I received this email over the weekend from Anastassiya at Mobile Stream which adds some detail to the Mobihand situation.
For many years, we at www.mobile-stream.com have been developing mobile apps. Our palm apps such as Landscape for Sony Clie, Card Reader and USB Modem have been among best-selling apps with PalmGear and other resellers. Our Android app EasyTether is very popular at Google Play store and Amazon. We've sold our apps via MobiHand, unfortunately.
Now it is almost a year since I've been trying to get our earned royalties from MobiHand. In October 2011 they simply stopped paying saying they have no money. Which was obviously fishy. Because they billed customers, got 100% money from the buyers, but then did not pay to developers. I've been waiting for months, no result. In February 2012 I filed a lawsuit with San Mateo court, lawsuit number is CIV511913. You can check the lawsuit at the court website (type in MobiHand in the search field).
After the court settlement they started to pay something, by that time they had been using my royalties for many months "to finance their new projects". And we, developers, had to support customers without being paid.
Then MobiHand defaulted even on the court's settlement (as can be seen from the court website). Now as they filed for bankruptcy, I'm simply without money, with thousands of customers to support. Their debt is $20667, to say nothing of the interests for using our royalties for a year!
They did not inform me of their bankruptcy, they simply purged all statistics and reports from their website (though the agreement required a 30-day notice). Of course, no explanation why they decided to cheat a developer with popular apps who helped them to earn much money.
There are other developers who suffered from their unpayment, though their debts are much smaller.
This case creates a dangerous precedent: any app store, any payment processing company, any reseller can at any time stop paying and there will be no punishment. Then they declare themselves bankrupt and developers are left with losses, without money and with many customers to support.