SoA urges Freight liquidator to revert authors' rights

The Society of Authors has urged the provisional liquidator in control of Freight Books to revert the rights of its authors, arguing that the publisher is in breach of contract. But Ian Wright, m.d. of WRI Associates, has said the company is not yet in liquidation and contracts have not yet been terminated.

Wright was appointed provisional liquidator of Freight Books, the imprint founded by Davinder Samrai and Adrian Searle in 2011, last month, following a court order brought by Glasgow based printers Bell and Bain over unpaid work dating back to the beginning of the year. Operations at the publisher were thrown into disarray when Searle left the company abruptly in April. Since then a number of authors and suppliers have been owed money.

Wright confirmed to The Bookseller that all six employee contracts at parent company Freight Design had been terminated and that he is currently in talks with potential buyers for the publisher's portfolio. He added that the status of author contracts has "yet to be clarified".

In a letter seen by The Bookseller, Kate Pool, deputy chief executive of the Society of Authors, urged Wright, to “not attempt to sell any stock or attempt to assign or license any rights under the agreements without the author’s consent as this would be an infringement of their rights in relation to which they would be entitled to apply for redress against the provisional liquidator including an injunction, damages and legal costs.”

However, Wright has said that as he is the provisional liquidator and the company has not been ordered to wind-up, it is not yet in liquidation and contracts have not been terminated. “The company has not been wound up and is therefore not yet in liquidation", responded Wright. "I therefore do not consider that conditions referred to in Clause 22 of the company’s standard contract have been met and therefore contracts on these terms have not been terminated.”

The SoA, however, argue the provisional liquidation serves as full liquidation, and that Freight books is in breach of contract, meaning authors should be permitted to have their rights returned. In a seperate letter, Pool said: "We do not accept your view that the termination clause (clause 22) has not come into play. First, it is arguable that having a Provisional Liquidator appointed means that the company is in liquidation. Second, the clause also applies if a receiver or administrator is appointed and it is highly arguable that a Provisional Liquidator would be considered a receiver under English Law which is the governing law of many of the contracts we have seen (and we imagine is the case under Scottish law also)."

She added: "... Many if not most of the authors are entitled to terminate for breach. We will advise those authors who have contacted us, where relevant, to send letters outlining the breach and giving notice."

Wright told The Bookseller: “In relation to authors, there are some who are owed money. Their rights have not automatically reverted by virtue of my appointment. The standard contract issued by the company refers to rights reverting when the company goes into liquidation. That hasn’t happened yet, and won’t happen until the court grants a Winding-Up Order. It’s a technical point, and a number of authors seem to be confused by the situation, which is understandable. Unfortunately many have received advice from parties who are not properly qualified to provide accurate advice.”

Freight author Alan Murray told The Bookseller that the best authors have to look forward to after the liquidation of the company are the "crumbs from the table". He said: “I wrote to the receiver earlier this week. [On Wednesday] I received a pro-forma reply - basically it urged patience. Ah, so many pleas for patience over the past year. So many disappointments. Whatever eventuates, the receiver will be the first to be paid for services rendered. Then the suppliers and, when the swamp is close to be drained, the authors will, with luck, get the crumbs from the table.”

J David Simon, a fellow author, said that the liquidator needs to be given time to fully assess the situation and could be seen as a "useful ally".

“I appreciate that this puts authors in limbo at the moment, but I just think that this provisional liquidator needs to be given a little more time to assess the situation and then communicate his intentions to the authors. Until then, I don't think he should be perceived as the enemy – he may even come up with some potential offers from interested buyers, so he could be a useful ally,” he said.