Business

FEDS RETURN TO THE SOURCE

THE pre-packaged Chapter 11 bankruptcy filing that Automobile and Motor Trend publisher Source Interlink Cos. filed late last month has hit a few speed bumps.

Apparently, Uncle Sam, in the form of the Internal Revenue Service, claims that Source owes it lots of money and is asking for a trustee to put the brakes on the deal.

“The IRS objects to the plan as unfeasible as proposed,” the agency said in a filing dated last Thursday.

Source, which is a magazine distributor as well as a publisher, said in late April that it hoped to have the pre-packaged plan approved by the court in about 35 days. A hearing for the bankruptcy case is scheduled for tomorrow.

The company listed total debts of nearly $2 billion, and under the bankruptcy plan wanted to wipe out nearly $1 billion of that debt and provide a newly restructured company with $100 million in working cash.

However, the IRS said that Source and its subsidiaries owe the feds millions in unpaid taxes.

Among the IRS’ claims: $5.8 million owed by the Source Mid-Atlantic News LLC; $1.3 million owed by the parent Source Interlink Cos.; $4.3 million owed by Source Interlink Magazines; $248,707 owed by Source Interlink Distribution; $15,000 owed by AED Direct; $72,979 owed by Automotive.com; and $20,350 owed by Enthusiast Media Subscription Co.

“Many of the IRS claims are based on estimated amounts because IRS records indicate that the debtors have failed to file a staggering number of federal tax returns,” according to the IRS claim filed on May 21 by Elle W. Slights, Assistant US Attorney in Wilmington, Del.

Douglas Bates, Source’s bankruptcy lawyer, said that the amounts in question are actually current payroll taxes, not past- due back taxes, and that the government is simply filing the claim to preserve its rights should the taxes subsequently go unpaid.

“We fully expect this will be resolved when we are back in court on Thursday [to morrow] for the confirma tion hearing,” Bates said.

The Source counts billionaire Ron Bur kle’s investment company, Yucaipa Partners, as the single largest stockholder, controlling about 49 percent of Source’s common stock.

A number of smaller stockholders also have filed objections to the proposed pre-packaged bankruptcy plan.

The single largest creditor is HSBC Bank USA, which claims it’s owed about $455 million.

Book blues

As book publishers gather later this week at the Javits Convention Center for BookExpo America, publishing’s annual right of passage to drum up enthusiasm for the slate of books coming out this fall, there isn’t much of a reason to be cheerful.

The turnout is expected to be way down — about 20 percent less exhibition space was booked this year — and many big publishers like Random House are cutting back while others like Macmillan and Rodale plan to skip the floor show entirely.

It doesn’t stop there. The number of after-convention parties has also shrunk

“There will probably be about 25 percent less people on the floor compared to the last time it was in New York in 2007,” said Lance Fensterman, vice president of Reed Exhibitions, which produces the event. “The show is a reflection of the industry and recently the industry is in quite a state.”

The event is not open to the public, but is generally considered a key venue for drumming up interest among retailers, which can ultimately influence what books consumers buy.

“Obviously, you never want to see an event get smaller, but the independent booksellers, mass-market booksellers and librarians are still solid,” Fensterman said. “If you have a more concentrated event and lose some of the peripheral people, that’s not altogether bad.”

Saturday night in particular will be especially dead.

Said one insider, “It’s the first time in memory I have nothing to do on a Saturday night.”

The New Yorker party was always one of the more popular soirées on the first big Friday night of the circuit. However this year, Editor-in-Chief David Remnick scrapped the event.

Doubleday, which usually holds an authors lunch, won’t do so this year. Instead, Sonny Mehta, chairman and editor-in-chief of Knopf Doubleday Publishing Group, is doing a combined cocktail party on Friday night at the famous Greenwich Village bookstore The Strand.

They’ll be battling with the Hachette Book Group, which is throwing a scaled-back party on the same night on the Hotel Gansevoort’s roof.

In terms of who’s going to have a presence on the floor of the Javits Center, Random House Inc., the nation’s biggest publisher, will be there, though the space it takes up will be slashed by more than 50 percent. One rival sniped that the new exhibition space is “postage-stamp sized.”

Random House spokesman Stuart Applebaum insisted, “We’ve right-sized our booth. The focus will be on the author auto graphing sessions we’ll be holding nearly every hour on the hour.”

Simon & Schuster Inc. is also holding steady on the floor but will scrap most of its par ties.

“We’re attending but with less bells and whistles,” said spokes man Adam Roth berg.

HarperCollins, which, like The Post, is owned by News Corp., has canceled its big-tent shindig and instead will focus on a low-key memoriam for the late Michael Crichton

Macmillan, the nation’s sixth- largest publisher, is skipping the convention floor altogether.

Not OK!

The shakeups at OK!, continue.

Former Gotham editor-in- chief Jason Oliver Nixon is now the creative director and is now on a par with Editorial Director Sarah Ivens on the masthead.

However, the appointment hasn’t yet translated into higher newsstand sales.

Sources said that the issue that hit last week sold an estimated 310,000 copies, down drastically from a year ago, when it sold 500,000 to 700,000 copies a week.

An OK! spokesman declined to comment on sales figures.

Meanwhile, there’s still no replacement for for mer West Coast Execu tive Editor Mary Ann Norbom, a tabloid vet eran who apparently was a victim of the kinder, softer OK! being pushed by Publisher Lori Burgess and OK! owner Richard Desmond. keith.kelly@nypost.com