This post was originally going to be about the Dear Author settlement, but then Ellora’s Cave’s former Managing Editor, Nina S. Gooden, spoke out. So I’ll cover that first.
Second, It appears that the gears are finally starting to show some traction and we’re starting to see visible signs of the Ellora’s Cave v. Dear Author settlement.
I’m going to give a summary of those recent developments, then I’m going to discuss a few rumors going around and my take on those rumors. This is likely to be the first of several such posts.
And, at the end, a follow-on to my previous Ellora’s Cavemen anthology post.
Ellora’s Cave Former Managing Editor Speaks Out
Nina S. Gooden posted this eye-opening (and mind-boggling) post today.
In the summer of 2013, I interviewed to work for Ellora’s Cave. I remember the initial conversation like it was yesterday. In order to find a quiet space, I sat in my sister’s van in North Carolina’s muggy 90-degree weather. That’s how badly I wanted to work for this company. I was hired for what I thought would be my forty-year plan. I left my long-term boyfriend in Las Vegas, as well as another Managing Editor position, and moved out to Akron, Ohio to be the Managing Editor for Ellora’s Cave.
She talks about the heartbreaking treatment of authors:
Even now—with several years’ worth of distance between me and the conference room that made me develop what my friends jokingly called a “mild drinking problem” for the duration of my stay in Ohio—I get chills thinking about it. The blatant disregard for authors as a whole, the almost maniacal plans to keep authors locked into contracts that were unfair, just so they couldn’t publish elsewhere…the whole situation broke my heart.
…and…
I don’t know why I thought that a group of people, who had laughed at a story about an author not being able to pay her medical bills because of missing royalties, would somehow care that I needed this job to maintain any kind of reasonable living situation.
Then, after she was laid off with the other professional staff in January:
Ellora’s Cave hasn’t answered a single one of my emails in the last year—except to tell me to email other addresses. My pleas for them to respond to background checks phone calls or to provide the promised letters of recommendation have gone unanswered. When I tried to contact them, asking for the paperwork for my curiously empty IRA account (an account EC should have been contributing to), all I heard was the crushing sound of disinterest. I hate that I am now on the other side of what the frustrated, frantic authors I helped hurt must have felt.
I’ve been in similar work situations (in another industry) and can deeply resonate with this post.
The entire post is worth a read, and it’s also a great cautionary tale for why you, as a writer, should negotiate the hell out of your contracts.
Dear Author Revelations about Court Costs
The Dear Author Defense fund page was updated yesterday, complete with the rather staggering amount of fees:
To date, I have paid the following in fees:
Randazza Law Firm: 115,712.29
Lefton Group: 2,855.00
Expert witness fee: 5,075.00
Brennan, Manna & Diamond: 8,936.06
The total was: $132,578.35
Note that the legal fund raised $55,086 (before fundraising costs from gofundme and PayPal), hence the vast majority was not covered by the fundraiser. Jane Litte adds:
I am so grateful for everything you all did to support this fund, and given everyone’s generosity, I just did not feel comfortable doing another round of fundraising. I should also note that Marc Randazza discounted his normal rate, so while fees were very substantial, they could have been even more.
Jane Litte’s Error Corrections
As covered in this Dear Author post.
My commentary follows:
I made some errors and want to correct them:
- Tina Engler has represented that she has not purchased a house in West Hollywood and has not indicated to me that she did.
- She has not gone on any recent Rodeo Drive shopping trips.
The principals of Ellora’s Cave did not receive “no interest” loans.
It has been represented to me that, at the time of the post, most or all authors had been paid within their individual contracts.
Finally, Patty Marks has not said that the company will be entering bankruptcy or that any contracts will be sold in bankruptcy.
My commentary:
First, note that the correction is quite limited in scope given the wide-ranging narrative of the Curious post.
- Tina Engler has represented that she has not purchased a house in West Hollywood and has not indicated to me that she did.
I’d previously mentioned that I’d found Tina Engler saying it was a lease. That said, it was a mistake, not a lie (nor defamatory!), and Jane’s context in the Curious post is still relevant: it’s an expensive place to rent, too. This correction seems to be all about Tina Engler’s ego. -
She has not gone on any recent Rodeo Drive shopping trips.
@ataglanceRMC pointed out that Tina Engler said she was looking at houses in the area at the time that she checked in from Rodeo Drive. That said, Jane Litte’s statement wasn’t defamatory, nor was Tina Engler even a party. This correction seems to be all about Tina Engler’s ego. -
The principals of Ellora’s Cave did not receive “no interest” loans.
