DORCHESTER PUBLISHING

To our valued creditors:
First, I want to thank all of you for your support and your understanding. The past eight months have been a significant challenge, and the Dorchester companies have undergone a major restructuring. In response to the challenges, we have changed management, continued to aggressively cut costs and are converting our production capacity to respond to the digital revolution affecting our industry. As a result of these efforts we are beginning to experience growth in e-book revenues. Maintaining a limited trade book program has also been important, keeping our authors featured in retail stores across the country.

We have already had some success. As digital sales have begun to replace lost print book volume, we have been able to commence restoration of royalty payments, and we expect to this trend to accelerate. At the same time, we have experienced author reversions that have significantly complicated the tracking of obligations and suppression notices to retailers. This has been the basis for the recent negative Internet blogs. Our management and employees have been working hard to execute corrective action.

In the midst of all of these efforts, we have decided that our companion magazine business, Dorchester Media, is not sustainable in its traditional form. Hence we have decided to put it up for sale and focus all of our resources on shepherding the book publishing business into the digital age. Part of that process has been suspension of its print book club operations and consideration of its sale.

In the recently announced disbandment of the unofficial creditors committee, the company’s ability to reorganize was questioned. In reply, we submit that a slimmed down Dorchester, focused on digitally savvy book publishing, will be a success resulting in significant payback to all its creditors. In order to review our progress and plans, you are invited to attend a meeting of the vendors [details omitted - RC]

I thank you for your patience at this difficult time for Dorchester.

Sincerely,
Robert Anthony
May 5, 2011