[fjtorres]

Originally Posted by Apache

The only way I know of to get out of financial obligations is to declare bankruptcy and I can not see Disney doing that. Back when Zales Jewelers declared bankruptcy in 1992 they had millions of dollars in goods on memo from a company called Town and Country. Memo goods you do not own they are loaned to you with the understanding that when you sell something you pay for it. The company can ask for the goods to be returned at any time. The judge presiding over the bankruptcy decided that Zales did not have to pay for or return the goods that they still held. Zales to this day brags about how they emerged from bankruptcy a stronger company. Town and Country went out of business.
Apache

Quite common, actually.

In bankruptcies the court sees two classes of claims: secured and unsecured. Secured claims get paid as best as possible and the unsecured get paid if anything is left over. And any valuables in control of the company at the moment of bankruptcy are considered assets. That includes products on consignment. All is at the discretion of the bankruptcy court.

As it turns out, in publishing books are considered assets and authors unsecured creditors. That leads to things like the Nightshade/Skyhorse mess of a few years back where authors were forced to take lower royalties so Skyhorse could buy out Nightshade or see Nighshade go into bankptcy court and get nothing for years, possibly forever.

http://www.michaelastackpole.com/?p=3288

It's not just consumers who need to beware who they do business with.