For months, the children’s publishing community has been communicating about Albert Whitman & Co. not paying authors their royalties in a timely fashion, amplified by a lack of responsiveness to their agents. Last week, the complaints spilled onto social media after Joan He, whose debut novel, Descendant of the Crane, was published by the Chicagoland company in 2019, posted a series of tweets about her experience. After AW&C failed to pay her royalties, she tweeted, her agent [John Cusick] notified the press three months later that the rights to her YA fantasy novel reverted back to He, “per a clause in my contract.”

“After we notified the publisher that rights had reverted back to me,” she tweeted, “they went ahead and released my paperback anyway. You can find it on shelves. You can see it (and ALL the editions they’re not allowed to sell anymore) on every online retail site. Not only is this a gross violation of copyright, it also hurts my agent's ability to rehome the book at a place that values me.”

Two days later, AW&C president John Quattrocchi responded to He’s complaints with an open letter to authors that was posted on the company’s website and social media accounts. “I want and need to apologize to authors that have felt frustration with us concerning delayed payments or other issues,” he wrote. “Publishing a book should be a wonderful experience, and the fact that something Albert Whitman & Co. should have handled better tarnished that experience for you is awful.”

Quattrocchi also promised to be more transparent in the future in communications with authors and illustrators and their agents regarding payment schedules, adding, “Further, we’re discussing internally how to change our procedures, so this doesn’t continue to be an issue.”

Quattrocchi reported in his open letter that He’s royalties are now paid up to date and that AW&C’s attorney is in discussions about He’s contract with her attorney. Contending in an email to PW that AW&C is not in violation of the contract with He, the press continues to sell all editions of Descendant of the Crane, including the paperback, which was published in September.

In an interview with PW, Quattrocchi, says he takes “full responsibility for what happened,” and attributed the late payments to authors on AW&C’s switch from its own distribution to IPG in early 2018. “What happens when you have a distributor, because they're collecting the cash, they hold your money,” he explained. “They ended up holding our money for an extra 45 days. When our cash flow slows down, it slows down who we can pay.”

But according to IPG CEO Joe Matthews, who noted that IPG's standard payment terms are consistent with other book distributors, IPG ceased distributing AW&C titles as of Dec. 31, 2019. "If Albert Whitman’s receivables were delayed 45 days when distribution started," he pointed out, "They should have seen a 45-day windfall on cash flow when distribution ended at the end of 2019."

Looking at AW&C's website, it appears that the press once again handles its distribution; the 1,000 titles in print are also available from wholesalers.

Describing AW&C as a “sub-$10 million company with 20 employees” that has made a profit for the entire 12 years that he has owned it, Quattrocchi insisted during the interview, “Just because cash flow is tight doesn’t mean you’re losing money or going out of business. The reason cash flow is tight for us is: we can ship the books, but if we don’t collect from our customers, it’s very hard for us to pay others.”

Asked about complaints received by PW of irregularities in statements, Quattrocchi said the reports that the company’s royalty system generates “are not the best” and promised that AW&C is committed to correcting any errors brought to their attention.

Quattrocchi added that the company has formed a “small inter-departmental team from marketing, editorial, and operations” to more quickly respond to author and agent complaints. “Part of what is going to come out of this,” he declared, “is if anyone has any issues—bring them up and we’ll get them resolved.”

Tip of the Iceberg?

As far as some industry professionals and authors are concerned, though, Quattrocchi’s public mea culpa and his establishment of an internal oversight committee should have happened much earlier, as the problems pre-date 2018 and have continued even after the 101-year-old company, best known for publishing the classic Boxcar Children novels for middle grade readers, resumed its own distribution. Founded in 1919, AW&C was acquired in 2008 by Quattrocchi and his business partner, Pat McPartland. The company expanded its list of children's books by launching a YA imprint, Albert Whitman Teen, in 2011.

A half-dozen literary agents, as well as six authors and a few former employees, have been in contact with PW this fall, alleging—some presenting documentation to back up their claims—that He’s experience is not an anomaly, and that the company has for years treated authors and illustrators cavalierly, both in terms of paying royalties and in its lack of transparency. Authors who spoke with PW said that they’ve repeatedly contacted the Authors Guild for assistance and agents said they have complained to the Association of Authors’ Representatives. The AAR issued an alert about AW&C to its membership in March 2018 and again on June 1 of this year.

