Collection of reserve accounts
I am an author for Coriolis pblishing, a Delaware corporation. I have recieved notice they are closing their doors as of April 19, 2002. They are only going to pay me 20% of all monies owed. The owe me over $10,000.00 in royalty and reserve account payment. Reserve account is money withheld from previous royalty payments to allow for book returns.
I believe this amounts to embezzelment as these funds were supposed to be held in trust (as implied in a contract stipulating their return) when instead they were used to defray operating costs. In addition by contract they owe me the royalties through the time they close the oors, the statement only goes through Dec. 2001.
What are my options under Delaware contract law? What were their responsibilities toward this reserve account money?
1 Answer from Attorneys
Re: Collection of reserve accounts
If the business was operated as a corporation, your claim for unpaid money owed under the contract would be against the corporation only. It would take a review of the documents and facts to determine whether there is any chance of proceeding directly against any individuals running the corporation.
The contract would have to be reviewed to determine whether there was an obligation to hold royalty and reserve account money in trust. If there was such an obligation, there may be a claim of fraud to be brought.
This is general information for discussion purposes. Please feel free to contact me if you want to discuss forming an attorney-client relationship.