This was actually not one of Jane’s representations, but something from the Brashear case that Jane cited. Maybe Ellora’s Cave should have fought harder on that docket. -
It has been represented to me that, at the time of the post, most or all authors had been paid within their individual contracts.
Note that this assertion is very carefully worded, quite scathing, and says absolutely nothing about what Jane thinks the truth is, nor what the truth actually is, nor what you should believe. -
Finally, Patty Marks has not said that the company will be entering bankruptcy or that any contracts will be sold in bankruptcy.
…but that says absolutely nothing about whether or not Ellora’s Cave is a going concern.
Instead, what we have are the following:
- A still-on-the-table legal action by author Ann Jacobs—perhaps including other similarly situated authors—with an unknown amount of downside risk. Ann claims that she alone is owed $193,000.
- Some authors have reported that they’ve been paid up through February 2015. Some have stated they’ve received payments covering periods as late as June 2015. So far as I’m aware, apart from the open questions about the royalty rate changes that Ann’s case is predicated on, no one is currently more behind than Feb 2015 or more caught up than June 2015. Under typical publishing-industry contracts, this situation—a publisher leaving authors’ royalties in arrears for many months—would constitute breach of contract. (I am not a lawyer and won’t be giving legal advice. Ellora’s Cave authors should read their contracts carefully and consult an attorney if they have questions or desire remedies.)
Department of Rumor Control
There are a lot of rumors floating around, so I’ll cover a few this time and more later.
Rumor: Ellora’s Cave Won the Lawsuit
(Rumor source: now-deleted facebook post by RT Booklovers Convention; here’s their apology.)
Fact: This rumor is false. The lawsuit was settled, which can be more accurately translated as: both sides lost.
Fact: Also, technically, the case is still not over. The judge noted a settlement had been reached on Oct 22, but there has been no stipulated motion to dismiss, nor has the case been dismissed by the judge. There is still the matter of Ann Jacobs’s motion to intervene, too.
Rumor: Dear Author’s Statement Was “Obviously Court Ordered”
(Rumor source: Emma Paul.)
Fact: When the court issues an order, there’s an item on the docket. There is no such item on the docket. Also, the copy of the order is downloadable by anyone unless it is noted as sealed. None of the judge’s orders are noted as sealed.
As of this writing, there have been no docket items since the judge’s note of the proposed settlement on October 22. When the settlement is final, the case is finally dismissed, and that has not happened yet.
Additionally, EC supporters can probably believe Ellora’s Cave’s lawyer on this (document here):
Finally and most egregiously, Mr. Randazza filed his brief within 10 minutes after local counsel for Defendant and undersigned had spent two days and many hours working toward terms of a tentative settlement agreement.
This was not ordered by the judge. Plaintiffs and Defense approached the judge the following day with a proposed settlement.
Anyone with a PACER account can verify that my copy of the docket matches the court’s record.
If you wish to do so, here are the steps:
- Create a PACER account on www.pacer.gov.
- Log into Ohio Northern District’s case filing system at ecf.ohnd.uscourts.gov.
- When the next page loads, click Query along the top.
- Enter the case number on the query page: 5:14-cv-2331 then click Run Query. (It may want you to verify the case number first.)
- You’ll see the home screen for the case. As you can see, I generally go to the docket report.
- Click Docket Report …
- The next screen will allow you to limit the dates of the entries; if you don’t, it’ll run you thirty cents (last I checked; it may be forty now). Click Run Report.
- You will see this report. I’ve uploaded a PDF copy so that you can see that my Dropbox copy of the docket really is what’s up on the court’s site. Feel free to fact check me.
Here are all the orders by Judge Adams, larger (bolded) and smaller. I’ve linked to my dropbox copies, but you’re free to spend money downloading them yourself.
- Docket item 15: Marginal Entry Order granting Plaintiffs’ 13 Motion to continue.
- Docket item 18: Marginal Entry Order denying the stipulated 16 Motion for Extension of Time to Answer.
- Docket item 21: Case Management Conference Scheduling Order.
- Docket item 22: Memorandum Opinion and Order denying Plaintiff’s 12 Motion to remand to State Court.
- Docket item 24: Marginal Entry Order granting Defendant [Jane Litte’s] Motion to attend the case management conference by telephone. (I didn’t bother downloading this one.)
