Experimenter Publishing bankruptcy
From Wikipedia, the free encyclopedia
In early 1929 the publishing empire of Sidney and Hugo Gernsback was forced into bankruptcy. Their Experimenter Publishing Company published the following magazines: Radio News, Science and Invention, Amazing Stories, Your Body Quarterly, How to Make It and Aero Mechanics. They also owned two radio stations (WRNY and 2XAL) and the Consrad Company which published the Radio Listener's Guide and Call Book. They also published numerous books with titles such as: Radio Encyclopedia, Houdini's Spirit Exposed, and Popular Card Tricks.
Like many publishers they would use the money from newsstand sales to pay the printers for last month's magazine. On February 20, 1929 an involuntary petition of bankruptcy was filed against Experimenter Publishing and the judge appointed the Irving Trust Company as the receiver. The liabilities were estimated at $600,000 and the assets were only $182,000.
The April 1929 issues of Radio News (on the newsstand March 10) and Amazing Stores were the last to feature Hugo Gernsback as editor. The receiver appointed publisher B. A. MacKinnon as circulation manager and Arthur Lynch as managing editor. The magazines were in receivership for 6 weeks and did not miss an issue.
The bankruptcy proceeding went quickly and on April 3, 1929 B. A. MacKinnon paid $500,000 in cash and notes for the magazines and the radio stations were sold to another group for $100,000. The creditors were paid 95 cents on the dollar.
Gernsback was able to raise capital for a new publishing company. This new venture was discussed at the April 17 asset hearing. Mr. Gernsback said that his new magazines would be Radio Craft, Science Wonder Stories and Air Wonder Stories and that the first issues would be out in June.
There were stories that Gernsback's competitors were most likely behind the bankruptcy petition. The lawyers handling receivership said this was the first time they had seen a forced sale pay off the creditors in full. Also the original owner had enough other assets to start a new company.
The April 1958 issue of Radio Electronics (formerly Radio Craft) has a 16 page story on Gernsback's 50 year publishing history. Here is the complete description of the bankruptcy: "In the spring of 1929, Radio News, Science and Invention, Amazing Stories and associated magazines were sold to other interest. Radio News of April, 1929, was the last Gernsback issue."
Contents |
[edit] After the bankruptcy
B. A. MacKinnon immediately renamed the company to Experimenter Publications and then to Radio-Science Publications in November 1930. All of the magazines were sold to Teck Publications in September 1931. The magazines were in poor financial health when Ziff-Davis acquired Radio News and Amazing Stories in early 1938. They were listed as publisher in the March issues but the April issues were the first produced under their control. Radio News was published by Ziff-Davis under several titles until 1985. They published Amazing Stories until 1965 when it was sold to Ultimate Publishing.
Radio News competed with Radio-Craft for over 50 years but it reached a peak in the early 1970s. By then Radio News was Popular Electronics and Radio-Craft was named Radio Electronics. The best authors were writing articles for both magazines. The author was paid a few hundred dollars for the article but could make more from selling a kit of parts necessary to build the project.
In September 1973 Radio Electronics published Don Lancaster's TV Typewriter, a low cost video display. In July 1974 Radio Electronics published the Mark-8 Personal Minicomputer based on the Intel 8008 processor. The editors of Popular Electronics needed a computer project so they selected Ed Roberts' Altair 8800 computer based on the improved Intel 8080 processor. The January 1975 issue of Popular Electronics had the Altair computer on the cover and this launched the home computer revolution.
[edit] Proceedings
The New York Times reported on the bankruptcy with articles published the day after each proceeding. Here are some quotes and summaries from the articles
[edit] "Radio News Publisher In Hands Of Receiver", February 21, 1929
"An involuntary petition in bankruptcy was filed yesterday in the United States District Court against the Experimenter Publishing Company of 230 Fifth Avenue, according to Walter Ernst of McManus, Ernst & Ernst, attorneys for the petitioners."
"Liabilities are estimated at $600,000 and assets at $182,000. Federal Judge Mack appointed the Irving Trust Company receiver…"
"Station WRNY would continue operations, and that the publications of the company would be carried on under the temporary receivership of the Irving Trust Company."
[edit] "Bid For Magazines In Receivership", March 29, 1929
Bids were considered at a meeting before Referee Peter B. Olney Jr. in the Federal Building on March 28. Two publishers, B. A. MacKinnon and, MacFadden Publications, entered bids that would pay creditors in full.
MacKinnon offered to pay $200,000 cash and $250,000 in notes plus accept all obligations of company ($150,000 to $200,000). MacFadden offered $250,000 in cash, $125,000 of which would be used to pay off all claims of $3,000 or less. The other $125,000 plus $300,000 in notes would go to the larger creditors. The notes would be paid out of profits from the magazines.
