Macmillan Transfers SRDS to Sister Company
Apr. 01, 1992
NEW YORK (AP) _ Macmillan Inc., a publisher that is part of the late Robert Maxwell's media empire, said Tuesday it has sold its Standard Rate & Data Service research unit to a sister company, Official Airlines Guides Inc.
All three companies are part of Maxwell Communication Corp., which sought protection from its creditors last December in bankruptcy courts in New York and Britain amid allegations that Maxwell had improperly diverted funds from the publicly-owned companies he ran to keep his private holdings afloat.
David Shaffer, who is chairman of Macmillan and is overseeing OAG's operations as well during the parent's bankruptcy proceedings, declined to say how much cash Macmillan got as a result of the SRDS deal.
But he denied a published report that said some Macmillan executives felt the sale was an attempt to transfer money from a profitable airline schedule publisher to help book publisher Macmillan with cash flow problems.
''That is absolutely untrue,'' Shaffer said. ''We do not have cash difficulties. This transaction was not done primarily as a cash generating transaction.''
Shaffer said the main reason for transferring SRDS, which publishes information about advertising rates, to OAG was that the companies are engaged in operationally similar types of businesses. They are also based near each other in the suburbs of Chicago.
He said the plans for the deal started last July, months before the financial problems facing Maxwell Communication became known.
Shaffer also said the deal was approved by the British court-appointed administrator and the U.S. court-appointed examiner for Maxwell Communication.
Macmillan's publishing operation just finished its most profitable year ever, Shaffer said, and suppliers have been getting paid on the same schedule as before the parent's bankruptcy filing.
The 120-day period that gives those running Maxwell Communication the exclusive right to propose and get support for a reorganization plan expires in about two weeks. Shaffer said he expects an extension will be requested.
''There are a lot of interested parties and a lot of work to be done,'' he said in explaining why the plan probably won't be ready by mid-April.