- Docket item 26: Order rescheduling the case management conference to 1 /26/2015. (I didn’t bother downloading this one.)
- Docket item 30: Order. The Court held a case management conference on 1 /26/15. As Plaintiffs confirmed they do not intend to pursue the motion for temporary restraining order that was pending, Plaintiff’s 5 motion for temporary restraining order is hereby denied.
- Docket item 37: Order and decision denying the non-party’s motion to quash (Doc. # 31 ). This was @pubnt’s motion.
- Docket item 41: Trial Order. Jury Trial set for 3/21/2016 at 09:00 AM in Courtroom 575 before Judge John R. Adams.
- Docket item 57: Order. Defendants have filed various motions, including a Motion for Clarification Regarding Preliminary Discovery, Motion for Leave to Supplement the Record in Support of Defendants’ Motion for Summary Judgment, and Motion for Further Discovery Pursuant to Fed.R.Civ.P. 56(d). The Court will conduct a hearing before Judge John R. Adams on these motions on 10/8/15 at 11:00 AM in Courtroom 575.
- Docket item 67: Order granting the Parties’ Joint Motion to continue the October 8, 2015 hearing on various motions. The Hearing is RESET for 10/22/2015 at 11:00 AM in Courtroom 575 before Judge John R. Adams.
- Docket item 68: Marginal Entry Order granting Plaintiffs’ Motion to redact Exhibit #13 of the opposition. (Doc. # 64 )(Related Doc # 65 ).
And that’s it. There are really only two substantive rulings in this case: denying Ellora’s Cave’s motion to remand the case back to Ohio state court, and the denial of @pubnt’s motion to quash the subpoena to Twitter to discover @pubnt’s identity.
To those spreading this rumor: put a couple of bucks where your mouth is and support accurate information.
Rumor: If I Buy an Ellora’s Cave Book Through Amazon, the Author Will Get Paid [by Amazon]
This is a misunderstanding of how royalties work. In the case where an author is unagented, the process is:
- Amazon pays the publisher.
- The publisher pays the author.
For an agented author:
- Amazon pays the publisher.
- The publisher pays the agent.
- The agent pays the author.
If #2/#3 isn’t happening, it’s not going to happen any more reliably because the customer bought the book through Amazon. However, when there’s a publisher that’s having payment issues, what it does add is a third-party that can be audited and/or subpoenaed.
Rumor: Ellora’s Cave Had a Rogue Employee Who Lied to the RWA
(Source: facebook commenter)
The source of the RWA’s censure against Ellora’s Cave was Patty Marks. (Court docket item 54-1.)
Rumor: Ellora’s Cave Proved Three Authors Were Lying in Court
(Source: Tina Engler)
This is false.
Fact: Nothing Ellora’s Cave submitted about any author was proven to be true in court. There were no rulings about the factual nature of any evidence about any author submitted in the case.
Except, of course, for @pubnt. Somehow, I don’t think that’s what Tina meant, though.
It’s not proven until the judge or jury agrees; please see above for all the judge’s orders. No jury was ever selected as the case didn’t get to the voir dire stage.
Ellora’s Cavemen Anthology Contract
I’ve been given a copy of what claims to be a 2008 Ellora’s Cave Cavemen Anthology Contract. (Note: it may be until sometime Saturday 12/12 before this document syncs)
I don’t know that this contract is specifically the same as any that were signed. I just noticed the following things about this particular document.
- It licenses the work as one of six works included in the anthology. I see no provisions for other numbers (e.g., 72). Therefore, I don’t see how Ellora’s Cave is authorized to publish the 72-work omnibus volumes of Ellora’s Cavemen anthologies without an additional or substantially different contract.
- I see no provision for reversions.
Obviously, if you have questions about your contract or the remedies that may be available to you, then your lawyer is the appropriate person to answer your questions.
I must say, while I am happy that things seem to be coming to an end, it is unfortunate that Dear Author didn’t get a ruling in their favor. A settlement is a loss-loss in so many ways, and that is still upsetting for authors, those who helped fund the actions, and even reading so much about what happened. It’s sad that this happened in the first place, and even worse that so many are still being
Still, I am happy that you have continued to write on this and spread the word.
I think of it kind of as a relay race: one case can carry an issue only so far, and that length is determined by a number of factors including the details of the case and the budgets of the parties involved.
Jane cracked open a lot of things, and while it didn’t go as far as we’d hoped, we still know more than when the case started.
