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Aspen Mountain Press Owner Accused of Using Royalties For Personal Use

This story broke late last week.  Unfortunately, there have been low level rumors about Aspen Mountain Press for a few months but no concrete details.  One of the principals broke her silence and admitted that AMP is a mess.

What we discovered when we took over was a nightmare:

Hundreds of emails in all the AMP accounts, gone unanswered and unopened from authors and staff.  The customer service email account alone had over 500 unanswered emails over the previous eight months.  That took two people working eight hours to resolve—and in the process, we discovered a frighteningly large number of AMP books that had serious formatting problems for a long time.

Authors who were contracted and never heard back from the company, leaving their books unpublished and their rights tied up.  I found books from two years previously that were still stranded by AMP, the authors begging to just get a response from somebody…anybody.

and

The owner was using the business’s bank account for personal expenses.

Kerry worked backwards through the bank accounts and spreadsheets, arriving at the amount of back royalties an author was owed, the owner would go behind our backs and tell the author that WE were wrong and the author had already been paid most of that amount.

In the meantime, we were seeing these personal expenses—for food, souvenirs, car payments, doctors visits—coming out of the AMP account.  We decided to confront the owner about this in our weekly Skype conference—a system I preferred to use because we could keep transcripts.  When we pleaded with the owner to separate her personal expenses from the company’s, to set up a monthly draw account that would be a percentage of profits—so that we wouldn’t have the appearance of impropriety—she refused.  She also implied that we had used her Paypal account without her knowledge to pay a long overdue bill for advertising—when we’d mentioned multiple times during that conversation that we were doing so AT THE TIME. REAL time.

When authors began having communication problems, the excuse given was personal problems.  Boy, haven’t we heard that from Triskelion and Red Rose Publishing and a host of other publishers that soon went out of business.

Teddy Pig has a round up of a number of blog posts by AMP writers who are going public.

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

27 Comments

  1. Merrian
    Oct 16, 2011 @ 04:38:52

    Is this fraud being committed as well? Or at the least sufficient case for a formal investigation?

    ReplyReply

  2. Nadia Lee
    Oct 16, 2011 @ 07:00:20

    When authors began having communication problems, the excuse given was personal problems. Boy, haven’t we heard that from Triskelion and Red Rose Publishing and a host of other publishers that soon went out of business.

    They’re always too busy and/or sick to answer author emails or pay authors, but never too busy and/or sick to sell books and pocket the money.

    ReplyReply

  3. Lawless
    Oct 16, 2011 @ 07:45:30

    Paying personal expenses out of corporate accounts is also tax fraud. The owner had better hope the IRS doesn’t come knocking at her door.

    BTW, I was one of the customers whose e-mail about a technical problem with a download had gone unanswered.

    ReplyReply

  4. Loosheesh
    Oct 16, 2011 @ 08:15:21

    What an awful mess! I read the whole blog post and all the comments, and it made me want to bawl for the authors involved. As someone who’s *flirting* with the writing bug, this is a real cautionary tale.

    ReplyReply

  5. Jayne
    Oct 16, 2011 @ 08:20:40

    Is Red Rose Publishing still in business?

    This is just like watching summer reruns of the same old shit – just change the publisher name…

    ReplyReply

  6. Mireya
    Oct 16, 2011 @ 08:51:40

    Reminds me too much of several other now-defunct epubs. Red Rose and Triskelion were not the only ones that imploded this way. My main concern is that this woman sounds like she does believe her BS that she’s above reproach, and the fact that the monies are disappearing. As I mentioned in another blog, I will not be surprised if this company declares bankruptcy effectively tying up anyone that may still be there. The owner is not right in the head, she has the mentality of “the company is mine and I’ll do with it whatever the F I want” which translates to “all I care about is ME”.

    ReplyReply

  7. joanne
    Oct 16, 2011 @ 09:04:04

    Another publishing mess. At least this one seems well documented.

    Jane, for those of us not in the biz, would you explain the meaning of a DMCA notice? I googled but got several pages of angst referring to that notice but not the definition.

