A literary site, Dear Author, recently published an analysis of a digital publisher, Ellora’s Cave, which markets erotic/romantic fiction. That genre is undergoing booming growth right now, but Ellora’s Cave has declining revenues and is apparently failing to pay authors.

In an email to the EC authors and confirmed by the CEO Patty Marks, the sales for EC books have plummeted.

Many authors and other workers associated with the production of EC books are afraid to speak out. They email me and DM me from made up accounts and beg for secrecy. They speak of a vindictive company who will be unafraid to retaliate and many of them who are owed several thousands of dollars fear that the money may never be paid to them should any outward showing of non allegiance be discovered.

But the problems within Ellora’s Cave are deep and broad and should be brought into the light of day, not only for those existing authors and creators but for future ones. In internal emails, the CEO admits that “the drastic drop in sales has resulted in large net short term variable production losses and slow and often negative return on investment for EC on almost every new book we publish, with the exception of a handful of the highest sellers.”

The details are ugly and numerous; read the whole thing for the grisly dissection. But, you know, if your company is trying to repair damage to their reputation caused by a failure to meet contractual obligations, there is a good way to show that you are not vindictive, and a bad way.

The bad way involves suing the critic who dares to question your business. Guess which path Ellora’s Cave has taken? They’re effectively confirming Dear Author’s review.

I can’t imagine this will go well for them. Not only is Ellora’s Cave getting hit with a lot of bad press, but actually suing somebody for discussing the disastrous state of your financials sounds like an excellent way to get your financial status dragged into a court and made the subject of much probing.

It’s so stupid. In the short term, they’ve intimidated one blog into a temporary silence, while making the story spread far wider than ever before; in the long term, if they actually take this to court, they’re opening the door to an even more catastrophic publicizing of their revenue problems. Who are the idiots starting these blustery stupid lawsuits?