Coming to an end for whom exactly? Not the authors who are still waiting for payment with their works held hostage. Sorry about my bitterness, but I see no end in sight for us.
I wish I felt even a little bit like things are coming to an end. Or maybe it’s just that it feels like the kind of end when water has been dumped over the campfire and all that’s left is soot and mud.
I feel for Nina. I remember when she was hired, and how excited she was. And I commiserate. EC was, to me, the publishing equivalent of The Holy Grail. Only I found it filled w urine. And I, too, have sat back w my mouth shut, hoping that by staying quiet I’d increase the chances of seeing some “reward”, in the form of royalties owed, for my loyalty.
I’m paid through February, 2015. I find it hard to concieve that I’ll see anything more from them. I’d love to be wrong about that… Barring any unforseen complications I hope to have rights reverted for several works by mid-February. Then, perhaps I can put this chapter – the “black moment” of my own author story – behind me and finally take back some joy in writing.
I remember Nina very fondly and greatly appreciate her insight and empathize with the stress of her situation. The idea that an author was laughed at for needing medicine (was this the terminally ill author?) is horrifying.
Nina’s post is heartbreaking–for her, for the other employees who received the same treatment she did, and for the authors. I didn’t always agree with her actions as managing editor, but it was obvious she was trying to improve things and being blocked at every turn. I hope she finds something better.
I’d also like to note that at least one editor claims she still hasn’t been paid, despite Patty and Tina claiming the contrary. I, personally, received a check for the books I finalized, but there were dozens of books I’d worked on–doing one, two or more rounds of edits–and have not been (and will not be) compensated for.
“Under typical publishing-industry contracts, this situation—a publisher leaving authors’ royalties in arrears for many months—would constitute breach of contract. (I am not a lawyer and won’t be giving legal advice. Ellora’s Cave authors should read their contracts carefully and consult an attorney if they have questions or desire remedies.)”
I can address this point with some personal experience.
On two separate occasions, EC has exceeded the three-month time frame for payment of my royalties. I politely and professionally contacted the contract department, requesting reversion of rights based on breach of contract.
I received a civil reply telling me I had misinterpreted the contract I signed, and that breach of that particular clause, or any clause, does not void the contract and revert rights back to the author. I was informed that the only condition for reversion of rights is the clause about unit sales within a specified time period.
I spoke with a lawyer, whom upon reviewing my contracts, confirmed EC’s statement to be correct.
If other authors have received legal advice contrary to what I was told, I would appreciate hearing about it.
As for the current state of my royalty payments… I received a check in August for February 2015 royalties. Nothing since.
One of the Silent Many, thanks.
This comment is in part intended as penance for having advised Deirdre on the wording you quoted, on which occasion I was lazy and didn’t do a good enough job.
It’s very definitely not correct to say (as is sometimes claimed) that any failure to perform, or any lateness to perform, by a party to a contract breaks it irreparably. The issue actually hinges on whether a court judges the failure to perform a material vs. immaterial breach of contract.
Courts look at these factors:
Can the problem be fixed by money/effort? If the whole idea was for you to dress up as Liberace for Christmas dinner, and it says so in the contract, the other guy producing the right coat on New Year’s Eve won’t prevent material breach.
How much has the breaching party already performed? If the contract was for not just Liberace’s coat but also his spangled striped trousers, pointy shoes, and best hat w/peacock feathers, all of which have been produced, then that’s a factor against material breach.
How big a loser is the breaching party? Signs that the breaching party has the means and intention to repair the breach make the breach less material. OTOH, show the court the breaching party is a pauper and a scumbag, and the opposite applies.
Good or bad faith? Convince the court that the breaching party has been violating the implied covenant of good faith and fair dealing (that’s automatically part of every contract), and that makes the breach more material.
Are you, the non-breaching party, ready, willing, and able to perform your side of the deal? The judge isn’t going to judge failure to produce Liberace”s coat a material breach if you, on your side, also aren’t ready to pay the asking price.
What does the contract say? Contracts can, and probably should, say in advance what sorts of failures will be deemed material. Remember the foregoing, the next time you negotiate a contract, and also keep an eye out for any such wording that’s already in contract language written by others. In particular, the most effective way to ensure that delays in performance and payment (beyond contract-specified deadlines) is to include a sentence saying ‘Time is of the essence in this agreement” (a Time is of the essence = TOE clause).
