May 2, 2019
If you have a book contract with F&W publishers, you may be aware that they have filed for Chapter 11 bankruptcy. Bankruptcy courts allow creditors to file a “proof of claim” to establish what is owed to them by the party in bankruptcy. When a publisher goes bankrupt, the authors owed unpaid royalties are considered its creditors. If you are an F&W author, we encourage you to file a “proof of claim” and record the amount you haven’t been paid with the court. The form can be downloaded here. The following memo, prepared by the Authors Guild and the Association of Authors’ Representatives (AAR), provides guidance on completing its requirements.
To help you navigate and complete the form, we have prepared an item-by-item breakdown.
If you do nothing, then you may not get paid your missed royalties.
Box 1: Who is the current creditor?
Authors are the creditor for purposes of this form. The creditor will enter its name here.
Box 2: Has this claim been acquired from someone else?
Most authors will check NO for this item as their claims will be based on their contracts with F&W. However, if the claim is based on a contract assigned by will (or any other way), then claimant will check YES and enter the name of the party who assigned the contract after “From Whom?”
Box 3: Where should notices and payments to the creditor be sent?
The author/creditor will enter its address.
Box 4: Does this claim amend one already filed?
Most authors will check NO unless they have previously filed a claim with respect to F&W’s bankruptcy.
Box 5: Do you know if anyone else has filed a proof of claim for this claim?
Most authors will check NO unless their agents or co-authors have already filled out a claim.
Box 6: Do you have any number you use to identify the debtor?
This question asks creditors to provide any unique identifiers used by them (such as an account number). Large creditors assign unique identifiers to track their accounts. Most authors will check NO.
Box 7: How much is the claim?
If the author has received statements indicating the amount owed but did not receive payments then all unpaid amounts should be added and the total entered here. If the author did not receive statements or received partial statements then they will provide an estimate based on previous statements, taking into account the number of units they believe the publisher has sold during the incomplete accounting periods and licensing income from subsidiary rights. Any outstanding advance payments should also be claimed in this item.
Box 8: What is the basis of the claim?
Authors may enter a description such as, “Royalty payments due under publishing agreements,” and include any other info to provide context for their claim.
Box 9: Is all or part of the claim secured?
A secured claim is one where the creditor (you) owns some collateral from the debtor (publisher). A mortgagee, for instance, would be a secured creditor. This does not apply to publishing contracts. Most authors will check NO.
Box 10: Is this claim based on a lease?
A publishing contract is not a lease, so the answer will be NO.
Box 11: Is this claim subject to a right of setoff?
A right of set is the reciprocal right of the debtor to apply any amounts owed by the creditor to its debt. This does not occur in publishing transactions, so most authors will check NO.
Box 12: Is all or part of the claim entitled to priority under 11 U.S.C. § 507(a)?
Since claims arising under a publishing contract do not fall in any of the categories listed in this item, most authors will check NO.
Part 3: This is a statement that the basis of the claims is true. If you are filling out the form yourself, then you will select the first option (“I am the creditor”) and enter the required information; otherwise, your agent, attorney, or another party legally authorized to submit the form will complete this part.
Note: F&W filed under Chapter 11 for a reorganization—which means they are not planning to go out of business, but to sell some assets and get creditor relief. We understand that the only recovery any author would get in the bankruptcy is for royalties presently owed.
To send the form:
F+W’s bankruptcy is pending before the United States Bankruptcy Court District of Delaware. The Court’s website also provides an electronic method for filing the form. If you have not yet completed the paper form, you may choose to file it online here: https://www.deb.uscourts.gov/claims-information (click on the link “File a Proof of Claim”).
If you wish to send a paper form, you can submit it to:
United States Bankruptcy CourtAttn: Claims 824 Market Street, 3rd FloorWilmington, DE 19801
If you need to reference the case number anywhere, it is Case 19-10479-KG. For more information, please contact the clerk of court at (302)252-2900.
The information contained in this email is for informational purposes only and should not be taken for legal advice. If you have further questions, we encourage you to contact your attorney.
If you are an Authors Guild member and have further questions, you can send in a query to the Authors Guild legal team.