.jpg)
royalties
If the debtor has the right on the petition date to receive $,
no matter how contingent, the right belongs to the estate. Where
the question is unclear is the right to receive royalties for stuff
created post-petition. I'm not sure that can be sold (assigned) per
Section 365. The right to receive royalties for something not yet
written sounds like a simple executory contract which possibly
cannot be assigned. The right to royalties for something created
pre-petition is something the trustee will definitely sell if
someone will write him a check for a big enough number to meet his
threshold for administering an estate. Jon
> thanks for the clarification. maybe the way i said it caused
confusion because i do
> understand the difference.
>
> Patricia Depew wrote:
> Vicki, I am merely pointing out the structure of royalties as
there seems to be some confusion. I have not researched the issue
as to post petition royalties in this context.
> -----Original Message-----
> Sent: Tuesday, July 06, 2004 8:16 AM
> To: cdcbaa@yahoogroups.com
> Subject: RE: [cdcbaa] royalties
>
>
> patricia,
> if i'm understanding you right, you're saying because the sales
would be post-petition, the royualties generated from those works
would not belong to the estate and the trustee would have no right
to them?
> thanks, vicki
>
> Patricia Depew wrote:
> I think there may be a confusion as to royalties and advances.
Royalties are residual payments. A royality is a contractually set
percentage of profit derived from sales of a product tht is paid to
the contracting party for the life of the sales of the product. In
short, the work on the product is complete and the product has been
distributed and sold. So, the contract would be pre petition, the
work would have been completed pre petition and the sales that
generate the royalties are post petition.
>
>
> Sent: Saturday, July 03, 2004 4:50 PM
> To: cdcbaa@yahoogroups.com
> Subject: RE: [cdcbaa] royalties
>
>
> Why focus on the issue of whether the contingent obligation is, or
is not dischargeable? The client intends to perform UNLESS the
trustee intervenes and asserts an interest. By the way, it is
virtually certain that the obligation would be discharged even
though it is contingent. Sorry, but I do not understand your last
question.
>
>
> David A. Tilem
> Certified Bankruptcy Specialist*
> Law Offices of David A. Tilem
> 500 N. Brand Blvd., #460, Glendale, CA 91203
> Tel: 818-507-6000 Fax: 818-507-6800
>
> * Personal & small business bankruptcy specialist cert. by State
Bar of CA Bd of Legal Specialization.
> Business bankruptcy specialist cert. by Amer. Bd. of
Certification
>
>
>
>
> -----Original Message-----
> Sent: Wednesday, June 30, 2004 9:49 PM
> To: cdcbaa@yahoogroups.com
> Subject: RE: [cdcbaa] royalties
>
>
> david,
> the bulk of the work would be done post petition filing. since
the contingent obligation to repay the advance doens't arise until
and unless the debtor doesn't fulfill the contract(s), is it
appropriate to discharge the potential obligation?
> if he doesn't, because he will likely illustrate future books
w/the same publishing houses, would it be considered a fraud to not
discharge?
> thanks a lot, vicki
>
> "David A. Tilem" wrote:
>
>
The post was migrated from Yahoo.
charset="windows-1251"
Vicki,
I have not had royalties to contend with yet. However, any trustee that
is paying attention is going to want to sell the royalty rights if there
is a market for them. This will give the future royalty rights to
whoever purchases the rights. The issue will be their market value.
With a history of producing good royalties and continuing popularity of
the illustrator, it seems to me the rights would be a hot property. The
client should be informed of this huge downside to a chapter 7.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
Sent: Tuesday, July 06, 2004 9:39 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
patrick,
i'm aware of the separate issues, but my question remains largely
unanswered. from your experience, is it likely the trustee will claim
an interest in future royalties from the pre-petition works? if he does
the new work post-petition, (but signed the pre-petition contracts based
on reputation), those royalties shoud not be attachable, to my
knowledge.
thanks,
vicki
Patrick Green wrote:
Vicki,
It seems to me you have two different issues. One is the post petition
work (and some possible pre-petition work) on the new work for which he
has received an advance on which you have focused. The other is the
completed (?) work(s) for which he is already receiving royalties. I
would assume that that IP asset has market value and as such would be an
asset of the estate, if not exemptible. I assume valuation would be
somewhat speculative as the public may lose interest in the book and
therefore the royalties would cease. However since he is currently
receiving royalties of 30K/yr and he is signing new contracts, its
present value might be considerable as his reputation is still good.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the
contingent obligation to repay the advance doens't arise until and
unless the debtor doesn't fulfill the contract(s), is it appropriate to
discharge the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same
publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The debtor has no right to receive the royalties until the balance of
the work is performed. Accordingly, the estate has no right to the
royalties unless the work is done pre-petition.