    ReplyReply

  8. Jane
    Oct 16, 2011 @ 09:08:14

    @joanne: Sure. A DMCA notice is a legal notice sent to a website owner saying “you are hosting an illegal copy of something in violation of that something’s copyright.” The website owner has to respond quickly and if the owner does not then that owner can be responsible for copyright infringement.

    The DMCA refers to Digital Millenium Copyright Act and it gives “safe harbor” to website owners so long as they act quickly when they receive a DMCA notice.

    Does that help?

    ReplyReply

  9. joanne
    Oct 16, 2011 @ 09:15:58

    Absolutely, thank you.

    ReplyReply

  10. Sunday Morning eBook News - Dear Author
    Oct 16, 2011 @ 09:38:09

    [...] demise of Aspen Mountain Press.  Any time someone doesn’t pay because of “family” excuses, it’s time to [...]

  11. Lynne Connolly
    Oct 16, 2011 @ 10:13:08

    This is always, always the risk an author takes when she makes the decision to go with a small publisher. I’ve been burned three times that way, and while I’m too savvy to think “never again,” I won’t be completely wiped out if one of my publishers takes the high road. This can stop a career in its tracks, and it’s hard to regain the impetus.

    First time – RFI West. Authors remember that company with shudders of horror and make the sign of the cross. An editor decried their business practices and started up a company of her own. Her name was Penny Hussey and she started-

    NBI. Two years in, Penny Hussey did a midnight flit and was never heard of again. It was intensely difficult to reclaim rights back when there was nobody to claim them from.

    Triskelion. Worked really well for a couple of years. Really well. Then the owner, Kristi Studts, first tried to blame others for her errors (she was all too eager to take the credit for others’ hard work when it was going well) then she refused to accept letters demanding rights back. She was still signing authors just before she declared bankruptcy. Getting the rights back proved a nightmare, but that wasn’t Kristi’s fault. That was the bankruptcy people, who decided that the bankruptcy clause in the authors’ contracts didn’t mean anything. But I blame everything else on Kristi. There were suspicions that she was also not declaring all the author royalties in the monthly statements. I’ve never seen any proof, one way or another, just rumour.

    There’s a pattern here. For authors – never, ever put all your books with one publisher, however much you love them, however lucrative that current contract is. You just never know. And that goes for the big names, too. Don’t let them tie you down. Don’t sign the blanket “next look” clause in the contract. Ever. negotiate it down, or get it struck out completely.

    ReplyReply

  12. Wahoo Suze
    Oct 16, 2011 @ 11:20:01

    I read through the Absolute Write thread yesterday, directed by Teddy Pig’s blog. A lot of the authors posting were tossing about legal advice, but all of them sounded pretty hopeless. Especially the international authors, and the ones who aren’t owed any money but want their rights back.

    What is a person’s recourse in such a case?

    - You signed the contract but never got the copy back with the publisher’s signature.
    - You sent a certified or registered letter, but it was returned as never claimed.
    - You followed all the rules and took all reasonable actions, but the publisher refuses to respond.

    After the contractually-specified time elapses (seems like 90 days for most people) and your rights have reverted, can you go ahead and start shopping the manuscript again? Or do you absolutely have to have some kind of documentation from the publisher returning the rights to you?

    ReplyReply

  13. Lynne Connolly
    Oct 16, 2011 @ 12:06:54

    Suzee, you’re pretty much stuffed for that manuscript, anyway.
    Bankruptcy proceedings take forever to get through, and you can’t do anything with the book until the courts decide. The first thing the courts will do is freeze all the assets – and that includes your manuscript. Forget the “in case of bankruptcy” clause in your contract. It doesn’t count. Bankruptcy in the US is done at federal level, and you signed your contract under state law.

    There is also the problem of first rights. That book has been released (I’m assuming it wasn’t caught in the release queue when everything went wrong – that is actually a better outcome). Readers have had the chance to see it, read it, or pass it by. Publishers are rarely interested in a book if it’s not fresh. You can persuade them to look at it, if it’s part of a series which you will then promise to give to them, or if you heavily rewrite it, but again, you’re probably stuffed.

