Quote:
Originally Posted by howyoudoin
Assume I am a publishing company named Pimon and Pooster. I am a division of a company named SBC Corporation.
The contract my authors sign stating that they get paid when I sell their books is with SBC Corporation (contract A). SBC Corporation then sells the book to Pimon and Pooster, thus enabling me to pay my authors the lower fee for sales.
.
|
Quote:
Originally Posted by howyoudoin
This sort of thing happens all the time.
My first job was at a Medical Clinic.
However my contract on joining there was with "XYZ petroleum company", who were my employers on paper, and who would be paying me. This seemed strange to me, but apparently XYZ Petroleum company owned the chain of clinic I was joining.
Of course, an easy way to discount the relevance of this tactic to the case at hand would be confirmation by the authors that were indeed contracted directly to Simon and Schuster, and that S&S had directly the agency contract with Amazon and the leasor-leasee relationship with the end-consumer, thus putting S&S on shaky ground.
|
This particular trick is exactly what Harlequin did to a lot of their authors: they set up a wholly owned subsidiary to buy manuscripts that it then licensed (dirt cheap) to its parent company so they didn't pay royalties on the sale price but on the artificially low license payout. The practice is called self-dealing and is usually but not always illegal.