Christine Brashear Files Civil Suit Against Ellora’s Cave, Tina Engler, et al.

Christine Brashear, currently at Samhain Publishing and a 5% shareholder in Ellora’s Cave, has filed civil suit against Ellora’s Cave, Tina Engler/Jaid Black, Patricia Marks, and various affiliated individuals and companies.

To read the 19-page PDF of the civil suit filed in Summit County, Ohio, last week,  you can search by Last name or you can download your own copy here. Brashear’s complaint asks for “damages and injunctions for breach of contract; breach of statutory and common law duties, breach of fiduciary duties and defamation.”

Say what now?

Breashear’s complaint states that:

- As a shareholder Engler, Marks, et al. have breached their fiduciary duty to her, as well as violating specific clauses of their buy-sell agreement.

What’s a fiduciary duty, other than something really fun to say? From Wikipedia: “A fiduciary is expected to be extremely loyal to the person to whom they owe the duty (the “principal”): they must not put their personal interests before the duty, and must not profit from their position as a fiduciary, unless the principal consents.”

-  Brashear then mitigates her damages in that she states she requested access to their financial records, and they denied her access—access which is her right as a shareholder.

- Moreover, Brashear alleges that Ellora’s Cave et al. owe her money as a shareholder, money on which she must pay taxes, but which she never received from Ellora’s Cave (item 13, page 5).

-  On Page 4, item number 9, the complaint states that Engler and Marks have been “diverting EC’s assets…to some of all of the Related Companies… accounting manipulation to reduce shareholder distributions to which Brashear would properly have been entitled, and by terminating Brashear’s employment.”

I am curious whether the case will go to federal court, since damages could be greater than $75,000 and since the parties in the suit are from different states. Additionally, what does this mean for authors looking to publish with, or authors currently published with Ellora’s Cave?

Either way, this should be rather interesting.

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  1. 1

    Ladies, I came over hear looking for a laugh.  This so wasn’t what I had in mind.

  2. 2

    See, you got me so depressed, I can’t even spell simple words.

  3. 3

    Wow…this is NOT what I expected to see over here tonight.

    Holy. Crap.

  4. 4
    Jamie says:

    I doubt that they will be able to remove.  They signed an agreement that they would have OH be the venue, and it would be to the plaintiff’s advantage, likely, to keep it in state court.

    I just skimmed the articles of incorp., but they are really, really odd, and as a minority shareholder, I do not think that I would have signed it.  Like the shareholders determine the valuation of the stock and are bound when selling stock to the last written number that they agreed on.  So the last number may have been what the “value” of the stock was when EC was first formed, arguably.  Any investor would insist on an independent valuation if she knew what she was doing, so why would you sit down and come up with a number periodically?  Though, I suppose that that could be turned over on equity grounds, especially since this is such a closely held corp (which makes me ask why a corp and not an LLC).

    Anyway, it’s 5%.  They should just bring in an independent valuation firm, value it and buy the plaintiff out—and settle for any other amount.  Everyone goes home happy, and authors keep publishing.  Otherwise, I don’t know ECs financials, but they are a small company and I doubt that they (or the plaintiff for that matter) have the resources for any prolonged litigation.

  5. 5
  6. 6

    Not what I expected to see when I came on here tonight.

    Wow.

  7. 7
    Tori Anne says:

    Hmmm, I just submitted to EC.  I’ll be watching this matter closely.

  8. 8
    DS says:

    Ohio overall is pretty conservative.  I’m not sure Akron would be the place I would want to have the trial if I were Engler—jury trial, too.  I don’t know anything about the plaintiff, but the defendant has enough information out there to put her lifestyle on trial rather than the issues.

  9. 9

    Well, crap.
    Out of the frying pan, into the fire.

    I’ve downloaded a Pdf, and will read it after work.
    This could be big and very bad.

    EC is the 800 lb gorilla of online romance. If this takes them down, it’ll hurt an awful lot of people.

  10. 10
    Delightful Anon says:

    I kinda doubt it’s going to end EC or something.  We’re talking about 5% of EC shares outstanding.

    But I do think that the suit may become costly.

  11. 11
    Another Anon says:

    What does this mean for the authors? For now it will the same old party line, EC good…Brashear evil… More of the same fucktardedness of not being told when our books are coming out, books never making it to the print list, shrinking sales while the party line is EC is making more money than ever…yet the authors aren’t seeing it. No distribution, paperback sales trailing off to a mere dribble – Borders not carrying the books due to EC’s inability to fill orders (or keep books in print bt that’s another story)…same old same old. And heaven forbid an author asks an intelligent question like, ‘when is my ebook coming out’ or ‘will you be buying an ad for this book?’  – they are labeled as a troublemaker and served with cease and desist papers from the EC attorney. Maybe that’s where the money is going?

