According to Courthouse News Service, Strictly By-The Book claims that the Hachette Book Group defamed and defrauded it by stealing proprietary information to learn about the remainder business, then refusing to deliver remaindered books to its customers, and defaming it to others in the publishing industry.

Since the countersuit was filed, Hachette has withdrawn its suit against Strictly. Conversely, Strictly has not withdrawn its suit. The remainder house claims to have paid Hachette nearly 55 million dollars since 2004.

Hachette had claimed, in the now dismissed suit, that Strictly owes Hachette 5.6 million dollars for product and back office support supplied by Hachette, the result of a distribution agreement inked out in 2006. The publisher further claimed that Strictly was in breach of that contract.

Strictly filed the countersuit claiming that HBG knowingly made false statements claiming ‘non-payment” since July 2008. The remainder company’s countersuit says that this statement is “knowingly false.” SBTB’s countersuit claims that they have paid HBG more than $7,000,000 from July 2008 through January 2009. The complaint also sites a statement from Dennis Balog, HBG’s Vice-President for credit services who wrote SBTB in October of 2008. “I am well aware that you have never missed a payment with us. We have an exclusive agreement with SBTB and they have never paid us late.”
The suit also says that, “because of the small, interconnected world of the remainder business, they are demanding damages for defamation, tortuous interference, fraud and Rico conspiracy. Strictly is seeking five million in damages on each claim.

According to Publisher’s Weekly, SBTB claims that Hachette began looking at ‘taking over’ the distribution of remainders because it had access to Strictly’s record showing how profitable the remainder business could be. Strictly had annual gross sales of approximately 150 million dollars between 2005 and 2008. SBTB charges that “HBG began to implement a “take over” business plan after SBTB refused to buy a list of remainders in October because SBTB was concerned about the impact the recession would have on the remainder market. At that time, according to the suit, HBG began spreading rumors about the company’s health.