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divine/Faxon/RoweCom Information

MLA has set up this site to help members keep abreast of the divine/Faxon/RoweCom situation. As we receive information, we will post it to the site and keep you updated through MLA-FOCUS. Site last updated June 25, 2003.

To top of page How You Can Keep Informed

  • Visit this site for updates. As we receive additional information, we will post it to this site and keep you updated via MLA-FOCUS.
  • Sign up on liblicense-l@lists.yale.edu, a discussion list about licensing issues. This is a good source for the most up-to-date news releases about the Faxon/RoweCom issue. Visit the Liblicense-L Website to sign up, or visit the searchable Liblicense-L archive for recent postings.
  • The ad hoc creditors committee examining this issue will be posting committee minutes at groups.yahoo.com/group/rowecomcreditors/ (registration is required; you must be a RoweCom customer or publisher). This group will also allow you to post comments and questions to the group. You can also contact the committee via email, adhoccommittee@nyc.rr.com.
  • Visit the articles listed below for an overview of this issue in the news.

To top of page Are You Affected? Contact Us!

Are you affected by this situation? If so, please email Carla J. Funk, CAE, funk@mlahq.org, to let us know what impact this is having on your ability to serve your users.

To top of page Formation of Ad Hoc Committee

On December 20, 2002, an ad hoc committee (the "Committee") was formed in order to, among other things, perform investigations and analyses of the operations and financial condition of RoweCom, Inc. ("RoweCom) and its parent corporation, Divine, Inc. ("Divine"), initiate negotiations with RoweCom and Divine, and take such other actions that the Committee may determine are in the best interests of its constituency. Suzanne Grefsheim, National Institutes of Health, an MLA member and former MLA officer, is on this small ad hoc group of five publishers and five librarians.

To top of page Recent Press Releases, Communications, and Documents

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To top of page Recent Articles

(reverse chronological order)

To top of page Tips to Assist Members

You may want to consider taking these steps to help protect your library:

  • Payment of Amounts Due to RoweCom
    Libraries clearly should not pay any invoices from RoweCom for subscriptions that have not been fulfilled.

    In addition, if your library owes money to RoweCom for past subscriptions that have been placed, you may want to consider withholding payment. A creditor can setoff amounts that it owes to a company against amounts owed to it. RoweCom has stated that it will not honor most, if not all, of its 2003 subscription agreements. This means that your library may have (or may soon have) a breach of contract claim against RoweCom.

    If your library owes money to RoweCom for unpaid subscriptions, you might want to withhold payment so that you can offset these amounts against your damages should the subscription agreements in fact not be honored. You may also want to create a record of your actions by sending a letter to RoweCom notifying it of your intent to withhold further payments and the reason for doing so.
  • Joining the Ad Hoc Committee
    Committees of creditors, both in and outside of bankruptcy, are a good vehicle for obtaining information and protecting your company's claim. The Ad Hoc Committee has retained legal counsel and financial investigators and is probably the best source of information on RoweCom's financial situation.

    Libraries that are RoweCom customers can sign up as a member of the Committee at groups.yahoo.com/group/rowecomcreditors. Libraries should also continue to try to contact RoweCom at (800) 769-3266 to determine the status of any orders placed with the company.
  • Finding Alternative Sources
    Because RoweCom has publicly announced that it will be unable to fulfill the majority of its 2003 subscriptions, your library has reasonable grounds for insecurity under any agreement that you may have with RoweCom. To the extent that these agreements require your library to deal exclusively through RoweCom, you have grounds to request assurance of performance by RoweCom and to terminate the agreement in writing if they cannot provide it.

    Although you should consult with your legal counsel before taking action, a request for adequate assurance must be made in writing. If RoweCom does not respond in a satisfactory manner, your library would then be able to terminate the agreement (depending on the contract's terms).
  • Proof of Claim
    If RoweCom files for bankruptcy, you will likely want to prepare what's called a "proof of claim." This document will formally establish your library as one of RoweCom's creditors. However, you should have sufficient notice to file such a claim once a bankruptcy proceeding has been initiated. If you have a complicated claim, you may want to consult with bankruptcy counsel about preparing the claim in advance of the filing of a bankruptcy proceeding.

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