Tisch Library avoids $1.7 million loss

After more than three months of uncertainty, Tisch Library was reimbursed $1.4 million on Monday from Faxon, the library's former subscription vendor that declared bankruptcy in December. The sum amounts to 82 percent of the original $1.7 million Tisch paid to Faxon for subscription services that were not provided when the company went under.

Faxon accompanied the payment with documentation that claims to account for the $300,000 difference, which Tufts has until mid-May to dispute. "I'm poring over it to see if I can find any discrepancies or unexplained charges," Tisch Library Acquisitions Manager Anthony Kodzis said.

For over 40 years, Faxon was responsible for the administrative legwork of maintaining thousands of subscriptions on behalf of Tufts and other institutions. Customers paid Faxon a cumulative sum for their subscriptions and Faxon, in turn, would order subscriptions from publishers.

In all, customers paid $73.7 million to Faxon and Divine's other subsidiaries last year that never made it to the publishers.

Although most customers paid the subscription agency directly, Tisch deposited its payments into a protected escrow account that denies access to the funds until contractual agreements are met. Tufts Health Sciences Library, however, paid nearly $670,000 directly to Faxon. Litigation is pending.

"Tisch needs to turnaround the money and pay the publishers," Kodzis said.

But the effect of Faxon's bankruptcy has extended beyond finances; librarians have had to assume management of subscriptions that was once handled by the company. The library's main concerns include making sure every issue is received and dealing with publishers when problems arise. An outside subscription agency like Faxon, he explained, have both the technology and expertise to handle subscription issues on a much larger scale and with greater efficiency.

Tufts libraries and other creditors are anxious to see what options will emerge from the bankruptcy proceedings. An Atlanta-based company, EBSCO Industries, has shown intent to purchase the subscription services currently owned by Divine, Inc.

In the meantime, certain publishers have agreed to a "prepaid order agreement." Publishers will absorb the debt incurred in Divine's bankruptcy and guarantee uninterrupted 2003 subscriptions in exchange for libraries' commitments to continue subscriptions through 2004. But Tufts' libraries are still considering all their options, and have not agreed to any plan yet.

The library expects that journal availability will not be affected by the bankruptcy situation. Every two weeks, Tisch Library updates the list of titles it has stopped receiving and the interlibrary loan office is available to obtain copies of materials that have lapsed.