Monday, December 08, 2008

Tribune Company Bankruptcy

One of the core defendants of the freelancers' settlement case, the Tribune Company (LA Times, Chicago Tribune, et al.), has filed for bankruptcy. In the current economic climate, others may follow. What does this mean for us?

Experts (and I am not one, and this is not legal advice) tell me that freelancers are "creditors." In bankruptcy, first the equity is wiped out; then the creditors are lined up, senior to junior. Writers would be general unsecured creditors, more or less at the bottom of the ladder (as opposed to various secured creditors, such as banks).

Interesting related point: Any database company looking for indemnity from Tribune properties also becomes an unsecured creditor.

9 Comments:

Anonymous moxie said...

Irv, I'm wondering if you know how payment of the settlement was divided among the defendants & if any one defendant was liable for more than one million? Seems like it would be divided among many, so each one's share wouldn't come close to that.

Yes, Tribune is a big player in this, but the list of defendants also includes Reed Elseview (Lexus-Nexus), Washington Post, Wall Street Journal, etc., etc. Unless all of these also go bankrupt, there should still be money there ... for the lawyers.

7:04 PM  
Blogger Irv Muchnick said...

I do not know what players in the publishing community, and in what amounts, are contributing to the $18 million fund for what I think is now a dead settlement. I only know the obvious: that such "syndication" of the damages would have been both unprecedented and absurd. The absurdity was underscored by the last-minute amendment in 2005 to grandfather into the settlement two additional infringers, Amazon and HighBeam, without increasing the settlement fund by even one cent.

Irv

6:10 AM  
Anonymous Moxie said...

Our case is now on the docket for the Dec. 12 conference, which I believe is the last one before the holiday break.

I did a little random checking of other recent cert petitions & could find no other case with this many rescheduled conferences. Again I say: If the Justices were of a mind to deny cert, they would have done so by now, without the repeated rescheduling.

Also, Irv, can your lawyer check to see if at the time the settlement was approved at the district court level, the defendants were required to pay their share of the award (presumably now in escrow)? This should be a matter of public record & it an essential point to any future action.

Finally: If this is a dead settlement, it is because you & the other dissenters killed it yourselves in 2005. If you had opted out or exercised the takedown, the "license by default" would not have applied to you.
(And anything written after 2001 wasn't included, anyway.) Yes, I know that you have expressed concern about writers who might be excluded because they didn't know about the settlement. But in your misguided effort to protect them, you have caused severe harm to thousands of us who were happy with the settlement & with whatever payment we were able to get from it, and spent considerable time filing the claims paperwork. The money from my 650 stories would not have bought me a boat (referencing one of your sarcastic comments in a past post). But it would have paid this winter's heating bill.

One more thing: The royalty system works with music and movies because these have longterm market value (people want to hear/see them for decades). A freelance story (especially in the areas of technology) has little value even a year after publication. If you want a royalty structure, build it into the freelance agreements you are signing now. Otherwise, let the rest of us be paid & leave us the heck alone.

6:58 AM  
Blogger Irv Muchnick said...

Unfortunately, Moxie in the comment above repeats the old canard about the objections. That he or she does so with a little more nuance than others doesn't make it less of a canard.

The license-by-default would have given away everything to publishers in perpetuity. Everything. Even if you never heard of the settlement. Even if you were sick or dead. Even if you didn't speak English or didn't master small-type legalese or didn't tune out after reading that claims could be as low as $5. And no matter whether you'd written a 50-word time-sensitive technology short or a 5,000-word profile that was destined to be reused profitably for decades or centuries to come.

It's all well and good that this commenter thinks his own works have little or no long-term reuse value. But the settlement didn't make any such distinctions. It just gave away the whole game to the same publishers that were on the hook for some scores or hundreds of million dollars of infringements. The argument that the objectors, so assessing the landscape -- rather than just their personal portfolio of claims -- had a principled choice to "opt out or exercise the takedown," and leave everyone else "the heck alone," is a no-sale.

I will see what I can find out about the possibility that some or all of the settlement fund is being held in escrow.

Irv

7:22 AM  
Anonymous Moxie said...