“The reported delays are with both royalty and advance payments,” stated the June AAR alert that was emailed to members. “We are told that some payments and statements are ultimately sent but only with persistent follow-up by the author’s agent; some agents are still waiting. The Royalties Committee has reached out twice this year to the leadership at Albert Whitman to convey our concerns about these reports and we have received no response.” According to AAR representative Laura Dail, who owns an eponymous literary agency, AAR has not received any communication from AW&C since that alert was sent almost six months ago.

Disclosing to them that she was acting at the request of "at least three agents," SCBWI executive director Lin Oliver sent an email in May to AW&C business director Joe Campbell and publishing director Sue Tarsky, reproving them for nonpayment of royalties, and suggesting that SCBWI will pull AW&C from its guides and directories of recommended publishers if the problems persist. The SCBWI has not taken further action since then; writing in an email to PW that the situation with AW&C "wasn't a big deal," Oliver declined to provide any more information.

This past Monday, the Authors Guild released a statement, emphasizing that it “stands with AW&C’s authors’ demands for transparency and immediate rectification of past due royalties.” Describing this as “an ongoing problem with the publisher,” the Authors Guild disclosed that it has for several years contacted AW&C “on numerous occasions” to convey its concerns about late payments and inaccurate statements, including a 2019 phone conference with AW&C’s “accounting team and leadership.”

“The irregularities are not limited to one author or one instance,” the statement declares, “but multiple authors with multiple complaints. This practice is unfair and should not be tolerated, nor does it befit a publisher like AW&C, which has a storied history in the children’s book publishing world.”

One longtime author of books published by AW&C who requested anonymity told PW, “Everything changed almost immediately when John Quattrocchi and Pat McPartland took over from Joe Boyd in 2008,” and that she has written “46,000 words” about her experience. She calls this her “therapy to try and deal with everything that happened,” including being paid $10,000 in royalties eight months late, and not being paid for foreign sales. “I have repeatedly asked for a full accounting of subsidiary rights sales. They refuse to send them,” she said. “I've never seen the deal, so I don’t know if it was an outright sale or advance/royalties.” She once hired a New York City accountant to conduct an audit, but AW&C requires that any audit be conducted at its Park Ridge offices only, “so I dropped it.”

When Cornelia Maude Spelman’s picture book, When I Feel Worried, won the 2013 Best International Children’s Book Award at the Sharjah International Book Fair, not only was she not informed of this accolade, but, according to a Nov. 7, 2013 PW report on the fair, Quattrocchi traveled to the U.A.E. and accepted the award on her behalf.

Adding insult to injury, Spelman never saw any of the prize money that came with this award. “I talked numerous times to a lawyer about suing, but I just don’t have the funds,” said Spelman, whose books, AW&C’s current catalogue proclaims, are evergreen bestsellers.

Upon recommendation of a lawyer, Spelman once hired a forensic auditor. “He said he found the royalty statements more confusing than any he had seen,” she recalled. “He had no way of checking if I’d received what I was owed without knowing who AW&C had signed with for subsidiary rights. They continuously send statements that are missing information.”

YA Authors Speak Up

Another author, Elizabeth Briggs, reported that she and her agent raised questions about incorrect statements and late payments for her second dystopian YA novel in a trilogy, Future Threat, published in 2017. When planning the last novel in the series, Future Lost, a year later, Albert Whitman initially declined to publish in hardcover even though the first novel in the series, Future Shock, was a New York Times bestseller. It ended up publishing “a small batch” along with the paperback edition only after she threatened to sue for breach of contract. “When the third book came out, there was very minimal marketing,” she recalled. “I was on their shit list.”

After not being paid in a timely fashion, as well as “some weird accounting” issues regarding audiobook and e-book sales, Briggs’s agent demanded last year the reversion of the rights to her books: to date, the rights still have not reverted, although payments are up-to-date. Briggs now self-publishes her paranormal and fantasy romances.

“I don’t even care about the money issues,” she said. “I just couldn’t deal with the stress. It’s a challenge to get them to admit they make all these accounting errors.”

