The Shaw Family Archives Ltd. filed Chapter 11 bankruptcy after a series of lawsuits threatened it's future solvency. Sam Shaw, the famous photographer who became most known for his iconic photo of Marilyn Monroe standing over a subway grate holding her billowing white dress, left his estate to various family members; but it hasn't been enough to stave off the Chapter 11 bankruptcy filing.
Before Sam Shaw died, he filed a lawsuit against his son Larry claiming that his son stole thousands of photographs, including the most famous and lucrative, the Marilyn Monroe photos. Sam Shaw died before the lawsuit could be concluded; but it was settled posthumously by his daughters.
The family struck a settlement in 2002 under which Shaw Family Archives was created to take ownership of the 500,000 photos in Sam Shaw's possession as well as 20,000 photos Larry Shaw had. Larry Shaw got a 50% ownership stake in the archives, while the sisters split the remaining 50%. In the organization's bankruptcy petition, Larry Shaw's estate-he has since died-maintains its 50% stake, but the sisters each now own 10% stakes. Other family members own the rest.
Even with that lawsuit settled, the Shaw family became entangled in more litigation. The attorneys who represented both sides of the family in the prior lawsuit sought to place liens of more than $1 million on the photographs. In 2007, a New York court upheld a ruling granting the liens on the photos and also extended the liens to any recovery of insurance proceeds related to the collection of images. Both attorneys are now listed among Shaw Family Archives' creditors in its bankruptcy petition-one is owed $488,720 plus interest, while the other has a claim for $557,505.77 plus interest.
Now in Chapter 11 bankruptcy, the family estate may be able to discharge much of their debt or at least significantly reduce the amount of money they must pay back. It's not clear whether the debtors will be forced to auction off the most lucrative Monroe photos to pay debts; but even if they are, those holding a license to use the images would not lose that right. The bankruptcy law protects non-debtors who hold a license to assets in the bankruptcy estate as long as they continue to pay royalties for their usage of the license. On the other hand, if the Shaw family is able to use less lucrative photos to pay off their debts, they will be able to protect the most valuable assets in their collection.
(source: Blogs.wsj.com )