As for the contingent obligation to repay the advance, this represents a
dischargeable contract obligation.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of
CA Bd of Legal Specialization.
Sent: Wednesday, June 30, 2004 11:32 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Vicki,
I know nothing about royalties, but my first concern would that if the
rights are transferable, then they are an asset of the estate which
could then be reduced to a present value and are potentially available
to be sold by the trustee.
Hopefully someone who knows about the marketability of these IP rights
will chime in to enlighten us.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
Sent: Tuesday, June 29, 2004 8:33 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] royalties
client is broke, but award winning children's book illustrator. earns
approx $30,000/yr
in royalties. this yr he signed 4 new contracts. he's been paid
$40,000 as advance against royalties and will receive the balance of
$60,000 advances by end of this year.
if he doesn't deliver, he'll owe back the money, but if he does deliver,
the royalties are potentially there for these new books. his debt is
approx. $250-300,000 - medical bills, taxes, past book deals, and
includes about $75,000 of creditcard debt. recently some
creditors are beginning to hound him. he does have 1 small judgment
against him that
i can probably settle for him if he doesn't file.
his tax atty told him not to file bk because the trustee will go after
his royalty income.
any thoughts or experience with royalties?
thanks, vicki
Yahoo! Groups Sponsor
ADVERTISEMENT
The post was migrated from Yahoo.
thanks for the clarification. maybe the way i said it caused confusion because i do
understand the difference.
Patricia Depew wrote:
Vicki, I am merely pointing out the structure of royalties as there seems to be some confusion. I have not researched the issue as to post petition royalties in this context.
Sent: Tuesday, July 06, 2004 8:16 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
patricia,
if i'm understanding you right, you're saying because the sales would be post-petition, the royualties generated from those works would not belong to the estate and the trustee would have no right to them?
thanks, vicki
Patricia Depew wrote:
I think there may be a confusion as to royalties and advances. Royalties are residual payments. A royality is a contractually set percentage of profit derived from sales of a product tht is paid to the contracting party for the life of the sales of the product. In short, the work on the product is complete and the product has been distributed and sold. So, the contract would be pre petition, the work would have been completed pre petition and the sales that generate the royalties are post petition.
Sent: Saturday, July 03, 2004 4:50 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Why focus on the issue of whether the contingent obligation is, or is not dischargeable? The client intends to perform UNLESS the trustee intervenes and asserts an interest. By the way, it is virtually certain that the obligation would be discharged even though it is contingent. Sorry, but I do not understand your last question.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the contingent obligation to repay the advance doens't arise until and unless the debtor doesn't fulfill the contract(s), is it appropriate to discharge the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The post was migrated from Yahoo.
Vicki, I am merely pointing out the structure of royalties as there seems
to be some confusion. I have not researched the issue as to post petition
royalties in this context.
-----Original Message-----
Sent: Tuesday, July 06, 2004 8:16 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
patricia,
if i'm understanding you right, you're saying because the sales would be
post-petition, the royualties generated from those works would not belong to
the estate and the trustee would have no right to them?
thanks, vicki
Patricia Depew wrote:
I think there may be a confusion as to royalties and advances.
Royalties are residual payments. A royality is a contractually set
percentage of profit derived from sales of a product tht is paid to the
contracting party for the life of the sales of the product. In short, the
work on the product is complete and the product has been distributed and
sold. So, the contract would be pre petition, the work would have been
completed pre petition and the sales that generate the royalties are post
petition.
