Monday, October 15, 2007

Loose Id to the Rescue

For anyone who hasn't seen already, check out this post over on Treva2007 on Livejournal. Loose Id plans to bid on the contracts held by Triskelion, which is going through bankruptcy. There was a lot of worried blogging going on about what'd happen to the Triskelion authors (and other authors whose publisher had or is going under) since bankruptcy courts don't recognize contract clauses which revert rights to an author if a publisher goes under.

Treva says:

If successful in their bid, Loose Id, LLC will release the majority of contracts at no cost to the authors who entered into them.

In a few cases, new contracts will be extended to the author from Loose Id in lieu of the Triskelion contracts. If an author chooses to reject the offer made them, their contract will be released by Loose Id, at no cost to the author.

This is incredibly cool and I think Loose Id deserves some major kudos, whether or not their bid is successful. If I ever get back to writing het, this publisher will be at the top of my submission list, 'cause you can't beat working with truly good people.



Bernita said...

A win-win!

Charles Gramlich said...

Sounds like a good group.

Ello - Ellen Oh said...

Bankruptcy courts don't recognize contract clauses? Hmmm, I know in certain cases Trustees can override some contractual obligations for the benefit of the insolvent but didn't know to this extent. Interesting, I should look into this for curiousity's sake. although I never did like bankruptcy law!

Angie said...

Bernita and Charles -- definitely. [nod]

Ello -- there was a lot of discussion about this a little while back and I was surprised to see that too. The issue seems to be that the publishing contracts are pretty much the only significant assets most publishers have, a few used computer systems and filing cabinets and whatever all else not being worth enough to pay the sorts of debts that'd send a business into bankruptcy. The courts consider the reversion of rights clauses as an attempt to cheat the creditors or something like that. It's not that they ignore "contract clauses" in general, but it's like.... [ponder]

Say the publisher owned a building and wrote into your contract that if they went bankrupt, the deed to the building transfers to you. The building would be seized and auctioned to pay debts regardless of what that contract said, because at the time of the bankruptcy, the building was an asset of the publisher and therefore owed to the creditors. That's a much more obvious situation, but the contracts with writers are seen as just as much assets as the building would be.

And in fact, someone said that they can go back several months looking for alienated assets. So if the rights to your book reverted to you in April and the publisher went bankrupt in June, you might find whatever rights the publisher had had sold at auction anyway. I'm not sure exactly how that'd work, especially if you'd already sold the rights to another publisher in the mean time, but it sounded pretty dire. It makes a sort of sense if you look at it from the creditors' point of view -- a business owner who knows he's on the way over a cliff could divest whatever assets they had, to friends or his own newly-filed corporation or wherever he could stash them, then hold on for a month or three before actually filing bankruptcy, hoping to be able to walk away with as much left as possible. That's pretty blatantly cheating, though, and the person in charge of the bankruptcy (I think it's a trustee) has a duty to look for that sort of cheating and prevent it. Reversion of publishing rights gets filed in the same slot, though, and a lot of writers end up in limbo. Even if your contract gets sold to a good publisher, someone you might've chosen anyway, it can be held up in court for ages, leaving you with no books being sold and no income for the work you put into the manuscript.

At any rate, this whole bankruptcy thing has made me very wary of submitting to any publisher that hasn't been around and healthy for at least a few years. Short stories maybe, but definitely not a novel. :/ I know older publishers can go under too, but statistically new businesses of any kind have a pretty miserable survival rate and even if Loose Id succeeds in buying the Triskelion contracts, you can't count on that kind of white knight riding to the rescue, checkbook in hand, every time.


Nancy Beck said...


Saw something about this on the Dear Author blog (I think). Sounds like a good win for the authors!


Angie said...

Nancy -- I agree, definitely. It's a great thing they're doing. [nod]