OMG. I just learned that my publisher is filing bankruptcy. The owner is in the process of returning rights to us but is there anything else I need to do? I was positive you answered this question before but in my current state of disappointment and fear I couldn't find it.
I'm assuming this is a small publisher, maybe one or two owners. If they are filing for dissolution of the business, secured creditors will get first dibs.
If the publisher owes you money, you're an unsecured creditor. You're in line with everyone else to get paid from the proceeds of the dissolution.
But, where this gets tricky is that the publishing contract the publisher has with you is an ASSET, not a liability. It's worth money.
In most bankruptcies, a business can't simply return assets before the bankruptcy is resolved.
What they can do is sell, transfer or assign assets to another company who takes on the debt as well as the assets. (When Skyhorse bought Nightshade, this is what they did.)
The first thing you're going to do is make sure that any rights reversion is in writing. Real writing, on paper, not email.
The second thing you're going to do is have your books removed from sale at once.
If you're not going to get paid from these guys, it's smart to make sure they don't get
to keep the proceeds from sales any more.
Third: Check Victoria Straus's blog for information about the publisher. If there isn't any, make her aware of this.
Fourth: beware of online hysteria about this. Writers can work themselves into a frenzy over very small things, so you won't be surprised to hear that it's frenzy to the nth power when something like this which really does matter. A lot of terminology gets thrown around by people who are well-meaning, worried, and badly informed. Take most of what you hear with more than a grain of salt.
Depending on where you are in the publishing process you now have a book that has been published but can no longer be offered for sale, or a book that has NOT been published, and the rights have returned to you.
It's easier to resell the second. If you query, you say "this was accepted for publication by SinkSankSuck Publisher who have recently declared bankruptcy and all rights returned to me." You put that at the bottom of the query along with your bio and writing credits. In other words, don't lead with it. It's not a selling point.
If you have actual books for sale, and the rights have been returned, you're better off querying a second book, and then discussing the first (or previous) books with the agent or publisher who is interested in the New Book.
Most important: this will not kill you. It might not make you stronger (god knows I'd be Serena Williams if setbacks really made you stronger) but it's not a death knell for your career or for your books.
Get everything in writing from the publisher. Save EVERYTHING. Be calm in your communications. The publisher is probably hysterical at this point with fear and shame, not to mention in a panic over money. They're not going to be calm about anything most likely. That doesn't mean you respond in kind.
You WILL get through this, and if my experience with publisher's bankruptcies is any indicator, you'll be better off in a year than you are now.