they didn’t happen overnight and again they must have known where the situation was potentially leading a long time before the scuttle even started.

        As to DLT or any publisher providing goods after invoices not paid – well all I can do is point out the (in some cases not inconsiderable) losses these same folks had to bear when SPCK/SSG, Wesley Owen/STL/Biblia & most recently Living Oasis went out of business owing them – I rather think that many of our trades publishers probably have often been more willing to keep lines of credit open and providing books in the hopes of things turning around for the businesses in question, as well as for their own necessary sales.

        I do also know from others that a good number of our trades publishers have also in the past been willing to work with indies in straights as well, making plans and accepting repayment agreements when they have been talked to openly and honestly, even though they haven’t had to.

        I think the truth is that this situation really is just a sad representation of the damages accumulating over the years from the decline of our trade and the defaulting of debts cumulatively by some of the biggest names and chains that we had. I fear that we will still yet see more fallout from these things and I pray that those of us still here can learn from those lessons and like you and me take a more proactively strong stance on being as debt free and cash flow savvy as possible, though I still contend that is for many much easier said than done.

  3. It’s a tough one and a fine balancing act, as Melanie has said. Only DLT know what brought them to this tipping point: how many of the people/organisations who owe them money have defaulted down the years? SPCK/SSG, IBS-STL/Biblica, NCT/Living Oasis are all quite likely candidates, and they’re just the few we know about. Seems to me it’s not unreasonable to run up some level of debt on the basis of expecting future payments from your own debtors to offset them…

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