    EC was a great company with Brashear at the helm and now it has turned into a petty dictatorship. Would I recommend any author to try and break in at EC? Hell no. They’d be better served printing their books in the garage and selling them out of the back of their car.

  12. 12
    WMM says:

    I think this brings up some interesting things.

    As a longtime EC author, I can say that at times over the years EC’s accounting pracices have been questionable at best. Postdated checks, (EC saying “the check’s in the mail.”); paying the wrong author for another author’s book (happens ALL the time and takes them forever to fix); misspelling the author’s name sometimes and sometimes not on their paychecks; paying the OLD agent for a book the NEW agent negotiated and not getting it straightened out for months… For God’s sake they used EXCEL SPREADSHEETS for Payroll forever. EXCEL to handle supposedly a million dollar corporation’s payroll????? 

    You should see the monthly statements we get. They change almost every damn month in format and in the way they list the titles. It’s confusing trying to figure out what they did this month as opposed to months in the past.

    Say what they will in response, but there are enough EC authors out there who might not speak up but are nodding. There’s proof to back up every word. And yeah, I’m chickenshit to put my own name out there. Like I need THAT kind of attention.

    I think it will be interesting to see if Christina Brashear’s suit will bring about any changes related to the above and if some “things” will be found in the process. Personally I’m very curious about the diversion of funds.

    BTW, I do not write for CB, don’t have anything to do with her publishing company, so X out any affiliation. Except that I went, “Oh, shit,” when she left EC, “there went the brains.”

    From what I’ve read—what the hell is going on when EC refuses to show CB the books for 3 years and CB has to pay taxes on, um, what? And EC doesn’t pay her that “what” amount? And CB owns 5% of the company. She has the right to see those books. And, BTW, to get paid.

    I’d like to see CB get what’s coming to her and see EC get what’s coming to them.

    This is all called KARMA.

  13. 13
    WMM says:

    What does this mean for the authors? For now it will the same old party line, EC good…Brashear evil… More of the same fucktardedness of not being told when our books are coming out, books never making it to the print list, shrinking sales while the party line is EC is making more money than ever…yet the authors aren’t seeing it. No distribution, paperback sales trailing off to a mere dribble – Borders not carrying the books due to EC’s inability to fill orders (or keep books in print bt that’s another story)…same old same old. And heaven forbid an author asks an intelligent question like, ‘when is my ebook coming out’ or ‘will you be buying an ad for this book?’ – they are labeled as a troublemaker and served with cease and desist papers from the EC attorney. Maybe that’s where the money is going?
    EC was a great company with Brashear at the helm and now it has turned into a petty dictatorship. Would I recommend any author to try and break in at EC? Hell no. They’d be better served printing their books in the garage and selling them out of the back of their car.

    Author Anon, you’re hitting it on the head. I would say stay the way the hell from EC if you want your career to fly. EC’s got a BAD rep in NY. I know.

    Part of the reason EC’s books aren’t available for widespread distribution (unless things have changed—HA) is that they chose not to go with Ingrams. Huh? They didn’t want to handle the fees. So they went with Baker & Taylor instead which does not have the distribution that Ingram’s has.

    EC is so freaking cheap they built their own warehouse so that they wouldn’t have to pay to have their books warehoused. They want bookstores to order directly from them as opposed to an Ingrams or B&T. WTF? What major corporation is going to want to change the way they do business to accomodate EC. AND, speaking of cheap, they bought their own printing press to not have to pay anyone else to do their printing.

    Uh-huh.

    Speaking of shrinking sales and income: my print checks are 1/4 of what they used to be, and my digital sales 1/2. I’m on a very private loop of 9 authors and they talk about months where there are only 200 books or less sold the first month a book comes out when we were used to 700-1000+ that first month. (after that it can range from 25-75 books a month depending on what you write.)

    And when will our books come out in print? Yeah, right. THEY don’t even know.

  14. 14

    More disturbing news from the world of ebook publishing.  I think all of us who are epubbed will be watching this case.

  15. 15
    seriously disturbed says:

    WOW Jaid and her mother sound like they have no morals, im not impressed with that company at the moment… maybe one day they will get a clue

  16. 16
    One of Many says:

    Grab opener. Attach to can of worms.

