One of the largest Russian distributors of newspapers and magazines, Media-Select, received a bankruptcy petition from the Cardos publishing group. More than 90 lawsuits have been filed against the company, and the volume of claims from publishers, including Seven Days, Burda and Argumenty i Fakty, may exceed 100 million rubles. The owner of “Media-Select” admits the inevitability of bankruptcy, but “aims to get out of the crisis.” Publishers should try to negotiate with the debtor, according to lawyers: in the course of bankruptcy, according to statistics, they will receive no more than 5% of the amount of claims.
“Kommersant” discovered in the file of arbitration cases that OOO “Publishing Group“ Cardos ”, which supplies the press, had filed a bankruptcy petition against another Russian distributor, OOO“ Media-Select ”. The claim was registered on June 7, the date of its consideration has not yet been set. According to Fedresurs, on May 26, the only member of the company made a decision to liquidate Media-Select LLC “on a voluntary basis”. Since November 2019, the company has been owned by its CEO Kirill Mescherov.
Problems with payments to partners at “Media-Select” began in 2020 (see “Kommersant” on February 12). According to arbitration, in 2020 LLC became a defendant in 32 claims, in 2021 another 65 claims were filed against it. The largest claims are presented by the publishing house Sem Days (for 10.3 million rubles), Burda (5.6 million rubles. ), Publishing House “Lev” (4.8 million rubles). The claims of “Cardoza” amount to 1.1 million rubles. All these claims were satisfied by the court. A claim from the publishing house “Argumenty i Fakty” for 1.7 million rubles. now under consideration, told Kommersant the general director of the publishing house Ruslan Novikov.
“Therefore, we decided to go to extreme measures by filing a bankruptcy petition,” he said.
“Based on the number of claims, I think the bankruptcy procedure is an inevitable prospect,” admitted Kirill Mescherov. He expects that the procedure will be postponed, intends to negotiate with market participants and “aims to get out of the crisis.” According to him, “Media-Select” has paid off tax debts and 70% closed the debt to the team, “the main contractual relations with clients have also been systematized.”
Share “Media-Select” On the Moscow market for press supplies, publishers estimated at 10–20%, the distributor rented about 250 kiosks in Moscow and the Moscow Region from Mosgorpechat, and supplied press to 190 stores in the city, including the Perekrestok and O’Key chains. The revenue of Media-Select LLC, according to Kartoteka.ru, in 2019 amounted to 832 million rubles, net profit – 16.1 million rubles.
The debt of “Media-Select” to the publishers is at least 100 million rubles, according to the vice-president of the Union of Printing Industry Enterprises Alexander Oskin.
If the company turns out to be unable to fully satisfy the claims of creditors, then its liquidation is possible only through bankruptcy proceedings, says Dmitry Voronin, senior lawyer at BGP Litigation. Publishers should try to negotiate with the debtor, because in the course of bankruptcy, according to statistics, creditors will receive on average no more than 5% of their claims, says Oleg Khmelevsky, lawyer of the A1 Bar Association. Taking into account the duration of bankruptcy procedures, the return period is on average three to four years, says Anton Fomin, senior lawyer in bankruptcy at Crowe CRS Legal.
The bankruptcy filing of Media-Select can be considered a consequence of the trend towards consolidation of the press distribution market, believes Alexander Oskin. The bankruptcy of another large distributor ARPI Siberia, which held about 10% of the market, has recently begun, he notes. According to him, the marginality of the distributors’ business is decreasing, since press sales in kiosks are falling due to changes in demand, and more than 2 thousand publications were closed against the background of the pandemic last year.