There were several other bids for individual magazines or the radio stations. Chester W. Cuthell offered to pay $60,000 for the two radio stations. MacKinnon revised their offer to allow the sale of the stations. MacFadden wanted to keep the stations.
"The hearing was adjourned until next Wednesday at 10 A. M. to allow a committee of seven creditors to confer with the receivers in connection with the MacKinnon and MacFadden offers and any other bids which may be made in the meantime."
[edit] "To Pay 95% Of Debts In $600,000 Failure", April 4, 1929
The B. A. MacKinnon offer was accepted. The agreement guarantees payment of 95 per cent of the creditors' claims. MacKinnon got Experimenter Publishing Company and its subsidiary, the Consrad Company.
"The final bidding for the radio stations was spirited. Carl W. Kirchway, acting for The New York Evening Journal, bid $90,000 and then raised the bid to $100,000. Mr. Kirchway asked for and obtained a recess to enable him to reach William R. Hearst in California. It was reported that Mr. Hearst could not be reached and Mr. Kirchway decided that he was not authorized to exceed Mr. Cuthell's bid."
"At the outset the best bid for the property was $150,000." "The Irving Trust Company, as receiver, found the money to carry on the various enterprises of the bankrupt, and thus averted an early sale at a sacrifice price." "The first offer made for the radio station was $7.500."
"Lawyers discussing the result of the receivership under the new conditions, said that it was the first time in their experience when a bankrupt property, disposed of at what be considered a forced sale, had realized enough to hold the creditors safe."
[edit] "Gernsbacks Deny Diverting Assets", April 18, 1929
Hugo and Sidney Gernsback were questioned at a hearing yesterday "to discover any assets which may have been concealed or diverted."
"Attorneys for Mr. MacKinnon, questioned the method of the bankrupt companies in allowing hotels space for advertising in the magazines published by the Gernsbacks for trade bills instead of cash." The Gernsbacks explained that the space assigned to the hotels was unsold at the press date and the ads were "fillers." The trade bills (vouchers) were given to "wholesalers, advertisers and others with whom they did business."
Hugo Gernsback was also asked about letters soliciting subscribers for his new company, Gernsback Publications, Inc. and if the subscription lists of the bankrupt firm had been used. "Mr. Gernsback emphatically denied that such lists had been used."
"Mr. Gernsback said after the hearing that his new magazines would be Radio Craft, Science Wonder Stories and Air Wonder Stories and that the first issues would be out in June."
[edit] U.S. Supreme Court
The Experimenter Publishing bankruptcy made it to the U.S. Supreme Court, New York v. Irving Trust Co., 288 U.S. 329 (1933). The state of New York missed the deadline for filing claims but still wanted the back taxes the Experimenter Publishing owed. The court ruled that the Constitution gave control of bankruptcy to the federal government and the states would have to follow the rules and procedures like any other creditor.
[edit] References
"Radio News Publisher In Hands Of Receiver", New York Times, 1929-02-21, p. 36.
"Bid For Magazines In Receivership", New York Times, 1929-03-29, p. 13.
"To Pay 95% Of Debts In $600,000 Failure", New York Times, 1929-04-04, p. 22.
"Gernsbacks Deny Diverting Assets", New York Times, 1929-04-18, p. 13.
(08 April 1929) "Curtis Follows Hearst". Time Magazine. Retrieved on 2007-03-03.
Kennedy, T. R. (April 1958). "From Coherer to Spacistor". Radio Electronics 29 (4): 44-59.
Shunamen, Fred (October 1979). "50 Years of Electronics". Radio Electronics 50 (10): 42-69.
Stashower, Daniel (August 1990). "A Dreamer Who Made Us Fall in Love with the Future". Smithsonian 21 (5): 44-55.
Massie, K. & Perry, S. (2002). "Hugo Gernsback and radio magazines: An influential intersection in broadcast history". Journal of Radio Studies 9(2): pp. 264-281. Retrieved on 2007-03-02.
Banks, Michael A. (03 September 2004). "Hugo Gernsback: The man who invented the future. Part 1. The early days". Society for Amateur Scientists. Retrieved on 2007-02-13.
Banks, Michael A. (10 September 2004). "Hugo Gernsback: The man who invented the future. Part 2. Writing, publishing and inventing". Society for Amateur Scientists. Retrieved on 2007-02-13.
Banks, Michael A. (01 October 2004). "Hugo Gernsback: The man who invented the future. Part 3. Merging science fiction into science fact". Society for Amateur Scientists. Retrieved on 2007-02-13.