    Say what they will in response, but there are enough EC authors out there who might not speak up but are nodding.

    I suspect we are legion.

    EC is the 800 lb gorilla of online romance.

    Ergo,

    now it has turned into a petty dictatorship

    That’s been my impression. As a result:

    And yeah, I’m chickenshit to put my own name out there. Like I need THAT kind of attention.

    Who does?

    …books never making it to the print list, shrinking sales while the party line is EC is making more money than ever…yet the authors aren’t seeing it

    I suspect the fact EC has turned into a book mill has something to do with this.  More authors, more releases = fewer sales per title but more money in the corporate coffers.

    And the beat goes on…

  17. 17
    Ann Jacobs says:

    Never having written for Samhain (or subitted to them, for that matter), I leave their defense to others.

    I don’t know about all Ellora’s Cave authors, but my own experience has been that sales have increased (more than doubled on initial releases of ebooks)since I began writing for them in late 2002. Yes, print sales have been down somewhat, but since I make a much larger royalty percentage on the ebooks, I can’t complain.

    As to the errors in royalty reporting, I saw them all the time when Cris Brashear was in charge. Since she left, I’ve seen few mistakes—and I run my own spreadsheets to keep track of each book’s earnings and highlight any unusual patterns.

    I agree, the use of spreadsheets to calculate royalties is certainly not state-of-the-art accounting for a publisher that has thousands of books and hundreds of authors to pay. On the other hand, EC began as a one-person operation, with only a handful of authors to keep track of. As the company has grown, the accounting has been slow to follow—but Patty Marks and the accountants who work with her now are well-educated and knowledgeable about how to evolve into using a more sophisticated system than Excel spreadsheets.

    To be honest, I find it tasteless for a private beef to have become fodder for gossip sites to post and stir up old resentments that apparently haven’t yet been laid to rest.

  18. 18
    DS says:

    From e-bodice ripper(if that doesn’t make you cringe):
     

    Tina Engler pitched her first romance novel seven years ago. All the big publishers spurned her. Her tale of a woman kidnapped and ravished by a lusty, strapping alien was too explicit, they said. So she started her own publishing company, Ellora’s Cave, in Akron, Ohio, which last year netted an estimated $600,000 on revenue of $6.7 million, up 11% from 2005. Its specialty is raunchy taboo fare for the ladies. One new title, Date With Destiny, tells of a woman and her friend who take up with gorgeous identical twin werepanthers on a cruise ship.

    http://www.forbes.com/forbes/2007/0618/048.html

  19. 19
    WMM says:

    To be honest, I find it tasteless for a private beef to have become fodder for gossip sites to post and stir up old resentments that apparently haven’t yet been laid to rest.

    The truth hurts.

  20. 20
    Arethusa says:

    To be honest, I find it tasteless for a private beef to have become fodder for gossip sites to post and stir up old resentments that apparently haven’t yet been laid to rest.

    —Ann Jacobs

    “private beef”? It’s a lawsuit of which the details are available on a public government website, posted on a blog that’s about, among other things, the romance publishing world. This isn’t “The Superficial”.

  21. 21
    Teddypig says:

    “private beef”? It’s a lawsuit of which the details are available on a public government website, posted on a blog that’s about, among other things, the romance publishing world. This isn’t “The Superficial”.

    This!

  22. 22
    Jane says:

    If the romance blogs had the traffic of gossip sites, we could all quit our day jobs.

  23. 23
    Robin says:

    As to the point about this being a “private beef” it only looks that way because EC is a closely held corporation, which means that it has few shareholders who are also corporate officers and stock that isn’t publicly traded.  If EC were a larger corporation, this would be more readily recognizable as a derivative shareholder suit, which is where a shareholder brings suit against a corporation on its own behalf (i.e. you’re suing the corporation based on its own wrongdoing, and you are doing so on behalf of and to protect the shareholders and the corporation).  In a closely held corporation, however, a minority shareholder can sue the individual officers of a corp as an individual, making it look like a personal lawsuit.

  24. 24
    Um says:

    …if I’m reading those documents correctly, which it’s entirely possible I’m not, Brashear was legally obligated to sell those shares back at the time of her termination from the company. Given that she filed an unlawful termination suit against EC—which she lost—perhaps she refused at that time to sell the shares back, or that the shares automatically reverted (as it looks like there might have been a clause stating this.)

    I’m also guessing we don’t have all the facts in this case yet, at all.