Katherine Locke, who published two novels with AW&C but withdrew their third option novel from consideration there, told PW, “I don’t know anyone who isn’t having some problem with them.” In their case, they say, not only are royalties often late, but there invariably are “accounting problems,” such as sales of certain editions not being counted towards their advance; this issue has now been resolved. “Every six months, it’s a nightmare,” Locke said. “It’s exhausting and emotionally draining. They refused to abide by the contract with regard to reserve against returns. I feel like I lost 18 months of my career to them.”

Quattrocchi referred to Locke by name during his interview with PW, declaring that he “doubts” that AW&C will publish Locke’s third novel and that if they want the rights back to their Balloonmakers duology, Girl with the Red Balloon and Spy with the Red Balloon, he is “open to a conversation. It’s not worth the trouble. We wouldn’t hold something to be difficult.”

Former Employees Make Allegations

Two former AW&C employees who requested anonymity allege that in their experience this kind of treatment of authors not only goes back for almost a decade, but was standard practice in dealings with vendors as well. One former employee recalled that late payments to authors were “a huge problem,” but when she brought it to the co-owners’ attention, they assured her it was temporary. “Or they would say the payment issues were exaggerated or that the people asking for money were just difficult,” she recalled. “Missing payments happened for authors, illustrators, sales reps, printers, advertisers, you name it. There was also a lot of withholding information on rights sales and stuff like that.”

She remembers AW&C executives often blaming the U.S. Postal Service when demands were made for payment, claiming that the Park Ridge Post Office “was really bad and the check must have been lost in the mail. I cannot tell you how many ‘lost checks’ happened over the course of the time I worked there.”

When asked if AW&C executives have blamed the U.S. Postal Service for delays in payments, Quattrocchi denied this and reiterated that AW&C must depend on being paid by its distributor and customers before it can in turn pay its authors.

The second former employee, who worked there more recently than the first, said that the “accounting issues” throughout her tenure there “seemed like it had been going on for a long time. By the time I left, a significant and highly inappropriate portion of my job had become trying to find money for people, to the point that it was causing me serious emotional distress.” Recalling that “there were always excuses about what was happening with the money,” she claims that funds would be diverted “to the most immediate needs,” i.e., authors who were threatening legal action.

“I was caught in a constant game of runaround,” she said, “much like the agents who were looking for money were too. Meanwhile, management continued to spend money on things that were not contractually owed, like redesigning and rebranding the company logos.”

Agents Advocate for Clients

Most of the agents PW spoke to requested anonymity so as to not potentially expose their clients to retribution, but one agent provided documentation from more than a dozen other agents relating their own unsatisfactory experiences dealing with AW&C.

“It’s been a rocky road with them,” stated one agent PW spoke with, who has had one client sign with AW&C and vows never again to submit another manuscript. “Every royalty statement we’ve received from them was late and wrong and they’re not responsive. Working with them is like being in an abusive relationship.”

Erin Murphy, who owns an eponymous literary agency, describes herself as having to repeatedly “chase payments and statements” from AW&C and says her requests for payment are usually met with excuses, including the one that the former employee cited, that the check is missing in the mail and another check will have be cut. She told PW that Quattrocchi’s public letter was “the first time I’ve ever read anything by him, and he’s been copied on all the correspondence. And there is a lot of correspondence.”

Like most of the agents PW communicated with, Murphy insists she will not submit another manuscript to AW&C, “unless I have some sense that their ethics have changed.” Murphy, who has been waiting for six months for information from AW&C about a client’s audiobook licensing and sales, recalls “grinding my teeth” during the company’s 100th anniversary celebration at the 2019 Bologna Book Fair. “I remember thinking, you can do all this, champagne, the works, but can’t even pay your authors?”

UPDATE: Lin Oliver, executive director of SCBWI, reached out to PW on Wednesday to clarify that when she responded to our inquiry with the words, "it wasn't a big deal," she meant that the issue she had raised with AW&C had been "resolved professionally and in a timely manner." SCBWI emphasizes that author and illustrator payouts by their publishers are “essential and at the heart of our industry.” To that end, SCBWI has deleted AW&C from the market survey published in THE BOOK: An Essential Guide to Publishing for Children. Oliver promises that this ban will remain in effect “until we can be sure that AW&C has corrected its process for paying writers and illustrators in a timely and full fashion. SCBWI stands behind writers and illustrators who deserve to be paid according to the terms of their contracts.”