Update: I was emailed that Ms. Studts has begun a new venture called Magickal Media, a web design corporation. While there appears to be no corporate filing under such name in Arizona, GoDaddy’s whois information shows a company out of Scottsdale Arizona (same county as Suprise) as the registrant (DomainsbyProxy.com).
One thing that occurs to me is that if there was mingling of funds between the personal accounts of the Studts and the corporation, it might be that the corporation is an alter ego and thus the Studts might be personally responsible for those debts.
***
The Arizona Republic reported on the Triskelion bankrupcty on August 17, 2007. While most of the article is a rehash of things that we have already covered here at Dear Author, there are a few details that might be of some interest. Kristi Studts, the owner, lauched Triskelion Enterprises in 2004. She lives in Surprise, Arizona. At one time Triskelion had "a stable of nearly 100 international authors." The Trisk Bankruptcy Trustee notes that the financial decline began when Triskelion attempted to make the move from ebook publisher to print publisher with authors’ royalty payments bouncing or failing to arrive in April. (The reporter calls these ‘paychecks’ but because the author/publisher relationship isn’t a employee/employer relationship, I think the paycheck term is inaccurate).
I looked up the bankruptcy documents via PACER. (Anyone can apply and the cost is $0.08 per page.). Interestingly, the debtor listed is not Kristi Studts, but Ronald Studts who is/was president of Triskelion. The petition was filed on July 9, 2007 and assigned case no. 07-03208.
Only about 5 authors have filed a notice of claim, albeit inaccurately.
The schedule of Assets and Liabilities was filed on July 20, 2007. The assets include accounts receivables in the amount of $47,717.68 with $30,000.00 of that being money ostensibly owed by Borders. I’m not sure whether this is anticipated profits or whether this is credit that is charged on the Borders account against returns.
The liabilities include $80,306.73 in bank debt (line of credit or credit card). Only seven (7) authors were identified as being owed a specific sum of money (probably bounced royalty payments or unpaid royalty payments) for a total of $844.46. This was far less than what I thought it would be. Ronald Studts claims that he is owed $18,000.00 for a loan paid to the corporation. Another large creditor is Edward Brothers who is owed $18,634.00. Edward Brothers is likely the company that was printing Triskelion’s books. The total amount of liabilities is $133,395.79.
Other points of interest:
- Kristi Studts withdrew a total of $48,577.05 from 7/3/2006 to 5/29/2007.
- The gross income Triskelion made while in business was $55,125.00 in 2005, $310,323.74 in 2006, and $20,457.00 in 2007.
- An auctioneer has been hired to "appraise, assemble, and store the property of the estate for safekeeping and to conduct a liquidation of such property" which suggests that they plan to sell, at the least, the inventory of books
- Sept. 4, when a meeting of Triskelion’s creditors will take place.
I’m not going to reiterate that it is important to know your rights (okay, I am reiterating it but author pleas for the judge to “do the right thing” don’t actually work unless the “right thing” is actually supportable by the law), but you can read our Dear Author bankruptcy primer here.
Clearly, I am in the wrong business. I should be an epublisher. Triskelion made $300k+ with poor editing and an even worse website. Imagine what a decent web designer and someone with an English degree could do.
Very interesting. Your statement about how much money Triskelion made is the reason why people start these epublishing businesses. I think there is SO much more to this business than meets the eye.
It is fascinating that the company went down when they went into print publishing. Hope the authors all find new homes.
The gross income Triskelion made while in business was $55,125.00 in 2005, $310,323.74 in 2006, and $20,457.00 in 2007.
to go from that to $20k the next year is stunning. I think the lesson here is the trying to fly, before you’ve perfected the walking process.
I think the reason why a few e-pubs feel pressured to go the printing route as soon as they can is because of the perception within publishing, that if you don’t have a print book out, you’re not a ‘real author’. I suspect that a few e-pubbed authors secretly feel this way, regardless of how much they deny it.
Having a book in print seems to be a way of validating both author, and publisher status.
Going to print has always been the equivalent of the “Money Pit” (love that movie) It’s a huge drain on resources and requires a very large cash reserve because of the way the system works. A publisher will spend a fortune fulfilling orders of which only half will likely sell. The money for these orders does not get paid immediately. (I don’t think) Books that are unsold within a certain amount of time will be returned. However, those returns are made by another section of the company so while an order for 1500 more books might come in, and the company pays to have them printed and sent out, at the same time winging back might be 1000 books for which the distributor/store will expect to be reimbursed. There’s also not that much profit in print so it becomes a resource sucking pit.
