Local advertising agency files for bankruptcy

By Susan Hooper
Advertiser Staff Writer

The Schiller Group Ltd., a Honolulu advertising agency headed by industry veteran Martin Schiller, filed for Chapter 7 bankruptcy liquidation this week.The firm listed assets of $72,554 and liabilities of $989,244, according to the filing in U.S. Bankruptcy Court. The company had seven employees and closed its doors Thursday, a former employee said yesterday.

Martin Schiller said the loss of key clients spelled the end of his agency. Advertiser library photo

His lawyer, Robert Faris, said the firm's problems dated to 1998 or 1999 when it lost key clients.

"The company had suffered, like everybody else, from the (state's) economic downturn," Faris said. "More or less at the same time they lost some clients ... and they weren't able to adjust their expenses enough to keep up with the loss of revenues. And they ended up with this overhang of unpaid bills that couldn't be paid."

Faris said nearly all of the company's unpaid debts date from more than a year and a half ago. Since then, he said, the firm has been "break even or better."

Faris said Schiller met with creditors in the spring of 2000 and proposed paying about 22 percent of each claim over a five-year period. Of the 65 creditors at that time, 61 agreed to the plan, Faris said.

Without the cooperation of the remaining four creditors, Schiller could not proceed with his repayment plan, Faris said.

In May, Buckley Broadcasting Corp., owner of New York radio station WOR, filed a lawsuit against The Schiller Group over its unpaid bill, Faris said. The bankruptcy filing lists Buckley's claim at $12,240 .

Faris said The Schiller Group continued to negotiate with Buckley Broadcasting after the lawsuit was filed. The Schiller Group filed for bankruptcy after failing to reach an agreement with Buckley, Faris said.

The Schiller Group's bankruptcy filing lists one creditor with a secured claim — Hawaii National Bank, which is owed $14,068 — and 75 creditors with unsecured nonpriority claims.

The creditor with the largest unsecured claim is the Hawai'i Newspaper Agency, whose debt of $268,000 was incurred prior to March, according to the bankruptcy filing.

Faris said Mark Yee, a bankruptcy trustee, has been appointed to review the firm's assets and determine whether anything can be liquidated to provide payment to creditors. Faris said there will be a creditors' meeting in "about a month."

Some in the Hawai'i advertising industry yesterday praised Schiller's professionalism and expressed concern about the bankruptcy. They said The Schiller Group filing was an isolated incident rather than an indication of softness in the advertising business here.

"Agency business has always been very competitive and agencies have come and gone over the years," said Emi Anamizu, managing director and chief executive officer of Ogilvy & Mather Hawaii. "Every now and then it happens, like in any other industry."

Dennis Christianson, vice president and creative director of Laird Christianson Harris Advertising in Honolulu, said, "I don't think this is indicative of the industry in any kind of broad sense at all.

"There are several agencies in town who have enjoyed growth over the last few years, many with stable billings, and a few with reduced billings, and it's kind of always that way. It's a dynamic industry and things ebb and flow."

Reach Susan Hooper at 525-8064 or shooper@honoluluadvertiser.com.