Sent: Saturday, July 03, 2004 4:50 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Why focus on the issue of whether the contingent obligation is, or is
not dischargeable? The client intends to perform UNLESS the trustee
intervenes and asserts an interest. By the way, it is virtually certain
that the obligation would be discharged even though it is contingent.
Sorry, but I do not understand your last question.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar
of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
-----Original Message-----
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the
contingent obligation to repay the advance doens't arise until and unless
the debtor doesn't fulfill the contract(s), is it appropriate to discharge
the potential obligation?
if he doesn't, because he will likely illustrate future books w/the
same publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The debtor has no right to receive the royalties until the balance
of the work is performed. Accordingly, the estate has no right to the
royalties unless the work is done pre-petition.
As for the contingent obligation to repay the advance, this
represents a dischargeable contract obligation.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State
Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of
Certification
-----Original Message-----
Sent: Wednesday, June 30, 2004 11:32 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Vicki,
I know nothing about royalties, but my first concern would that if
the rights are transferable, then they are an asset of the estate which
could then be reduced to a present value and are potentially available to be
sold by the trustee.
Hopefully someone who knows about the marketability of these IP
rights will chime in to enlighten us.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
-----Original Message-----
Sent: Tuesday, June 29, 2004 8:33 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] royalties
client is broke, but award winning children's book illustrator.
earns approx $30,000/yr
in royalties. this yr he signed 4 new contracts. he's been paid
$40,000 as advance against royalties and will receive the balance of $60,000
advances by end of this year.
if he doesn't deliver, he'll owe back the money, but if he does
deliver, the royalties are potentially there for these new books. his debt
is approx. $250-300,000 - medical bills, taxes, past book deals, and
includes about $75,000 of creditcard debt. recently some
creditors are beginning to hound him. he does have 1 small judgment
against him that
i can probably settle for him if he doesn't file.
his tax atty told him not to file bk because the trustee will go
after his royalty income.
any thoughts or experience with royalties?
thanks, vicki
Yahoo! Groups Sponsor
ADVERTISEMENT
Yahoo! Groups Links
a.. To visit your group on the web, go to:
http://groups.yahoo.com/group/cdcbaa/
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c.. Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
Vicki, I am merely pointing out the structure of royalties as
there seems to be some confusion. I have not researched the issue asto post petition royalties in this
context.
-----Original Message-----From: vicki temkin
[mailto:Vtemkin@yahoo.com]Sent: Tuesday, July 06, 2004 8:16
AMTo: cdcbaa@yahoogroups.comSubject: RE: [cdcbaa]
royalties
patricia,
if i'm understanding you right, you're saying because the sales would be
post-petition, the royualties generated from those works would not belong to
the estate and the trustee would have no right to them?
thanks, vickiPatricia Depew
<patricia@depewlaw.com> wrote:
I
think there may be a confusion as to royalties and advances. Royalties
are residual payments. A royality is a contractually set percentage of
profit derived from sales of a product tht is paid to the
contracting party for the life of the sales of the product. In short,
the work on the product is complete and the product has been distributed and
sold. So, the contract would be pre petition,
the work would have been completed pre petition and the
sales that generate the royalties are post petition.
The post was migrated from Yahoo.
david, may i call you later to discuss further? vicki
"David A. Tilem" wrote:With all due respect, this is not correct. The sales may be a conition precedent, but the right to receive the royalties will vest when the work is done. The estate gets any rights which are 'VESTED'
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
Sent: Tuesday, July 06, 2004 8:16 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
patricia,
if i'm understanding you right, you're saying because the sales would be post-petition, the royualties generated from those works would not belong to the estate and the trustee would have no right to them?
thanks, vicki
Patricia Depew wrote:
I think there may be a confusion as to royalties and advances. Royalties are residual payments. A royality is a contractually set percentage of profit derived from sales of a product tht is paid to the contracting party for the life of the sales of the product. In short, the work on the product is complete and the product has been distributed and sold. So, the contract would be pre petition, the work would have been completed pre petition and the sales that generate the royalties are post petition.
