[fjtorres]

Originally Posted by j.p.s

Looks like authors' contracts with publishers need a clause that copyright reverts to author upon royalty payment default and probably another that the copyright can not be transferred to anyone but the author.

Only if executed *before* bankruptcy.
Once the bankruptcy court takes over any such clause is void.
The copyrights become corporate *assets* to be sold to pay off creditors; secured debtors first and then if anything is left, the unsecured debtors. The contracts go to whoever buys them, even for pennies on the dollar.

(Other contracts--leases, labor deals, etc--can be downgraded or voided at the court's discretion.)

That is what authors caught in the Nightshade mess faced: agree to reduced royalties so Skyhorse would buy the contracts without bankruptcy or wait (years?) for bankruptcy to settle where the copyrights were going.

There's a reason why publishing contracts are referred to as "sales" by authors and publishers. Authors assign control of the copyright for the duration of tbe contract, most often these days is the life of the copyright. if you look at the copyrights of older, pre-80's books, odds are many have been handed down publisher to publisher to publisher as the industry has consolidated from hundreds of publishers to a few dozen big and medium houses.

Here's some TLDR about the Medallion case.
(snark included)

https://www.thepassivevoice.com/meda...-7-bankruptcy/

Absent such provisions, the publishing agreements between Medallion and its authors are assets that the bankruptcy trustee will try to sell for the best price possible to whoever will pay that price. Any claims for unpaid royalties owed to authors will likely be rolled into the pile of unpaid debts of Medallion and cash resulting from sales of assets will be divided among the printer, the utility companies, UPS, the bookstores that have returned Medallion books for a refund and not been paid, etc., etc., etc., and the authors.

The bankruptcy court determines what happens under the contracts that are held by the individual or company filing for relief under US bankruptcy law. As stated above, generally speaking, under Chapter 7, the bankruptcy trustee tries to sell the assets owned by the person or company filing for bankruptcy relief to whoever offers to pay the highest price.

The new publisher might be Random House or it might be Kevin the Krusher, New Jersey junkyard magnate, who buys the publishing contracts as a gift for his spoiled son, Digby, who has always wanted to be a member of the literary set.

If the Medallion publishing agreements include the most unfortunate, but quite common provision by which the author granted Medallion the right to publish his/her books for the full term of the copyright the author owns for the book (typically, the rest of the author’s life plus 70 years in the US), each of the Medallion authors can look forward to receiving royalty statements (or not) from Digby every once in awhile accompanied by royalty checks (or not).

After Digby retires, Digby, Jr., may become the publisher followed by Digby III (or not).

Or, if the circle of life applies to publishing contracts, perhaps Digby will burn through all his father’s money and file a petition for relief under Chapter 7 of the Bankruptcy Code.

This has happened before and it will happen again.