Out of the soaps of celebrity news comes an interesting Bankruptcy issue. Last week, Judge Cristol of the Southern District of Florida found that the debtor company that owned the rights to OJ Simpson’s book, "If I Did It" was a sham corporation. The rights of the book were essentially awarded to the Goldman family.
The trustee now contends in this Motion that the debtor and its counsel represent that they do not have any copies of the manuscript. However, the trustee further contends that the manuscript was made available for download, free of charge and in .pdf format, by the gossip website TMZ.com (sorry, no link here) for two hours on June 19, 2007.
The trustee filed the emergency motion against TMZ.com (owned by Time-Warner and AOL) seeking an order holding TMZ in contempt for violating the automatic stay of 11 U.S.C. §362(a), for turnover of any manuscripts, and to appear at a 2004 examination. Fred Goldman filed a joinder to the motion, and the trustee filed a supplement. The trustee states in his supplement that his office did a google search mere minutes after the manuscript was posted on TMZ, and the number of other websites on which it was available was "staggering." (To save you the trouble – the search term was "If I Did It Leaked").
A hearing was scheduled for yesterday, June 20, 2007. The more skeptical may believe that someone gave away estate property before the trustee and Goldmans could get to it. How does a trustee seek turnover of all copies of copyright material that has already been electronically transmitted to thousands of people? How much money has been lost by the Goldmans and estate?
At an emergency hearing Wednesday, U.S. Bankruptcy Judge A. Jay Cristol said he would schedule a hearing later on whether to hold TMZ in contempt and suggested that the company — a joint venture between America Online Inc. and a Time Warner Co. subsidiary — could eventually be held financially liable for any violation.
"This may be a good thing rather than a bad thing," Cristol said, noting that the parent firms have "deep pockets."