Quoting you, about the license by default applying:
"no matter whether you'd written a 50-word time-sensitive technology short or a 5,000-word profile that was destined to be reused profitably for decades or centuries to come."

Irv, the settlement did indeed allow the class members to make that distinction. That's what the "takedown" was all about.

Again, it is not the duty (or right) of one class member to work on behalf of those who did not join the class (for whatever reason), to the detriment of those who did.

7:46 AM  
Blogger Irv Muchnick said...

Sorry, Moxie, but it is indeed the duty of the named plaintiffs and their attorneys, who purport to represent a class, to do so adequately. When subclasses of the class have fundamentally different interests, the court can rule that they require separate representation. That was one of the key objections all along. Moreover, now that we're at the Supreme Court, we have noted that courts historically look at things like adequacy of representation before they even get to the jurisdiction question that spontaneously exercised two of the three judges on the Second Circuit panel.

Moxie, you've got the class action process backwards. The burden is on the class reps to design a structure that works across the board. (I recognize that no structure is perfect, but criticizing the one-size-fits-all license-by-default hardly constitutes nitpicking.) The burden is not on the tens or hundreds of thousands of absent class members to review the fine print of the notice to figure out whether, by defaulting, they'll actually have rights taken away from them.

Try again.

Irv

8:06 AM  
Anonymous Anonymous said...

Dear Moxie,

I want to thank you from the bottom of my heart for your comments. I've seen others try to explain to Irv the damage that he and the other objectors have caused, but no one has distilled the facts down so succinctly. Unfortunately, like an evangelical defending his positions on social issues, Irv does not have the capacity to see the other side of this.

"Finally: If this is a dead settlement, it is because you & the other dissenters killed it yourselves in 2005. If you had opted out or exercised the takedown, the "license by default" would not have applied to you.
(And anything written after 2001 wasn't included, anyway.) Yes, I know that you have expressed concern about writers who might be excluded because they didn't know about the settlement. But in your misguided effort to protect them, you have caused severe harm to thousands of us who were happy with the settlement & with whatever payment we were able to get from it, and spent considerable time filing the claims paperwork. The money from my 650 stories would not have bought me a boat (referencing one of your sarcastic comments in a past post). But it would have paid this winter's heating bill.

One more thing: The royalty system works with music and movies because these have longterm market value (people want to hear/see them for decades). A freelance story (especially in the areas of technology) has little value even a year after publication. If you want a royalty structure, build it into the freelance agreements you are signing now. Otherwise, let the rest of us be paid & leave us the heck alone."

Moxie, I felt I had to include your quotes in this response because they are so on point. At one time I had a newspaper syndication and over a period of time submitted thousands of items to eight newspapers. Eventually the newspapers were bought up by bigger chains and no longer needed my services. Now the newspaper industry is complete dead. The firings are rampant and they are not hiring.

As Moxie eloquently stated, anything that was submitted after 2001 was not included in the settlement. If Irv is so concerned about future rights, all he has to do is negotiate for them when he agrees to provide the freelance work. Irv can not get it into his head that a royalty system is impractical because as Moxie put it "there is no longterm value." Irv, you may have an over valued opinion of your own work, but believe me 99.9 percent of freelancers live in the reality-based world and understand that the final settlement was a very good deal and in our best interest.
I personally submitted more than 8,000 works for the time period involved. What am I supposed to do, go back and register every one of them? Even if I had the time to do so, where would I get proof of publication? The smaller newspapers do not keep microfiche for that extended period of time. Believe me, I've gone to the library and to the newspapers themselves and they do not have them. I only kept a handful of the works myself.

Unfortunately for the rest of us, Irv seems to be a totally ego driven individual who feels it's more important to get his face or name in front of the public than to try and understand the concerns of his colleagues.

Moxie, please continue responding to these blogs. It's the only thing that keeps me sane.

8:28 AM  
Blogger Irv Muchnick said...

This comment has been removed by the author.

8:55 AM  
Blogger Irv Muchnick said...

I do agree that the objectors -- especially in our willingness to persist through appeals -- have killed the settlement.

(I deleted the previous post because I had a typo in the language above, and couldn't figure out how to edit it.)

8:57 AM  

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