NovelBooks Inc closed its doors in January 2005. Since then I've heard from a number of unhappy authors (and I understand there are dozens of them) who say they weren't paid royalties--for nearly two years in one case, and in others for more than 12 months. Editors and artists apparently weren't paid either.
Apparently the company's owner borrowed sizeable sums money from some authors and never repaid them, and sold substantial amounts of "stock" to a number of authors and investors, even though the company wasn't registered with the SEC. I heard from one writer who bought 5,000 shares, and another who bought 2,000 shares at $0.50 per share. As is typical of such schemes, the publisher was in trouble for some time before closing; it seems, however, that the owner played authors off against each other with some skill, so that most thought their problems were unique and didn't realize the difficulties were company-wide until the company folded.
A number of NBI authors have been talking with various law enforcement agencies, including the FBI, in an attempt to get them to investigate. No word as of now on any official investigation.
NBI's former owner, Penny Hussey, who also goes by the name Phyllis Ann Welsh, is rumored to be involved in another publishing venture.
- Victoria