Sent: Saturday, July 03, 2004 4:50 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Why focus on the issue of whether the contingent obligation is, or is not dischargeable? The client intends to perform UNLESS the trustee intervenes and asserts an interest. By the way, it is virtually certain that the obligation would be discharged even though it is contingent. Sorry, but I do not understand your last question.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the contingent obligation to repay the advance doens't arise until and unless the debtor doesn't fulfill the contract(s), is it appropriate to discharge the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The post was migrated from Yahoo.
patrick,
i'm aware of the separate issues, but my question remains largely unanswered. from your experience, is it likely the trustee will claim an interest in future royalties from the pre-petition works? if he does the new work post-petition, (but signed the pre-petition contracts based on reputation), those royalties shoud not be attachable, to my knowledge.
thanks,
vicki
Patrick Green wrote:
The post was migrated from Yahoo.
patricia,
if i'm understanding you right, you're saying because the sales would be post-petition, the royualties generated from those works would not belong to the estate and the trustee would have no right to them?
thanks, vicki
Patricia Depew wrote:
I think there may be a confusion as to royalties and advances. Royalties are residual payments. A royality is a contractually set percentage of profit derived from sales of a product tht is paid to the contracting party for the life of the sales of the product. In short, the work on the product is complete and the product has been distributed and sold. So, the contract would be pre petition, the work would have been completed pre petition and the sales that generate the royalties are post petition.
Sent: Saturday, July 03, 2004 4:50 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Why focus on the issue of whether the contingent obligation is, or is not dischargeable? The client intends to perform UNLESS the trustee intervenes and asserts an interest. By the way, it is virtually certain that the obligation would be discharged even though it is contingent. Sorry, but I do not understand your last question.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the contingent obligation to repay the advance doens't arise until and unless the debtor doesn't fulfill the contract(s), is it appropriate to discharge the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The post was migrated from Yahoo.
charset="windows-1251"
MessageI think there may be a confusion as to royalties and advances.
Royalties are residual payments. A royality is a contractually set
percentage of profit derived from sales of a product tht is paid to the
contracting party for the life of the sales of the product. In short, the
work on the product is complete and the product has been distributed and
sold. So, the contract would be pre petition, the work would have been
completed pre petition and the sales that generate the royalties are post
petition.
Sent: Saturday, July 03, 2004 4:50 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Why focus on the issue of whether the contingent obligation is, or is not
dischargeable? The client intends to perform UNLESS the trustee intervenes
and asserts an interest. By the way, it is virtually certain that the
obligation would be discharged even though it is contingent. Sorry, but I
do not understand your last question.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of
CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
-----Original Message-----
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the
contingent obligation to repay the advance doens't arise until and unless
the debtor doesn't fulfill the contract(s), is it appropriate to discharge
the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same
publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The debtor has no right to receive the royalties until the balance of
the work is performed. Accordingly, the estate has no right to the
royalties unless the work is done pre-petition.
As for the contingent obligation to repay the advance, this represents a
dischargeable contract obligation.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of
CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
-----Original Message-----
Sent: Wednesday, June 30, 2004 11:32 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Vicki,
I know nothing about royalties, but my first concern would that if the
rights are transferable, then they are an asset of the estate which could
then be reduced to a present value and are potentially available to be sold
by the trustee.
Hopefully someone who knows about the marketability of these IP rights
will chime in to enlighten us.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
-----Original Message-----
Sent: Tuesday, June 29, 2004 8:33 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] royalties
client is broke, but award winning children's book illustrator. earns
approx $30,000/yr
in royalties. this yr he signed 4 new contracts. he's been paid
$40,000 as advance against royalties and will receive the balance of $60,000
advances by end of this year.
if he doesn't deliver, he'll owe back the money, but if he does deliver,
the royalties are potentially there for these new books. his debt is
approx. $250-300,000 - medical bills, taxes, past book deals, and includes
about $75,000 of creditcard debt. recently some
creditors are beginning to hound him. he does have 1 small judgment
against him that
i can probably settle for him if he doesn't file.
his tax atty told him not to file bk because the trustee will go after
his royalty income.
any thoughts or experience with royalties?
