Publishers Weekly has a news item announcing that Dorchester Publishing has closed its doors and most, if not all, of its magazine and book titles will be sold in foreclosure.
Agent Kristin Nelson reports:
Last year when my lawyer and I sat in on the phone calls where Dorchester disclosed their financially precarious position, the list of creditors was part of that conversation. There are at least 6 companies that might find it worthwhile to force Dorchester into Bankruptcy to recover monies owed.
And I hope they do.
Passive Guy doesn’t have any inside knowledge of this matter or of publishing contracts for the Dorchester Books being sold.
However, as a general proposition, if an author has signed a publishing agreement with a publisher, the publisher is free to pledge its interest in that agreement and the underlying book(s) as security for its debts.
If the publisher then fails to pay those debts, the lender/secured party can seize that publishing agreement and sell it to the highest bidder, whoever that may be. The author effectively has no control over who his/her publisher may be at that point.
While the purchaser of the contract has an obligation to honor its terms, it’s not difficult to imagine that some purchasers might be more inclined to honor contract terms and others might be more inclined to collect sales revenues without appropriate royalty payments.
When we talk about publishers failing, this is part of the story of what happens.
Thanks to Kris for the tip.