I feel so sorry for the authors caught in this debacle. For many, chasing their money is probably not an option since they can’t afford it. I hope they at least get their rights back.
Well, you have to remember that essentially Trisk only operated for about 5 months in 2007, so that’s not a full year, but you could still extrapolate that it wouldn’t have been 300k for the year.
I agree with Sarah that I think a large part of what happened is probably returns. If the company isn’t prepared to hold a reserve against returns in their accounts, then they’ll get eaten alive. However, I disagree with the general statement that it was because they went to print that they had problems. I would take a wild guess that their leap into mass market print probably played a large part of this. That would have required a larger fiscal commitment and the opportunity for a larger number of print returns, than the normal route of print on demand/print on order. Probably having 1/6 of the company profits withdrawn in less than a year’s time by the owner didn’t help either, though, so I don’t think we can say this is all about going to print.
I don’t think there’s any denying that most authors still love the feel of a print book in their hands. I’m not sure if I’d say that’s what makes them feel like a “real” author, but I wouldn’t argue at all that most every author I know loves that feeling of seeing their book in the bookstore. I still get a kick out of seeing Samhain books on the shelves, but for me that has nothing to do with whether we’re a real publisher and everything to do with reaching a wider customer base and spreading the Samhain dogma (epublishing is good, Samhain rocks, support your friendly epublisher) ;)
This may have a lot to do with their problem in general. And may become a problem for other small epublishers. On some level the curiosity of readers has probably peaked and if the company isn’t putting out a quality product readers are going to spend their money with companies like Samhain, who turn out a good quality on a consistant basis. This might account for some of the differential between Trisk’s 2006 and 2007 sales.
I pulled this quote from Jane’s earlier post and given the small amount of sales for 2007 I wonder if it’s worth it for an author to pay an attorney for the small amount of royalties that might be owed. Not being remotely familiar with the law, is it possible for authors to band together in a “class action” manner in order to avoid paying more than what they’re owed just to get their royalties paid? And I would think it would be more important to actually get the rights to their work back? Right?
TM – I posted a revision of that because I thought that some authors’ interests were in conflict with others. I do think, that for most authors, the rights are the most important. If you look at the assets and liabilities filed, the amount owed in royalty payments is tiny.
That really is an astonishing amount of money.
Sure it is. It’s also astonishing, and sickening that the authors didn’t see any of it. I’d just like for them to get their books back so maybe they can recoup some of their losses. Wife of JMorgan~Trisk Victim
Fascinating article, Jane.
It’s even more interesting to me — after perusing the docs — that Trisk filed for Chapter 7 dissolution rather than for Chapter 11 reorganization. Although Chapter 11 can be tricky, especially for the small business, if filed before the money train jumps the tracks, it can save a business operation that the owner really wants saved. In this case, though, apparently Trisk didn’t want to keep going — it just wanted out. One thing I learned in my Bankruptcy seminar is that there are a number options before filing bankruptcy that an individual or business can take to remedy financial difficulty. So why Chapter 7 and not Chapter 11? It will be interesting to follow-up with the case and see how the Trustee ultimately handles the estate (bankruptcy is not granted, i.e. debts are not discharged, until the end of the process).
I appreciate the explanation of the costliness of moving to print, but I’m still confused. Trisk had no real property, and as of at least 10//05 was not paying rent for office space. The desk and computer equipment they claimed was all located at the Studts’s home, so there seems to be little if no overhead in at least 18 months. They list approximately 15k books (inventory). To whom — if anyone — were they paying regular salaries? While I can completely understand how a move to print would be a significant cash drain, they went from 300K in profit last year to bankruptcy filing this year with 80K in credit card debt, and a loan of 18K claimed to have been given to the LLC by Ron Studts (separate from Kristi Studts’s 50K withdrawal). I don’t think the full story of Trisk’s demise has yet been told.
I owned a staffing multi-state staffing agency for 11 years. If the company was a corporation then the staff including founders would be employees. Their personal interest would be protected. How money is moved between corporate and personal accounts can be a red flag to IRS though. It shouldn’t happen outside of an establish person check, a loan on the books, a disbursement to investors at appropriate times.
