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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. Would seem simpler to just start a subsiduary offering lower rates and recomending it to authors that they did not feel they wanted to keep.
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They want a high royalty rate in the contract to convince authors to sign.
They want to pay the authors as little as possible, because they increase their own profits that way.
They want to do this through as many layers of obfuscation as possible to keep those authors signing with them, and make any action against Harlequin difficult.
Whether their method of filtering the royalties paid to authors was legal, is something for the court to decide.
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Also if I am reading the article and comments correctly, the whole thing smacks of collusion and fraud. Cannot charges be made on these grounds that would make a civil suit easier to settle?
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It's not quite "collusion" if a company makes a subsidiary for the sole purpose of skimming profits away from other interested parties, in this case, authors. And I think "fraud" is assumed in the lawsuit but may not be part of the specific charges filed. "Fraud" may be the catchall when you don't have more specific claims.