Literary agency Foundry Literary + Media dissolved in September 2020, and some authors had trouble getting paid, with reports of checks bouncing as early as last November The Authors Guild got involved, and some authors were subsequently paid by wire transfer, but others were not. The agency’s founders, Yfat Reiss Gendell and Peter McGuigan, split up to form their own separate agencies last year, YRG Partners and Ultra Literary.
Gendell initially blamed the problems with payments on the transition. The real cause of the situation remained unclear until January 18, 2021, when founder McGuigan filed suit against Gendell in New York Supreme Court, alleging breach of contract, fraud, and negligent misrepresentation. McGuigan says that Gendell criminally embezzled over $800,000 from Foundry accounts, made $45,000 in illegal charges to company credit cards, and even cut off McGuigan’s health insurance. McGuigan froze the company’s accounts when he began to suspect financial malfeasance, and says that’s the reason some client checks bounced. He also says he “dipped into his personal bank accounts to pay some of the authors he represents, but several remain unpaid because of Reiss Gendell’s obstinance, and complete disregard for the authors that she represents.”
McGuigan seeks repayment, over a million dollars in punitive damages, and that “an injunction or temporary receiver be placed over the operating and client funds account and that any and all money owed to any respective authors and clients of Foundry be immediately paid under the direction and oversight of the court or a temporary receiver.”
Gendell told Publishers Weekly, “I vehemently disagree with the allegations in the complaint and will vigorously defend against them. But in the meantime, my immediate mandate is to get payments to clients, agents, colleagues, and all of Foundry’s service providers.”
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