    If you get no response to your request for a release, you’re probably stuffed, because publishers will want to see that release letter before they will agree to publish. You can sometimes persuade them that the old publisher has breached the contract, but where there’s even the whiff of a legal case further down the line, you’re stuffed. Imagine if JK Rowling had sold the first Harry Potter book to a publisher who’d gone bust, and then been unable to get her rights back, but claimed breach of contract. There’s a court case waiting to happen and massive damages, once Potter became the phenomenon it is today.

    If you never got the publisher’s signature on the contract, then you’re not bound to anything. you’re free. But be careful to tell any future publisher interested in your work the truth. Don’t fudge, don’t lie, don’t just give your book a new title and send it out. You will be found out.

    I sold the Pure Wildfire series to Ellora’s Cave, after the first book had come out with Triskelion. We waited to see if the first book would come out of the limbo of bankruptcy, and luckily it did. Otherwise I would have written an entirely new first book in the series, with new characters and new situations, and called the band something different. I still had the synopses to the series so it wouldn’t have been a dead loss. I retained the rights to the “world” (it was a paranormal series) in my contract, so I was free to do whatever I wanted with it. Still am. Just characters and situations are all I’ll ever grant rights to. I’ll do “next in series,” but not “next in world.”

    My best advice? Send a registered letter requesting your rights back and then forget it except to send reminders. Get on with your career, write new books and send them elsewhere.

    ReplyReply

  14. di
    Oct 16, 2011 @ 14:53:59

    Red Rose is still in business and has had new releases continually, since their “implosion.” O_o

    ReplyReply

  15. Courtney Milan
    Oct 16, 2011 @ 15:55:37

    @Lawless: Paying personal expenses out of corporate accounts is also tax fraud.

    It is also freaking stupid, because it opens the door to piercing the corporate veil. That means if people sue Aspen and the company has no assets, they can, for instance, attach her personal property. Like her house.

    That is just bang-head-against-wall stupid. Why bother incorporating if you’re going to rob yourself of the benefits of incorporation with stupidity?

    Then again, maybe AMP never incorporated. *eyeroll*

    ReplyReply

  16. Wahoo Suze
    Oct 16, 2011 @ 16:27:21

    @Lynne Connolly: So if you’re caught in the queue and weren’t actually published, you CAN shop your manuscript?

    And can you self-publish your reclaimed book based just on the expiration of the contract, or do you have to wait until the non-responsive party declares bankruptcy and goes through the whole process?

    I don’t have a dog in this fight, by the way, I’m just vicariously irritated at the thought of being trapped by someone else’s stubborn inaction. As my grandma used to say, shit or get off the pot.

    ReplyReply

  17. DS
    Oct 16, 2011 @ 16:32:29

    I poked around on the Colorado Secretary of State web site and it looks like the Trade Name Aspen Mountain Press expired 8/1/09. I couldn’t find any incorporation records.

    ReplyReply

  18. Lynne Connolly
    Oct 16, 2011 @ 16:57:39

    I should reiterate I can only tell you what I learned in the Triskelion case. I can’t give legal advice, please check with a lawyer.
    But my impression is no. Not if the publisher is still able to sign the contract and send it back, then you’re still bound. Besides, if the bankruptcy court decides there has been a deliberate dissipation of assets – if there was a flurry of authors getting their rights back, or significant selloffs, then they can choose to call them back.
    I just meant that if you’re still in the queue, your book hasn’t lost first publishing rights, and is still fresh to the market, so once the legal tangle is sorted out, it could be offered to another publisher as a fresh manuscript.
    I can’t emphasize enough – be honest with the next prospective publisher. And if that’s you, if you self-publish, you might have legal problems down the line.

    ReplyReply

  19. Jane
    Oct 16, 2011 @ 19:16:27

    @Wahoo Suze: I suggest that if you have a specific situation, you seek the counsel of a lawyer. Please do not take advice from an internet lawyer of any kind.

    ReplyReply

  20. Jeannie
    Oct 16, 2011 @ 19:31:48

    As a newly contracted author for my very first manuscript, this is truly frightening. I didn’t sign with AMP (thank heavens for that!) but it still makes me terribly nervous. Because you really never know. I guess there are risks with any epublisher. Nothing is ever guaranteed. You just have to have faith in your decision and hope for the best.

