While VDCL believed it would have been cleared on fair use grounds if the case would have continued, it’s now unable to recover its legal fees because Righthaven is “financially defunct,” the VCDL statement said. Righthaven says it has no cash and some of its last key assets — federal copyright registrations and copyright assignments from newspapers that its suits were based on — have been seized by a receiver.
How is this not in-your-face extortion with a get out of jail free card? Can anyone create a shell company, sue for extortion, and then claim bankruptcy when they fail?
They could try to pierce the corporate veil and go after Righthaven’s principals. That Righthaven was formed simply to file lawsuits might make piercing the corporate veil easier.