The thing that happens to many small businesses is they want to rule the world and they don’t realize that big corporations are built over time with smart moves and often mergin with other companies. The RULE THE WORLD syndrome can destroy a small biz. Trisk did want to rule the world. They wanted to be EC overnight. I helped another small press do a business plan to get an investor to go to print. Returns and cash flow had to be considered. And investors are nervous becausethe bankruptcy rate for start ups is VERY high thus why banks don’t hand out checks to start a biz easily. In publishing the print end of things can be a death sentence because returns come in and eat up the cash you think you will have to pay the bills. The money might be coming but if it doesn’t come soon enough, your done.
Also, on my best year I did 16 million in sales. I remember an employer going WOW — you must be really rich. I laughed hard at that. We had grown by 50% that year. Our NET was pathetic that year. The expense to ramp up to handle that business we got (which was low margin) had almost destroyed us. Gross income and net are so very different. And let me tell you — that rapid growth caused staffing problems(no time to train) and all kinds of issues that later bit me in the backside. So rapid growth seems grand but its not. Some of the richest smartest people, build a biz up and then sell that puppy off and put the money in the bank.
The corner phone company just can’t take on Southwestern Bell but they can become a threat and get bought out or merge. Trisk wanted to be Berkley or Pocket and they wanted it now….I say this because I did promo work for them for ONE month. That was enough for me. They wanted it all and now and it just doesn’t happen that way.
And by the way – BEGGED them to change that website and they wouldn’t do it. They loved it!
I owned a staffing multi-state staffing agency for 11 years. If the company was a corporation then the staff including founders would be employees. Their personal interest would be protected. How money is moved between corporate and personal accounts can be a red flag to IRS though. It shouldn’t happen outside of an establish person check, a loan on the books, a disbursement to investors at appropriate times.
The thing that happens to many small businesses is they want to rule the world and they don’t realize that big corporations are built over time with smart moves and often merging with other companies. The RULE THE WORLD syndrome can destroy a small biz. Trisk did want to rule the world. They wanted to be EC overnight. I helped another small press do a business plan to get an investor to go to print. Returns and cash flow had to be considered. And investors are nervous becausethe bankruptcy rate for start ups is VERY high thus why banks don’t hand out checks to start a biz easily. In publishing the print end of things can be a death sentence because returns come in and eat up the cash you think you will have to pay the bills. The money might be coming but if it doesn’t come soon enough, your done.
Also, on my best year I did 16 million in sales. I remember an employee going WOW — you must be really rich. I laughed hard at that. We had grown by 50% that year. Our NET was pathetic that year. The expense to ramp up to handle that business we got (which was low margin) had almost destroyed us. Gross income and net are so very different. And let me tell you — that rapid growth caused staffing problems(no time to train) and all kinds of issues that later bit me in the backside. So rapid growth seems grand but its not. Some of the richest smartest people, build a biz up and then sell that puppy off and put the money in the bank.
The corner phone company just can’t take on Southwestern Bell but they can become a threat and get bought out or merge. Trisk wanted to be Berkley or Pocket and they wanted it now….I say this because I did promo work for them for ONE month. That was enough for me. They wanted it all and now and it just doesn’t happen that way.
And by the way – BEGGED them to change that website and they wouldn’t do it. They loved it!
Again, I feel for the authors and employees hurt by this. I “pulled” six titles from Triskelion long before the real problems began, and was vilified for it. Even changed my pen name it was so ugly. No one has mentioned Studts’ pen name of Lynn Warren (is that the right one?–my short-term memory stinks)–I am not revealing anything she did not reveal herself at RT two years ago, with a name tag. When I went into bookstores, L. Warren’s book was the one I saw on shelves. I think there’s far more to this sad story than we’ll ever know.
I encourage former Triskelion authors to pick themselves up and move on, keep writing new material, keep the faith. My self-esteem was bashed repeatedly by Ms. Studts, and because she was my first publisher, I believed her for a while. Her MO of bashing new writers, constantly changing the “deal”, the rules, the guidance to become a “good girl” was almost more devastating than doing bad business.
I’m only sorry that I just found the courage to say what I really think now that she cannot “hurt” me. I wish I would have come out publicly before now and perhaps saved some new writers heartache. When they’d write me saying “should I submit to Triskelion,” I would dodge the question. I regret that now.
If anyone thinks Trisk authors saw very much of this $300K you are sadly mistaken. If you looked in more detail at the bankruptcy documents, Kristi Studts paid herself a very suspicious high-dollar amount for ‘royalties’ in July 2006. My feeling is that Trisk went bust, not because of some rush to print, but because something fishy was going on with the handling of money within the company itself. How anyone can justify paying themselves a salary when their bills go unpaid is beyond me. I am also guessing that the $80,000 in credit card debt was not credit used solely for business purposes. I am so curious to see how this all plays out in court.