    I wanted to express my gratitude to this community of bloggers and commenters (Lynne, thanks for sharing!) for giving this disturbing situation a forum, so those of us out there trying to navigate ourselves through the ebook world at least have some idea who the good guys and bad guys are, and how to proceed cautiously.

    ReplyReply

  21. Samantha
    Oct 17, 2011 @ 21:35:02

    Why are the owners of these small publishing houses all bat sh@t crazy. I hear the owner of Red Sage is royally cukoo and doesn’t return emails from her own authors. I wouldn’t be surprised if they go under soon as well. Low rumors about accounting discrepancies as well. Didn’t they once published six Secret books a year now they are down to two.

    ReplyReply

  22. Jane
    Oct 17, 2011 @ 21:38:06

    @Samantha: I’ve heard complaints about Red Sage, mostly the communication thing but no royalty issues.

    ReplyReply

  23. Nancy
    Oct 24, 2011 @ 15:00:38

    You can do two things:

    1) Go to the Colorado State Attorney General’s website at http://www.colorado.attorneygeneral/complain, select the “Private Business” link, fill out and submit that electronic form.
    2) You can go to the IRS website (Hicks is “co-mingling accounts” which IRS doesn’t like) at http://www.irs.gov and download Form #3949A, fill it out and snail-mail it to the IRS.
    3) You can go the the Better Business Bureau-Denver’s web site and fill out their online complaint form. UNDERSTAND

    ReplyReply

  24. Nancy
    Oct 24, 2011 @ 15:09:43

    You can do several things to “pull in the authorities” here:
    1) Go to the Colorado Atty General’s web site at http://www.colorado.attorneygeneral/complaint, fill out and electronically submit their form.
    2)Go to the IRS web site (Hicks is “co-mingling accounts”) at http://www.irs.gov, download their complaint form #3949A, fill it out and snail-mail it to the IRS.
    3) Go to the Denver Better Business Bureau web site. THE BBB WORKS CLOSELY WITH THE ATTY GENERAL’S OFFICE. Fill out and submit their electronic complaint form.
    4) The Arapahoe County D.A.’s office told me there is no statute under which they can prosecute Ms. Hicks even though she is withholding royalties. This is a civil matter. Their recommendation is that the authors hire one attorney to represent all the authors and have that atty go before a Colorado judge to order Hicks to release all the authors. Or they recommend if you can hire your own personal attorney to go after Hicks, do so.

    Do the authors have the cohesiveness to band together/organize such that an attorney can be hired to represent them? I hope authors will step up to the plate and inundate the IRS and CO State Atty’s Office with complaints about Hicks/AMP and I hope this information is helpful!

    ReplyReply

  25. Stumbling Over Chaos :: Halloweenity Linkity Booity, plus GRL Swag Giveaway!
    Oct 28, 2011 @ 08:53:10

    [...] The story behind the closing of ebook publisher Aspen Mountain Press. [...]

  26. Angela Verdenius
    Nov 08, 2011 @ 02:37:18

    I went through this with Triskelion, my contract was one of those ‘frozen’. Basically, sining a contract that states your rights will revert back to you in the case of a bankruptcy, just doesn’t hold water. Luickily, the publisher who bought our contracts gave those of us who wished it our rights back.

    I only have one novella with AMP, so I’m more fortunate than many authors there. Snadra did say I could have my rights back and to give her one month, but I’ve heard nothing since.

    I have quite a few novels with Wings ePress, and they’ve been good to me, no problems there.

    However, I’ve started self-pubbing a new series and I’m loving it. I retain all rights and can upload and take off my books as I wish. If we keep seeing bad things happening to authors by some publishers, more authors will self-pub.

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  27. Tasha
    Feb 02, 2012 @ 20:44:46

    Update on Aspen Mountain Press via Absolute Write: At least one contractor received a 1099 that reported the amount due to her rather than the amount actually paid, which means Aspen Mountain Press has told the IRS this contractor received thousands of dollars that were never actually paid.

    ReplyReply

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