    I write for EC. While I would not and am not claiming that the writers complaining about their treatment here are lying or exaggerating or bearing some sort of grudge, their experiences have not been remotely like mine (although I agree the print program is confusing and not well though out.) I had an issue with my royalties being paid to another writer in my same antho—the problem was fixed immediately, with apologies. I’ve never been given less than adequate notice of publication dates, I’ve never received anything but quick and professional replies from anyone at the company I’ve had occasion to ask questions of, up to and including Raelene.

    But really, the bottom line is, this suit has nothing to do with authors or how EC is run as a company. It’s a private dispute—not private as in none of our business, as it has been correctly pointed out that this is a matter of public record—but private in that it does not effect the day-to-day business of EC or Samhain.

    It’s a minor shareholder dispute. Hardly evidence that EC (or Samhain, or Tina, or Chrissy) is Teh Evuhl.

  25. 25
    One of Many says:

    Come on now, didn’t y’all expect at least one mascot or cheerleader to show up for the game?

  26. 26
    Um says:

    Oh, and, I’ve heard from some very unhappy Samhain authors as well. That doesn’t mean Samhain is a lousy, crooked, or unprofessional company, I would never say or assume that. It’s impossible to please everyone.

  27. 27

    I’m a relatively new author and can’t address any problems other authors might be having. 

    However, I can say that the vast majority of my experiences with EC have been very positive.  I’m extremely happy with my royalties.  For the last eight months, my checks have arrived on time, filled out correctly, and accompanied by clear, concise statements that never vary in format.  My editors, both Heather and Mary, were awesome to work with.  Every time I’ve emailed anyone at EC for help or information, I’ve gotten it.  Several months ago, I whined on the authors’ loop about a problem I was having with a signing at my local bookstore and someone from EC picked up on it and called me to help get things squared away.

    Yes, there are a couple of things I’m not totally happy with at EC, but I’ve never worked for any company, no matter how great, that I didn’t have at least a few of gripes about.  And yes, maybe EC’s management has made a few decisions I might not have—but then I’ve always been one to play it safe, which is why I’d have been an utter failure as an entrepreneur.  Publishing is a gamble, plain and simple, and if you want to grow, you have to take some risks.  I don’t see any reason to villify management because some of their ideas pan out better than others.

  28. 28
    Wylie Kinson says:

    I have to ditto Robin L. Rotham’s sentiments.
    I, too, am a relatively new EC author, but with both of my books, I had a release date and cover art months in advance.
    It’s a priviledge to work with my editor Kelli, who keeps me informed and up-to-date on everything concerning my book and promptly responds to my every stupid question.
    My royalty statments appear regularly and in the same format each time.
    What little contact I’ve had with Raelene has been extremely positive, and though I can’t address the print schedule, I will say that Raelene has been very forthcoming on the EC author loop as to why they chose to go with Baker & Taylor as oppossed to Ingrams, and exactly why they’ve had trouble with Borders.
    I was satisfied with her explanations. Personally, I’ve never felt that I was being duped or misled by the management of EC.

    I can’t comment on CB and Samhain as I’ve never submitted to them, but I will say—they put out some damn good books too!

    The issue between CB and EC is sad for all of us in the epub world, especially in light of the recent closures of epubs.

  29. 29
    Diana Hunter says:

    I’m NOT a new EC author…been published with them since 2003. Have there been issues? Sure…all companies have growing pains and one-by-one Ellora’s Cave has dealt with each issue I’ve ever had with them in a professional manner.  I pubbed with EC both with Crissy there and with her gone. Have I seen a difference? No, not really. I write, they publish, I get a check.

    I do wish to clear up one misconception mentioned above. The EC and Borders “troubles” have nothing to do with EC being able to keep up with the orders. They managed that just fine. But Border’s business practices (ie. their return policies to publishers) made it difficult to do business with them. I’m sure others can speak to the issue much more knowledgeably, but know that THAT trouble was not on EC’s part.

    And yes, I’ll sign my full name.

    Diana Hunter

  30. 30
    Cat Marsters says:

    I, too, am a relatively new EC author, but with both of my books, I had a release date and cover art months in advance.

    For e-books, yes.  But I hit problems with the print program—release dates delayed and then cancelled for more than a year.  When the book finally appeared in print, I wasn’t even told about it, nor that it had a new cover. 

    Because of this I didn’t actually believe my Samhain books were ever going to be in print.  Imagine my astonishment when everything went to plan and my advance copies even came early.

    So, I’ve voted not with my wallet, but with my submissions.  I’ll be watching for the outcome of this case with interest.

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