Ciar– its hard to say anything in that situation because you could be accused of slander. It’s very touchy and hard. You are right about moving on and keep rolling. Trisk had a lot of amazingly talented authors who have great success ahead of them…
And on the paycheck thing that is common and bad. owners pull too much salary way too early. Sadly. You’re right that this could have been an issue.
I was a brand-new author at Trisk. My first book went out in early June. I never saw a penny of royalties and yet my name is not listed on the bankruptcy documents as being owed anything. There is a lot of misinformation in the bankruptcy filing. Not sure why. Not sure if she just did a really poor job of accounting, is not telling the whole truth, or if I will have an opportunity to make my ‘claim’ once the Sept. 4th date has come and gone. The only thing I have received is an official letter from the court about the court date and very generic info. I was told in that document to do nothing but wait.
All I want is my rights back, so I can sell the book elsewhere. But it looks like that will be a very long process. Just wanted to let everyone know the documents are not 100% accurate.
Gah, what a mess. Jane, if you do decide to venture into epublishing I’m sure you’d do it right!
Re feeling like a real author, for me that has nothing to do with format and everything to do with income and readership, thankyouverymuch! A significant chunk of my earnings from ebook publishers comes from the books going into print. If those print sales didn’t happen, I’d make less money. Worse, I’d reach fewer readers. While many have discovered ebooks, a lot of readers have still never tried one and are far more likely to pick up one of my books while out browsing the shelves at a brick and mortar store than they are to go to an online ebookstore and browse titles. Like Angie said, it’s about reaching a wider customer base. (Although ebook sales do continue to grow, a trend I hope continues!)
300+ to 20K. My first thought was drug, alcohol or gambling addictions. I’m probably way wrong, but goodness me, that’s a big drop in income. I can see why some e-publishers are slow to go into print.
After seeing the Trisk website, why would anyone want these people to design their own website? *shudder*
And as for withdrawing money from your business and letting bills go unpaid, as an owner of a small startup, I decided at the very beginning not to draw a salary until my company started making steady, POSITIVE EAT (I figure at least 3 years down the road). Many businesses fail because of lack of cash and if you can’t commit to pouring cash into your business for at least the first three years, don’t start one.
I'm only sorry that I just found the courage to say what I really think now that she cannot “hurt� me. I wish I would have come out publicly before now and perhaps saved some new writers heartache. When they'd write me saying “should I submit to Triskelion,� I would dodge the question. I regret that now.
Ciar, there is NO WAY to let anyone know something like that. I can tell from luke warm responses whether a publisher is awesome or not. And everyone’s experience may be different.
After being vilified just for pulling your books, I can totally see why you wouldn’t open yourself up to being on their radar.
To me, what’s sad about this is that other epubs are being judged by this huge mess. I’m of the opinion (and I could be wrong) that the RWA changes are due somewhat to these mishaps.
Magickal Media!
Is there a market for retro 90′s web design?
O_O
I should be an e-publisher.
:rolls up her sleeves:
Who do I know who can make me some Poser covers?
I have good and bad from Trisk. I should have pulled my books before I did, and I still have the rights of 5 books tied up in this mess (The Haunting, Black Leather, White Lace, Rubies of Fire, Diamonds of Ice and Eternal Beauty, Eternal Darkness, but the contract for the last one runs out this month). When I asked for all my rights back, Kristi wrote to me asking to keep some of them, to “tide them over.” I did smell a rat because she picked one book from every series, but I negotiated out of that and the books she kept could be worked around. Small victory, especially since the great reviews and Recommended Reads have been coming in for Rubies and Diamonds. And they’re not currently on the market.
What recently opened my eyes to the whole damned mess was the royalty statement from Samhain for my first book there. Without revealing company secrets, can I say I sold in one week there what I was told I sold in six months from Triskelion?
My consolation is that the authors involved in these closedowns often go on to better and greater things. I’ve moved on to Samhain, Loose-ID and Ellora’s Cave, and I’m much happier there.
Samhain is just clipping along nicely. I haven’t disappointed with their books yet. But Bam’s book is in my TBR, so we’ll see if my opinion changes.
Yeah, it’s sad to think that my books helped that “banner year” of 2006, and yet I only got one month’s royalty check for my print book that came out over a year ago.
I doubt I’ll ever find out how much it sold over all–and is still selling. (It’s stlll at Amazon and could be in bookstores through out the US.)