With a TOE clause, any delay is automatically grounds for cancellation if the non-breaching party wishes. Without, it’s up to a judge to weight those seven factors to determine whether the breach was material or not. If stuck in a real-world dispute on one of these matters, you would certainly want to consult a contracts attorney on the particulars.
Rick Moen
rick@linuxmafia.com
(Not an attorney. If I were, I’d have to be your attorney before I could advise on a specific case.)
Emma Paul is one of the STGRB/Weinberg/Rice cabal, so nothing she says can be taken as accurate. Just FYI.
You can’t argue with that kind of stupidity. Time and experience are brutal teachers but they may be only ones that eventually get through to Ms. Emma. Until thing, all I can say is, “Bless Her Heart”.
There is just no educating the stupid.
And there are also those who cannot be wrong–they’ll rather find the most convoluted, outrageous, absurd, alternative explanations to wave away the reality that they may have been wrong.
Either way, the rest of us can make up their own minds about what has happened with this particular lawsuit, and with Ellora’s Cave, and its principals, in general.
I’ve just spoken out on FB about my EC experience. Frankly, I didn’t want to speak in public until I had the rights to my books safely back in my sweaty little paws. I think that now so many EC authors are speaking up it can’t help but show the world the truth. Our words are honest and rational. Calling us vile names is irrational and ridiculous.
Given the assertions about failing to release books where authors have spoken out, I don’t blame you in the least for waiting until you had your rights back.
For those who haven’t read Jane’s piece about her experience, you can find it here.
If you have time, could you expand on #12 Docket item 68?
Thanks for asking, Sandy.
In general, attorneys try to protect identities of non-related parties in cases like this. Ellora’s Cave had submitted an exhibit that outed one party (in exhibit 13 of document 64—note that link has the updated document), and then submitted a request to redact that exhibit (link here), which was granted.
This is not an unusual issue, and both sides made oopses with information they should redact.
Would love to have someone take Jane’s “edits” (I gotta love her style!!) and fit them in to the original article so people who are challenged in the area of reading comprehension can see:
1. Jane’s statements still are relevant (if slightly amended to account for TE’s “but I said so and my truth is a bigger than anyone else’s” and
2. How much of the original article stands – unedited.
For extra credit – linking to articles and blog posts from authors, former employees and industry leaders who can confirm the true of what Jane reported.
Just a thought. 🙂
I assume you’ve seen Frances Stockton post on her experience with Ellora’s Cave–and Jaid Black’s “I barely mention my troubles in social media, but, oh, those mean girls, and woe is me, and I’m not Tinut, and my poor family, and my anxiety, and oh my mother’s health, and everything was peachy keen, except for those mean girls ‘bullying’ me.”
If I hadn’t seen her showing her behind in public for almost a full decade now, I would think we were being trolled.
You mean, I married a mean girl? For realz? My sweetie is a Tina Fey character?
Cool, when do I get to hear about the fights over IM, fake apologies, the out-of-town parent opportunities, and the Jello-shots? The Queen Bees, Sidekicks, Bankers, Floaters, Torn Bystanders, Pleasers/Wannabes/Messengers, and Targets?
I always saw myself more as Christian Slater in ‘Heathers’, except without the homicidal bits. (Où sont les Daniel Waters d’antan, anyway? Nothing good since Demolition Man. C’est domage.)
Meanwhile, I’m dazzled by Ms. Black now on saying on Frances Stockton’s blog ‘I am terribly sorry we got behind, even if I feel it was through no fault of our own.’ And, as she elaborates, it’s because Amazon sales fell and because of a cascade of rights-reversion requests.
Say what? Let’s go through this slowly. Exampleco (publisher) offer e-books through outlets that include Amazon, offering among others the works of J. Random Author under a 40% royalties contract. Periodically, Amazon report a spreadsheet of sales back to Exampleco, and deposit matching funds. On one such spreadsheet (say), the row for J. Random Author lists $100 revenues (net of Amazon’s cut) payable back to Exampleco. Exampleco’s share of that $100 is $60, J. Random Author’s is $40.
Exampleco set aside that $40, because it’s not theirs. This really isn’t difficult to understand. If at any time, on account of business troubles, the publishers become unable to pay J. Random Author that already-owed $40 (and all the other already-earned and in-hand royalties owed to other authors), they need to shut down immediately, or they will be misappropriating other people’s funds: J. Random Author is not a bank, and Exampleco are not a charity.
