As Gernsback's example had shown, it was useful for a pulp or magazine publisher to create multiple publishing companies, and most did so. When trouble arose, one company could be placed into bankruptcy and have its intellectual property bought out by one of the publisher's other companies. The purchaser company would then be legally shielded from responsibility for paying the debts of the bankrupt company (even though the editors stayed the same, as did the office addresses).
Those unpaid debts included money owed to the hapless writers, some of whom were already getting a bad deal by being paid "upon publication" instead of "upon acceptance." Payment upon publication forced writers to wait weeks and months for their payments, with no guarantee that their work would ever see print. It was a delaying tactic that allowed publishers to build and manage inventory at no cost while holding onto their money longer—maybe even long enough to see the debt discharged in bankruptcy.
A more insidious practice was (to use a modern term) to "repurpose" an author's work: present it as original material by changing the title and the character's names—and stripping away the original copyright notice.
The trade magazines of the late 1920s and early 1930s are overflowing with complaints from writers who had been so victimized. One of the chief practitioners of such dirty dodges was Harry Donenfeld, the future publisher of DC Comics, the main rival of Marvel Comics to this day.
—Blake Bell and Dr. Michael J. Vassallo, The Secret History of Marvel Comics (Fantagraphics, 2013): pg. 18.
Martin Goodman, founder of Marvel Comics, would do the same:
It took two years, but on January 5, 1942, the FTC slammed both Goodman and Silberkleit for deceptively reprinting stories as new fiction, substituting new titles for the original titles, changing the names of characters and, "without obtaining the sanction or authorization of the authors of stories, [substituting] pseudonyms or so-called 'house names' for the authors' names or pen names." They were also sanctioned for stripping the original copyrights and claiming the work as their own.
Over the next two decades, three more FTC judgments against Goodman would follow. (Ibid., pg. 28-29.)
Gernsback, it's worth noting, is Hugo Gernsback, publisher of Amazing Stories and namesake of the Hugo Awards. Silberkleit is Louis Silberkleit, the L in MLJ Magazines, the precursor of Archie Comics.