It’s a “live and learn” process in the e-publishing world. I’m sticking with the publishers who treat me like a human being–regardless of sales. If they treat me right–I’ll stick with them for my contract length. But if anyone ever starts acting up like Trisk did… I will be out of there faster than the speed of light!
It’s sad that a person (who may have been dishonest no matter what business she was in) has made epubs look bad.
Regarding the print vs epub. While I may post this anonymously (I’m a chicken, sue me) I can honestly say before I knew of epubs I wanted to be in print and whether I have a successful career in epubs, I still want to be in print.
Yeah, you can gross that kind of money and better in e-publishing. Of course if you do, and you want to keep making that kind of money, you have to pay out most of it in royalties, cover art, bookkeeping, editoral payments, etc. etc. and do it timely and accurately, not just for a year but for as long as you stay in business. Your return isn’t going to be what you gross–trying that gets you into illegal activity. Oh, and you do have work your butt off.
Treva
The Arizona Republic has a new article (24 Aug) on Triskelion, focusing on the impact on authors.
If the first Republic article above is correct that the owners of Triskelion are starting a new business in the Phoenix area, all this reportage can’t be good for their startup.
coming in late on this but I had just had to chime in. I am so frickin glad that I had the rights for my books with them returned to me in 2006. Our parting of ways was amicable and came about due to some issues we couldn’t work around. At the time, it was a huge headache. Now I see it as a blessing in disguise.
Like Ciar, I also tried to warn any new authors who would listen about Triskelion –way back when–by telling them that the actual address of Triskelion was a UPS drop box in Surprise, AZ and other perils that lay ahead. I worry that my voice wasn’t loud enough and I just absolutely grieve for the authors caught in this tangled web. Kristi and Ron come from Real Estate and I believe Ron still owns a real estate company. When I got one of my nasty letters from the Studts, Ron signed as President–this was in 2005/2006, so he’s always been involved though Kristi ran the company. as Ciar stated Kristi writes under the pen name of Lynn Warren. ( I fondly refer to that awful period as Triskelion Wars-and at the end of the day, got all my rights back—what a blessing!! in light of the developements) This combined with the sad state of affairs with Silk Vault just puts a bad light on an otherwise brilliant industry of ebooks. And there is one more yet bad apple who is waiting in the wings, I fear. I hope when all this passes, readers, writers, authors will be able to move on and see a few very bad apples don’t spoil the barrel. I hope that the authors trapped in this vortex of deceit and betrayal have a representative to meet in September and have a voice in the future of their novels. God Bless, I am watching and praying this will end well. Linn
Rumour has it that Mardi Gras publishing isn’t too far away from folding. I’m willing to believe those rumours.
Karen, I’ve heard the rumors too. And there are a lot of authors who aren’t being paid, a former editor who built the place is owed over $ 1900–that I know for a fact. I’ve also heard that owners might just walk away from MGP and form a new publishing company. (How can they do that???) I hate it if it happens because the ebook industry doesn’t need another black eye especially in light of the Triske fiasco. As they say……stay tuned. Linn
-OMG—if this all wasn’t so terribly tragic!!!!! I’ve clicked on the links to the article and the absolutely hands down terrific rebuttal by Brenda Lyons who lays the facts out–go read her thoughts on the same page as the article. Then I clicked on to Magical Media…and there is Kristi Studts’ new business!!! She also does book covers on Magical, and aren’t those the Triskelion Covers???? I see Lynn Connelly’s Diamonds of Ice..so I click trhru to Lynn Warren’s and would you believe….yep, it takes you to Lynn Warren’s site, and there are the two dogs who are featured on the Ron Studts real estate website. Holy Cow!–isn’t anyone at the bankruptsy court watching!!!!! I am dumbfounded by this. Thank you Dear Author!!–for keeping us informed and doing such an amazing job. If I ever need a private investigator….I know who can get the goods!!!! Linn
I wouldn’t call it tragic, Ciar.
We’re in a business where for every published author there are at least 20 waiting to take her place. That’s the basis of all these problems right there – there’ll be another one along in a minute.
So you take a risk. I love e-publishing, and I never want to leave, but this is one of the risks. You have to have a certain profile to be a successful e-author and one of them is the ability to roll with the punches, to take them and carry on. You have to balance the risks, minimise them as much as you can and then go for it.
I’ve been asked for some work by New York publishers but my e-publishing background gives me a little more choice, and I can be more selective.
I’m still not leaving e-publishing.
What keeps me going is the fact that I write anyway. So I just carry on.