Jun 20 2007
DISCLAIMER: Just to CYA, I feel like putting up a disclaimer. There is much that I don’t know about the Triskelion situation and any discussion regarding the law and the legal issues surrounding copyrights and publisher bankruptcies are general and not to apply to any one particular situation. If you feel like you are in a position where you, personally, need to apply this information to a case, you should seek a lawyer right away. My posting of my thoughts regarding the legal issues surrounding this matter or matters similar should not be construed as specific legal advice nor does it create an attorney/client relationship.
On the heels of its RWA dis-invitation; complaints of unpaid royalties; and the resignation of Gail Northman, Triskelion Publishing is closing its doors. From a source, it appears that Triskelion will be filing Chapter 7 Bankruptcy which is a liquidation of assets rather than a Chapter 11 or 13 which is a re-organization.
The rights that Triskelion owns, depending the contract, may be sold to benefit the creditors, which can be an author who hasn’t received royalty payments to the internet service provider to the web developer to the printer.
Edited to Add: I had received some emails about what exactly bankruptcy means and while I have a little knowledge, if you are an author and desire to make a claim, I would seek the counsel of a lawyer who specializes in bankruptcy law.
When a corporation files Chapter 7 bankruptcy, it is saying that it cannot continue as a going concern because of its debt to asset/income ratio and because it is not desirous of being a going concern. Once the bankruptcy is filed, a “trustee” is appointed by the State or Federal court. This trustee is responsible for gathering the assets of the corporation or the “estate”. Assets includes all the property, whether real or intellectual, that the corporation owns. These assets are held by the trustee until s/he determines how the funds of the assets are distributed.
Debtors are paid according to priority. Secured creditors have first priority. An example of a secured creditor is the mortgage lender. The mortgage lender loans money and takes a “security interest” in your home. Automobile lenders are also secured lenders. Unsecured lenders would be credit card companies.
Assets that are disposed of prior to the filing of the bankruptcy can be challenged by a creditor. For example, if Marie Treanor’s rights were sold to Ellora’s Cave while Triskelion knew it would be filing bankruptcy, any creditor would have the right to challenge that sale. To engage in pre-bankruptcy transfer of assets could endanger Triskelion’s ability to discharge its debts.
Discharge of the debts is the ultimate goal. Most times, in a bankrupcty, most debts are discharged and the creditors receive only pennies to the dollar of what was originally owed to them. As one of the commenters said, bankruptcy really doesn’t do anyone any good. I hope this clears some of questions up. If you have others, please don’t hesitate to post them.