4 ms·

The other side is the question "is this news?" Everyone thinks their circumstance is "precedent setting" and something to pay more attention to than other thin

The other side is the question "is this news?" Everyone thinks their circumstance is "precedent setting" and something to pay more attention to than other things, but the question here being is it? You can buy assets without liabilities. There isn't something to find out... or is there? Yes, you and them just noticed that this could undermine all royalties by just shuffling them off to a shell company that has no ability to pay. But are you sure it hasn't always been like that? For example, many jurisdictions require a tax when a car is sold. But you can always buy the LLC that happens to own a car and no tax event occurred. The only point of this example - not as an analogy to this case - is that the feature was always present and it avoids a transaction. Could this deprive the state of revenue? Yes, yes it could, astute observation, moving on. This article and complaint makes it seem like it is groundshaking, but did the earthquake really come decades ago and nobody used their platform to notice? I am reserving judgement on the legal side for that purpose. Can we shame Disney for taking that approach, sure. But attempting to get a reputable legal advocacy foundation involved for a reality that already has existed for an unknown amount of time seems like misdirection.

michaelmrose 6y ago
Please provide some precedents for shedding liabilities while retaining assets.
- cool_dude85 6y ago
  There are some tricks. "Spin off" a new company with all your pension liabilities and your unprofitable assets, whaddaya know, the new company goes bankrupt. Then the courts can give the pensioners a haircut since the debt they're owed isn't secured. https://www.reuters.com/article/us-patriot-bankruptcy/bankrupt-patriot-coal-asks-court-to-slash-union-pensions-idUSBRE93S09B20130429 https://www.reuters.com/article/us-patriot-bankruptcy/bankru...
  - michaelmrose 6y ago
    Peabody may have spun off unprofitable operations and let them crash but how did it sepate assets and liabilities for the same operation?
  - deleted 6y ago
    [deleted]
  - anilakar 6y ago
    In the US pension system, are the pension payments somehow delayed from the actual date that liability is accrued, i.e. the day the employee gets paid the first time? Is it legal for a company to pay a salary to their employees without having the financial assets to back all other liabilities? I can somehow see the twisted reasoning behind this, but it still feels wrong. Asking this as a foreigner and because such a system sounds so ripe for abuse that it would have already been fixed if it really was flawed and affected those pensioners' lives.
cptskippy 6y ago
The asset in this case is a license agreement. By choosing to publish the licensed material, they're agreeing to pay royalties. Otherwise it's theft. Otherwise what's stopping me from selling my Disney BluRays to someone but not the liabilities of adhering to the copyright agreement?
- JackFr 6y ago
  So it might not be quite that cut and dried. A little digging shows that Alan Dean Foster was contracted to write two novels. Despite writing them, he never held the copyright on those novels. That being said, it’s still quite likely Disney is in breach of contract. But it’s not quite as simple.
  - Mtinie 6y ago
    It is if the contract says he’s owed royalties on those works, as it is presented. I can’t imagine he’d have done the work pro Bono for Lucasfilm out of the kindness of his heart, do you? The reasonable interpretation is that someone at Disney is attempting to shore up their revenue this year and is using Mr. Foster’s due proceeds as a way to attempt to make their balance sheet look better.
    - JackFr 6y ago
      I imagine that 100x Alan Dean Foster’s back royalties wouldn’t even be noticeable on Disney’s balance sheet. The only reason I can really think of them doing this is that they don’t actually believe they owe him the money. It’s reasonably clear that he never held the copyright to the works and it’s not public what his actual contract was.
      - webmaven 6y ago
        > I imagine that 100x Alan Dean Foster’s back royalties wouldn’t even be noticeable on Disney’s balance sheet. Disney could be doing this at scale to many authors, this announcement by SFWA may bring a bunch of other complainants out of the woodwork. The other aspect is that while what you say is certainly true of Disney as a whole, the amounts may be more meaningful for some subsidiary or division, (like, you know, their publishing arm) and the exec(s) that head it.

michaelmrose 6y ago

Please provide some precedents for shedding liabilities while retaining assets.

cool_dude85 6y ago
There are some tricks. "Spin off" a new company with all your pension liabilities and your unprofitable assets, whaddaya know, the new company goes bankrupt. Then the courts can give the pensioners a haircut since the debt they're owed isn't secured. https://www.reuters.com/article/us-patriot-bankruptcy/bankrupt-patriot-coal-asks-court-to-slash-union-pensions-idUSBRE93S09B20130429 https://www.reuters.com/article/us-patriot-bankruptcy/bankru...
- michaelmrose 6y ago
  Peabody may have spun off unprofitable operations and let them crash but how did it sepate assets and liabilities for the same operation?
- deleted 6y ago
  [deleted]
- anilakar 6y ago
  In the US pension system, are the pension payments somehow delayed from the actual date that liability is accrued, i.e. the day the employee gets paid the first time? Is it legal for a company to pay a salary to their employees without having the financial assets to back all other liabilities? I can somehow see the twisted reasoning behind this, but it still feels wrong. Asking this as a foreigner and because such a system sounds so ripe for abuse that it would have already been fixed if it really was flawed and affected those pensioners' lives.

cptskippy 6y ago

The asset in this case is a license agreement. By choosing to publish the licensed material, they're agreeing to pay royalties. Otherwise it's theft. Otherwise what's stopping me from selling my Disney BluRays to someone but not the liabilities of adhering to the copyright agreement?

JackFr 6y ago
So it might not be quite that cut and dried. A little digging shows that Alan Dean Foster was contracted to write two novels. Despite writing them, he never held the copyright on those novels. That being said, it’s still quite likely Disney is in breach of contract. But it’s not quite as simple.
- Mtinie 6y ago
  It is if the contract says he’s owed royalties on those works, as it is presented. I can’t imagine he’d have done the work pro Bono for Lucasfilm out of the kindness of his heart, do you? The reasonable interpretation is that someone at Disney is attempting to shore up their revenue this year and is using Mr. Foster’s due proceeds as a way to attempt to make their balance sheet look better.
  - JackFr 6y ago
    I imagine that 100x Alan Dean Foster’s back royalties wouldn’t even be noticeable on Disney’s balance sheet. The only reason I can really think of them doing this is that they don’t actually believe they owe him the money. It’s reasonably clear that he never held the copyright to the works and it’s not public what his actual contract was.
    - webmaven 6y ago
      > I imagine that 100x Alan Dean Foster’s back royalties wouldn’t even be noticeable on Disney’s balance sheet. Disney could be doing this at scale to many authors, this announcement by SFWA may bring a bunch of other complainants out of the woodwork. The other aspect is that while what you say is certainly true of Disney as a whole, the amounts may be more meaningful for some subsidiary or division, (like, you know, their publishing arm) and the exec(s) that head it.