thanks, vicki
Yahoo! Groups Sponsor
ADVERTISEMENT
Yahoo! Groups Links
a.. To visit your group on the web, go to:
http://groups.yahoo.com/group/cdcbaa/
b.. To unsubscribe from this group, send an email to:
cdcbaa-unsubscribe@yahoogroups.com
c.. Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
charset="windows-1251"
The post was migrated from Yahoo.
i hadn't thought of discharging the contingent obligation before you first mentioned it.
the contracts are all signed and he's received some of the advances; the balances to be received before the end of this year. i don't think he'd be happy if he had to list them - he's concerned w/his continued relationship w/the companies. i'm more interested in the potential royalties issue and the trustee asserting an interest in them. if that would or is likely to happen, he probably won't file a 7 and just muddle thru as best he can.
"David A. Tilem" wrote:
Why focus on the issue of whether the contingent obligation is, or is not dischargeable? The client intends to perform UNLESS the trustee intervenes and asserts an interest. By the way, it is virtually certain that the obligation would be discharged even though it is contingent. Sorry, but I do not understand your last question.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of CA Bd of Legal Specialization.
Business bankruptcy specialist cert. by Amer. Bd. of Certification
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the contingent obligation to repay the advance doens't arise until and unless the debtor doesn't fulfill the contract(s), is it appropriate to discharge the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The post was migrated from Yahoo.
charset="windows-1251"
Vicki,
It seems to me you have two different issues. One is the post petition
work (and some possible pre-petition work) on the new work for which he
has received an advance on which you have focused. The other is the
completed (?) work(s) for which he is already receiving royalties. I
would assume that that IP asset has market value and as such would be an
asset of the estate, if not exemptible. I assume valuation would be
somewhat speculative as the public may lose interest in the book and
therefore the royalties would cease. However since he is currently
receiving royalties of 30K/yr and he is signing new contracts, its
present value might be considerable as his reputation is still good.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
Sent: Wednesday, June 30, 2004 9:49 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
david,
the bulk of the work would be done post petition filing. since the
contingent obligation to repay the advance doens't arise until and
unless the debtor doesn't fulfill the contract(s), is it appropriate to
discharge the potential obligation?
if he doesn't, because he will likely illustrate future books w/the same
publishing houses, would it be considered a fraud to not discharge?
thanks a lot, vicki
"David A. Tilem" wrote:
The debtor has no right to receive the royalties until the balance of
the work is performed. Accordingly, the estate has no right to the
royalties unless the work is done pre-petition.
As for the contingent obligation to repay the advance, this represents a
dischargeable contract obligation.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem
500 N. Brand Blvd., #460, Glendale, CA 91203
Tel: 818-507-6000 Fax: 818-507-6800
* Personal & small business bankruptcy specialist cert. by State Bar of
CA Bd of Legal Specialization.
Sent: Wednesday, June 30, 2004 11:32 AM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] royalties
Vicki,
I know nothing about royalties, but my first concern would that if the
rights are transferable, then they are an asset of the estate which
could then be reduced to a present value and are potentially available
to be sold by the trustee.
Hopefully someone who knows about the marketability of these IP rights
will chime in to enlighten us.
Pat
Patrick T. Green, Esq.
Fitzgerald & Green
Attorneys at Law
1010 E. Union St Suite 206
Pasadena, CA 91106
Ph: 626-449-8433
Fax: 626-449-0565
pg23@earthlink.net
Sent: Tuesday, June 29, 2004 8:33 AM
To: cdcbaa@yahoogroups.com
Subject: [cdcbaa] royalties
client is broke, but award winning children's book illustrator. earns
approx $30,000/yr
in royalties. this yr he signed 4 new contracts. he's been paid
$40,000 as advance against royalties and will receive the balance of
$60,000 advances by end of this year.
if he doesn't deliver, he'll owe back the money, but if he does deliver,
the royalties are potentially there for these new books. his debt is
approx. $250-300,000 - medical bills, taxes, past book deals, and
includes about $75,000 of creditcard debt. recently some
creditors are beginning to hound him. he does have 1 small judgment
against him that
i can probably settle for him if he doesn't file.
his tax atty told him not to file bk because the trustee will go after
his royalty income.
any thoughts or experience with royalties?
thanks, vicki
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