Class Action Suit Filed Against All Romance eBooks

When it shut down just over 2 weeks ago, indie ebook retailer All Romance eBooks gave customers just 3 days to download their purchases, and more importantly, it offered publishers and indie authors ten cents on the dollar for unpaid royalties on the condition that they agree to not sue.

That did not sit well with the authors and publishers. only around 11% have stated that they accepted the offer, and now one of the holdouts has filed a class action lawsuit against ARe and its owner, Lori James.


I am still waiting for a text copy of the announcement, but here is what we know so far:

The press release was initially posted to a private FB group; while I was waiting for permission to post it publicly, Writer Beware beat me to the punch.

Individually, the money owed to authors and publishers would be regarded as unsecured debts. They would be the last to be paid in a bankruptcy and might get paid even less than ten cents on the dollar.

But as a class, they might have a better shot at getting assets.

Assuming there are any assets to go after.

As Kris Rusch pointed out last week, ARe had been failing for a couple years - at least. What looks like an abrupt closure is really the final stage in a slow downward spiral:

They are threatening bankruptcy. Since authors are unsecured creditors, most authors will see no money at all in a bankruptcy.

In fact, I expect the writers who opt for the 10 cents on the dollar solution will not be paid either.

Why do I expect that, besides experience with this kind of thing? Primarily because of the ad blast. The blast wasn’t ARe being venal. It was their last-ditch attempt at raising enough capital to save their business.

Guessing now, purely guessing.

ARe had run ahead of their money since they started. They used today’s money to pay yesterday’s bills. They had no profit. So they were floating money—payments to authors, payments to creditors, payments like website and rent.

That’s why ARe’s technology grew antiquated, why they weren’t keeping up with the times, why payments in some cases were late or impossible to get. They probably got a line of credit too late or they didn’t have one or they were borrowing off credit cards.

Rusch had pulled her titles from ARe once it was clear that ARe was no longer tracking sales correctly. That was a couple years ago.

If ARe has been pinching pennies for that long, struggling to get by, then it would mean that by this point there is nothing left to the retailer but debts.

On the other hand, this lawsuit may be able to go after Lori James assets. Depending on how ARe was incorporated, the judge may be able to go through to the owners' assets and use them to pay the plaintiffs.

Assuming, that is, that James has any assets left to fight over.

image by kenteegardin



About Nate Hoffelder (10604 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

7 Comments on Class Action Suit Filed Against All Romance eBooks

  1. Insert here: that Gilbert Gottfried line about having a heart attack and dying from not-surprise.

  2. I wish the authors luck and hope they start a gofundme account so others can contribute to the legal fees for this lawsuit. I know I will be among the first to contribute. Even though I’m a reader and wasn’t ripped off as much as the authors, the rage I feel against Lori James on behalf of authors and readers has not abated at all. This criminal needs to be held responsible for her actions.

  3. I had about 20 books to download. Never received notice that the site was closing down. It’s a shame I really enjoyed some of the authors and lots aren’t available on the kobo site. ??

  4. Well considering thoes of us that found out last minute and during a holiday season at that had no luck of downloading our entire libraries. I hope when things are settled we do get that chance. They should always remember Karma!

  5. I only had 15 books to download after their notice of closing, I usually download the day of buying (1000+ in library). The only problem I had was trying to buy a book and it disappearing after said sale and the site crashing. It took about 10 days to get it refunded (I made sure to keep hounding them).

  6. They were my first eBook site I ever used. I have over a hundred books in my library there that aren’t downloaded to my Kindle. This really sucks. Good luck to anyone that’s owed anything or us that can’t get to our books.

  7. I am so upset about this whole situation. I have been a customer sense 2007.
    I only had 1/3 of my books stored on my tablet. I cant believe I lost all those books. I really miss reading books by my favorite authors. I had 35 books to download and was unable to do it.

3 Trackbacks & Pingbacks

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