Let’s say Exampleco suffer a dramatic falloff in Amazon sales, and around the same time many authors seek to cut off business relations and revert their publishing rights. OK, that’s indeed bad news for Exampleco, but how could that possibly prevent their paying back J. Random Author his or her $40? Those two misfortunes merely reduce future sales, and has no effect whatsoever on past, already-collected, in-hand royalties. Unless Exampleco are wrongfully spending other people’s money and then having a difficult time replacing it, they can always hand J. Random that $40, because it’s right in the bank were Exampleco parked the funds when Amazon tendered the money.
I can think of three reasons for Exampleco getting this wrong: One is completely failing to understand the basis of one’s own business, specifically the ‘collected royalties are not our money’. The second is such utter failure to manage company finances that one isn’t even aware of falling back on other people’s money without permission. The third is running a deliberate Ponzi scheme. IMO, all of these are pretty damning.
Maybe there’s a fourth possibility, but it’s not coming readily to mind.
I’m talking only about strictly imaginary publisher Exampleco, in part because I sure wouldn’t want to accuse an actual publishing firm of funding itself using other people’s money without permission, but I’d sure like to know whether Ms. Black means exactly that, in her point #5, where she concludes ‘we felt we were left with no choice’, or whether she means something else entirely.
Rick Moen
rick@linuxmafia.com
This is a brilliant breakdown.
Dotti wrote:
Why, thank you.
I forgot to mention, when I pointed out (downthread) the ‘two very characteristic tricks’ I used to discuss an incendiary topic, my third quirk: When confronting a baroque and abstract argument, like Ms. Black’s weirdly meandering semi-explanation of ‘getting behind… through no fault of our own’ supposedly because of falling Amazon sales and increasing rights-reversion requests, I find it very useful to try it out on a very specific, concrete example.
Seems to me, when one applies Ms. Black’s (seeming) line of argument to Exampleco and J. Random Author’s $40…, that dog just doesn’t hunt.
The late Richard Feynman wrote in his books that he always approached problems that way, and I’m certainly no Feynman but have done my best to learn from the master.
Rick Moen
rick@linuxmafia.com
The only explanation that I can come up that meets all known facts is that overhead expenses were too high and when there was a sudden downshift in revenue they couldn’t meet their fixed costs on their portion of incoming royalties. That’s a shame and a sure sign that changes need to be made but those changes can’t be financed by the percentage of the royalties owed to the content providers. Unless you want to run your business like a man attempting to outrun an avalanche. Both will have the same results. Buried under a mountain of useless regrets.
That seems the most likely explanation to me, but what this says to me is that they didn’t have early signaling in place to determine when they were overspending. Because if that scenario is what happened, I can’t see any explanation other than this: Ellora’s Cave appears to have been overspending even when it was flush.
The hardest kind of business scenario to deal with is an extremely bad period after an extremely good period, and 2011-2012 sounded like really great years for EC income-wise. That’s about the time period where Cait Miller says things started changing for her, though.
“Ellora’s Cave appears to have been overspending even when it was flush.”
Ding, ding, ding!
As you know, I worked for the biggest electronic design automation (EDA) firm, Cadence Design Systems, in the 2000s, and they did deep cuts including me and what soon was my entire department, starting just about a month before the 2008 financial crisis. (Whoever their forecasters are, they’re world-class.)
The EDA industry, it turns out, is accustomed to business cycles even more severe than those characterising the rest of the software field, so my guess at the time is they take care to always distinguish the ‘mayfly’ employees, divisions, and projects from the ‘must keep’ ones retained during downturns. (I say this in part because the deep cuts were very smoothly, and also humanely, executed.)
But that aside, about the very first thing you learn when you study business economics, a truth so simple even your average MBA can grasp it, is: Fived costs are fixed, variable costs are variable. (To be pedantic as only someone who passed the CPA examination can, what Julaine calls overhead is almost always part fixed and part variable — where the variable portion is the portion rising and falling proportional to business activity. ‘Overhead’ as a general category is all indirect expenses not properly allocable to the business’s goods or services.)
If a business owner cannot figure out that high fixed costs will kill your business, he or she really ought to switch to goat herding, or something along those lines, because ‘We lose money on every sale but make it up in volume’ was neither sensible nor all that funny, even back in Vaudeville days.
Nonetheless, your speculation that maybe the firm just didn’t have monitoring in place to catch overspending is all too plausible. That would mean management failed their first duty, but it happens.
