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Originally Posted by speakingtohe
I do not understand why harlequin would offer a reasonable (better than many?) royalty and then go to such lengths to get some of it back.
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They didn't.
All they did was follow the contracts.
The digital rights were held with a wholly owned subsidiary, and it resulted in very low royalties. This was presumably one reason why Harlequin decided in 2011 to offer a blanket 15% royalty rate on ebooks, including older ones.
Odds are also pretty good that they were using the foreign subsidiary for tax reasons and/or to better handle international rights. Unlike most publishers, Harlequin operates internationally, so when you sign with them that includes all international rights. (Note: They're a Canadian company, not US.)
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Originally Posted by speakingtohe
Also if I am reading the article and comments correctly, the whole thing smacks of collusion and fraud.
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You're mostly reading what the plaintiff's lawyers want you to read.
It's unclear at the moment who should have been paid what, let alone how many authors are genuinely affected and to what extent. (Again, I expect it's relatively small amounts.)
There is no "collusion," because they were working with a subsidiary (and that's perfectly legal). There is no "fraud," because it was all in the contracts.