Entertainment Coupon Book: Back From the Dead

(4/23 Update: “Sold! Entertainment Coupon Book is Back From Bankruptcy”)

Two weeks after suddenly going under, Entertainment Publications is coming back – for now, and perhaps for good. The company that produces the Entertainment Coupon Books is getting a new lease on life. The bankruptcy trustee is working to restart the business and bring back employees, while awaiting the outcome of a proposed sale of the company.

And there’s already at least one interested buyer – the son of the couple who founded the company more than 50 years ago.

Documents filed with the bankruptcy court note that Lowell Potiker of HSP-EPI Acquisition LLC made an attempt to buy the financially-troubled company before it filed for Chapter 7 bankruptcy on March 12 (read: “Entertainment Coupon Company Goes Bust”). But “for various reasons, this transaction was never consummated,” trustee Charles Forman notes in his filing.

After the company went ahead with its bankruptcy petition, Potiker renewed his bid to Forman himself, offering $11.3 million for all of the company’s assets. Under Forman’s plan, “subject to higher and better offers,” Potiker’s offer would be considered the opening bid, in what could become an open auction for the defunct company.

The company’s bankruptcy took its employees by surprise, and had customers worrying whether the coupons in the books are still any good (read: “Entertainment Coupon Book Bankruptcy: The Fallout”). The general consensus was, yes, the coupons should still be good, but if the company is reconstituted under new owners, that would settle any uncertainty once and for all. It could also put hundreds of former employees back to work.

That was among Forman’s concerns, as he petitioned to get the business back up and running while awaiting the outcome of the proposed auction. For the last two weeks, former employees have been left to do nothing but lick their wounds and look for work, as the company’s website, Entertainment.com, remained frozen in time, advertising a St. Patrick’s Day sale well after the holiday ended. In the first sign that at least some employees have returned to work, the St. Patrick’s Day references have now been removed from the site.

It’s worth noting that Entertainment’s assets include things like its customer list, plus all of its records and information. And the domain name Entertainment.com alone could fetch a nice sum if sold on the open market. So the company could be worth more if it’s broken up into pieces.

But Forman says the intention is to resume business. And given the interested buyer, it seems unlikely he’d acquire the company just to sell it for parts.

An assistant said Potiker was travelling and unable to immediately respond to a request for comment. But he’s spoken in the past about what the company meant to his family. Founded in Detroit by Hughes and Sheila Potiker as “Sports Unlimited” in 1962, the company took the “Entertainment” name two years later, as it broadened its offerings from sports-themed deals to local dining and theater. “In the early years they ran it out of their house, and we had a printer in the basement,” Lowell Potiker said in an obituary for his father, who died in 2005. “It was his legacy,” he added, noting that the company “continues to live on and to raise millions and millions for charities every year.”

Of course, over time, the company had trouble raising millions even for itself. Entertainment Publications made $131 million in 2011, $95 million in 2012, and just $6.28 million so far this year. Granted, it’s only March, but the downward trend is clear. And that means any new owner will have their work cut out for them. Many customers and critics have said the offers in the books are not as good as they used to be. Besides, a thick book full of coupons may seem an anachronism in a world full of digital and online coupons. And the very proliferation of, and ease of acquiring, such coupons could signal that we’re well past the point that people are willing to pay for coupons anymore, if they can get plenty of other offers for free somewhere else.

The Potikers sold the company in 1992, and it changed hands several times after that. Both of the Potikers passed on before they could witness their company’s unfortunate end a couple of weeks ago. Whether his motivation is family pride, making a good investment, or a bit of both, their son just might be able to see to it that the company lives on for a long time to come.

(4/23 Update: “Sold! Entertainment Coupon Book is Back From Bankruptcy”)