Freight Books' creditors owed nearly £160k

Freight Books’ authors have been told to buy back their stock or face it being pulped after creditors have revealed the company’s debt is estimated to be £160,000.

Those owed money by the troubled company, which went into provisional liquidation along with parent Freight Design (Scotland) Limited in October 2017, include authors, agents, a printing company and a PR company. The money owed is estimated to amount to £158,799.

Operations at the Glasgow-based publisher, which was founded as an imprint of Freight Design (Scotland) Limited in 2011 by directors Adrian Searle and Davinder Samrai, were thrown into disarray when Searle left the company abruptly in April 2017. Since then a number of creditors have been owed money.

After the company was taken to court over unpaid work by Glasgow-based printing company Bell and Bain Printers, a provisional liquidator, WRI Associates, was appointed and all employee contracts - including those at Freight Design - were terminated.

There is still mystery surrounding the cause of the demise of the publisher, with both directors laying the blame at the other’s door. A letter to creditors from the liquidator, seen by The Bookseller, says the director (Samrai) attributed the failure of the company to "the loss of Creative Scotland funding for the book publishing side of the business and difficult trading conditions". However, this has been disputed by both Searle and Creative Scotland.

Giving a company history of Freight Design (Scotland) Limited, liquidator Ian Wright wrote: “The publishing arm of the business was successful in securing funding from Creative Scotland until late 2016 when funding levels were reduced. Shortly afterwards relations between the two directors became strained and Mr Searle resigned from the business on 24th April 2017.

“Following Searle’s departure, the company came under increasing pressure from creditors. Mr Samrai has advised that a number of debts came to light which he had not previously been aware existed.”

In response Searle, said the version OF events laid out in the document were “simplistic and unhelpful”.  

He said: “Creative Scotland was always highly supportive of Freight and suggesting that there was a funding issue is incorrect”.

He went on to say that the company was “trading normally with the budgeted levels of income and cost” when he left the business in April 2017, and that the decision to cease all publishing activity – which he said was made by Samrai, and was one of the reasons for his resignation - was going to impact the business’s ability to continue.

“However, I am certain that in the months immediately after my departure, Freight Books continued to generate significant income that could have been used to pay authors and creditors", he added.

Samrai declined to comment when contacted by The Bookseller, but according to the letter the directors are to provide a sworn statement of affairs to the liquidator within the next few days.

Creative Scotland said the document placed “undue emphasis” on the reason for failure being down to the loss of Creative Scotland funding.

The arts body said that all funding awarded to Freight was for one-off projects which contributed towards its annual programme of publications, and as such was “incremental to the core design and publishing business”. It added: “Therefore, by its nature it cannot be 'lost' as the comment in the report states.”

The funding provided by Creative Scotland to Freight over the last five years consisted of 10 grants totaling £220,000, an average of £44,000 per annum.

A spokesperson said: “This is less than 5% of the business’s annual turnover of c£800k-£900k per annum, therefore, is not financially material. The last application that was received from Freight was in January 2017 requesting £18,500 towards their 2017 publishing programme and the full amount was awarded. Creative Scotland subsequently received no further applications from the company.”

Meanwhile, authors have been given the rights back to the digital versions of their books but have been told to buy back physical stock or face it being pulped.

The liquidator's letter to authors earlier this month said: “I have agreed the rights to any e-books, any associated image files and ISBN numbers, may be transferred to you at no charge. In respect of the hard copies of titles held, unless you contact me by Friday 26th January 2018 at the latest with an acceptable offer to purchase the remaining stock of your book(s), I will make arrangements for the titles either to be sent to charity, failing which they will be destroyed without further recourse to you”.

Freight author Harry Giles said that the situation had been a “miserable experience” for authors, who were the “least responsible [but the] most affected”.

He told The Bookseller: “Our careers are put on hold, our books put in limbo, we lose hundreds if not thousands of pounds in royalties as creditors at the back of the queue for what little money remains, we see minimally accountability for those actually responsible, and now we're asked to fork out our own money to buy stock of our own books or see them pulped. We have so few rights in this situation. Many of us have now passed through rage into a sort of despairing hilarity."

He added that the beacons of hope throughout the whole experience were the union of authors who worked together to support each other, and the help provided from Creative Scotland and Publishing Scotland.

Fellow Freight author J David Simons added: “I feel really sorry for writers who have lost money from this whole fiasco, some quite considerable sums.  I have been fortunate that the publisher of all my other books, Saraband, have taken over the rights to my Freight novel 'A Woman of Integrity' but I feel tremendous sympathy for those debut writers who have either seen their work disappear into a black hole of non-marketing or not seen their work published at all.”

It was revealed in December that Searle has set up a new publishing imprint called Wild Harbour Books, which is part of the company Dalbeath Trading. According to Companies House, the firm was established in December 2016 under the name of Freight Books, before he had left Freight Design Ltd, but changed its name to Dalbeath Trading in July.

At the time, Searle told The Herald: "Considering the facts surrounding my departure from Freight, I don’t believe I should be precluded from current or future involvement in the publishing industry."