A skeleton walks into a doctor’s office. Doctor says, “Now you come to see me”?

Those of you who have attended our seminars know that we advise, urge, stress, cajole, beg and even plead with photographers and models who are owed money by clients to get thee to a lawyer ASAP. There is no good reason to believe that a company that has not paid you in a timely fashion will ever voluntarily pay you.

Beyond looms the spectre of a bankruptcy filing and how creators are tricked into not pursuing valid claims against deadbeat clients who threaten to file for bankruptcy protection if the artist doesn’t go away.  Such “threats” are however, typically empty.

Here’s why. First in legalese:

Copyright infringement can not be discharged by a bankruptcy court.  The knowing unauthorized use of a model’s image in advertising, trade and/or the promotion of a product, service or organization (in many states) is what is known in the legal biz as an “intentional tort” and can not be discharged by a bankruptcy court.

Now in plain English:

If your copyright has been infringed you have rights under the Federal Copyright Law.  The Bankruptcy Law is also a Federal law and these two laws are in effect, equal. A bankruptcy judge has the power to let a company tear up a contract or avoid a debt but it does not have the power to “erase” or “discharge” a claim in copyright infringement made by a registered author. (Yes, there are exceptions which we won’t go into here). A copyright infringement suit can proceed promptly regardless of any bankruptcy proceedings. All other pending or future lawsuits get “frozen” and must get sent to the bankruptcy judge.

Similarly, an “intentional tort” (generally) can’t be discharged by a bankruptcy court either. Law school example – Al punches Bob breaking Bob’s jaw. Bob sues. Al tries to file for bankruptcy protection to avoid paying Bob. The bankruptcy court will not permit Al to use the court to “beat the rap” pun intended.  The knowing use of a model’s image without consent may serve as the same type of claim – “an intentional civil wrong”.

So aside from collecting sums which may be due or allowable to you under the law, a photographer and/or model by commencing suit has the power to have a court issue an order preventing or stopping the use of the imagery. That threat alone most often gets the photographer and/or model paid even before a bankruptcy filing has been made. Since you have no way of knowing if, as and when a dead beat intends to close up or file for bankruptcy protection, waiting is a dangerous gamble.

Which brings us to real life and the shocking closing of the high fashion Lipman Ad Agency. That agency has been a major player on the Manhattan scene for only about seven or eight decades.
Without notice or warning it simply closed up shop the other day. The following are links to two stories in the New York Post.

Lipman ad agency shuts down

Super models stung by Lipman closure

Many who are owed money had not filed or even considered litigation. Some hired collection agencies rather than start lawsuits – virtually never a wise option.  To our knowledge the Lipman Agency has not made a filing in bankruptcy as yet.  Now will those artists, models, model agencies ever get paid? It is impossible to say at this point.

The lesson to be learned from this episode of The Copyright Zone is to act quickly and wisely when owed money.  Don’t wait for your client to grow a heart.