From author Carolyn Jewel at Writer’s Diary:
I am an author who was with a publishing company that was heading toward bankruptcy. (Dorchester Publishing) This post is about what the experience was like for me. My situation ended up with a silver lining, but the outcome I had was never certain, just as it is not certain for any of the EC authors who are wondering if they’ll ever get paid or if they are going to lose their books.
If you have books with a publisher in the Flush Pile, here’s what’s quite likely:
1. No, you are never going to be paid money owed to you.
2. Yes, you could well lose your books. Gone.
Every publishing contract I’ve ever signed has had a bankruptcy clause. The clause means nothing. Zero. Zlich. It might as well not be there. If your publisher declares bankruptcy, your book is an asset of the company to be liquidated and turned into cash to pay to creditors. Authors are dead last on the list of creditors.
At Dorchester, authors talked amongst themselves. Advances and royalties due to authors were paid slowly. Some of use waited months for advances to be paid. More and more often, authors just weren’t paid. Foreign rights got sold and authors were never told. Those monies never appeared on royalty statements. I was surprised, for example, to find that one of my books had a Dutch translation. Toward the end, I also learned about other translations I was never told about and never paid for. One of them did not even have a signed contract despite being on sale. As royalties continued to be paid in haphazard fashion, there were consolidations and reductions in books, imprints and staff, and sales of rights to backlist titles of prominent authors to other publishers.
. . . .
Dorchester had not filed for bankruptcy, but there was wide speculation that they could not recover from their difficulties and a filing was felt by some to be inevitable. I was advised that it was possible that rights reversions made within the year prior to a bankruptcy filing could be deemed fraudulent and any reversions negated. I was horrified to learn there was case law to that effect.
Even before the non-payment issue was a severe problem, it was clear to me that at long last, there was a good reason (ie, self-publishing) for an author to vigorously pursue reversions for all books that met the criteria of the out of print clauses. I’d read all those clauses and had begun that process with all my titles well before this. And by the way, I was roundly ignored everywhere except for Harper-Collins, who noted the request and put it on their schedule for a decision 6 months later. Literally. The meeting was in 6 months. Let that sink in.
My reversions from Dorchester came through at the end of 2010. Other publishers were an even harder nut to crack. St. Martin’s Press was spectacularly uncooperative. Hachette — I don’t even have words. And I have loads of hind-sight advice about what reversion clauses should say.
. . . .
My advice is going to sound harsh. But, assume you will never be paid. The risk of waiting to see if your publisher rights their ship is the complete loss of your rights in your books. This is your career and you must not fail to take steps to protect your back list and front list.
Link to the rest at Writer’s Diary and thanks to C.R. for the tip.
Here’s a link to Carolyn Jewel’s books