And when a firm seems entirely too keen to avoid any auditing and reporting, one has to wonder.
Rick Moen
rick@linuxmafia.com
I cracked Rick up by saying to him, “Even goat herding has fixed costs.”
That’s the only scenario that makes any sense to me, for exactly the reasons Rick laid out. Assuming 3rd party vendors pay accurately and on time (which Amazon does), royalties are always fully funded since they do not belong to the publisher in the first place. They were always the authors’ money and should never have been co-mingled with corporate funds in the first place. Currently falling sales have NO impact on past royalty payments since that money has already been collected.
A company is not a checkbook.
tejas wrote:
/me bows.
One of these days, I intend to finally get around to writing an essay on my Web site entitled ‘How to safely write about incendiary topics’. For now, please notice that I used two very characteristic tricks, upthread:
Rule 1. When approaching a hot area and/or the interests of a litigious party, don’t even think of stating that that party has committed a tort (or crime). Just don’t.
Rule 2. If tempted to discuss a legal scenario, resist the temptation to discuss real people/companies, and instead use a hypothetical example. It’s safer, and you can make a valid general point, without needing to be fully briefed and factually accurate about real-world firms and people.
Exampleco and J. Random Author were inventions dictated by Rule 2. In case you were wondering.
I thought about Rule 1 when I read a recent assertion by Courtney Milan that Our Favourite Ohio Company has been in breach [of contract], which constituted asserting a tort. I wouldn’t do that. Deirdre says that Our Favourite Majority Shareholder has conceded breach in writing, which would make the claim of fact Courtney tweeted safe (against libel litigation), but I’d still be extremely careful about such things.
Back in the 1980s, I was Secretary and then later Chair of Bay Area Skeptics at a time when there was an organised campaign of nuisance tort litigation to take down local skeptic organisations. I made a point of advising skeptics about how to skirt around even the possibility of other people having a cause of action to sue them over their comments, and how to ensure that they risked being a target only deliberately, and risked only themselves and not other people and groups.
I even fleshed out one or two pieces about libel, but haven’t yet expanded those into full articles.
Rick Moen
rick@linuxmafia.com
What was a huge red flag for me years ago was reading about unusual expenditures in the Brashears lawsuit. When a company is paying the majority owner approximately 2.5 times the prevailing market rate for rent through another privately owned entity? Yeah, I am having a hard time coming up for the rational behind that one. I can think of a lot of reasons why someone would do that but I am having a hard time coming up with a good reason.
That was the claim in the suit, anyway, a claim that apparently wasn’t adequately refuted in the filings (hence, how it got caught up in the Dear Author case).
Yeah, I should have added a supposedly to my statement in regards to the Brashears claims. However, they are rather oddly specific figures to have no basis and the figures ( and the expert witness) do not appear to have been disputed at the time they were entered into that case. Nor is quoting from a legal record and citing your source defamatory.
It is sort of like EC claiming that the statement in Dear Author about Tina buying a house in the Los Angeles area was deframatory when a similar statement by another journalist was not, simply because the previous journalist wrote an article that the principals of EC considered favorable.
“It has been represented to me that, at the time of the post, all or most authors had been paid within their individual contracts.”
sigh
At various points in the past it has been represented to me that the moon landings were faked, that Elvis is alive and living in a trailer park in Zephyrhills, Florida and that Santa Claus was real. All of these statements are factually inaccurate but they HAVE been represented to me.
Call me cynical but..
Lawyers are really clever wordsmiths, aren’t they? Must be why so many of them turn out to be such excellent writers.
At various points in the past it has been represented to me that the moon landings were faked, that Elvis is alive and living in a trailer park in Zephyrhills, Florida and that Santa Claus was real. All of these statements are factually inaccurate but they HAVE been represented to me.
Exactly.
Julaine wrote:
Nicely put!
When I read Ms. Litte’s finely turned bit of lawyerly snark (‘It has been represented to me that…’), I actually did belly-laugh, and I’m pretty sure Deirdre did, too. At the same time, a voice in the back of my head said ‘Most of the Internet commentariat isn’t going to “get” this, which is a shame.’
It’s lovely that you did, though.
The fact that the original article IS STILL POSTED on Dear Author says it all to me. And yes, that paltry “correction” is almost the opposite of an apology.
Exactly!
Granted, I think it takes some intelligence and education to see through the phrasing, but I don’t think it requires MENSA-level smarts or a law degree, you know?