Vandal wrote: I sent a formal letter requesting the return of my rights to Dizzy Miss Lizzie in exchange for all back royalties. Just the rights, nothing more.
Requests don't do you a bit of good when you're dealing with a deadbeat or someone who's in financial trouble.
I'd suggest you or your attorney look at the termination provisions of your contract. Usually, there's a section that allows you to terminate following a material breach of the contract. The trick is to determine exactly what constitutes a material breach and then to follow the procedure needed to establish a breach has occurred and then either terminate the contract or use that as leverage with the publisher. At that point you can take steps to reclaim your rights to the material.
I just visited the company's website, and it's open for business as usual. Dizzy Miss Lizzie is listed on the home page for anyone to buy and that's just plain wrong. Worse, they are still inviting writers to send them manuscripts.
I'm not very up on how to use social media (I'm not even on Facebook), but I know it's possible to get people interested in your problems when you're getting ripped off. I hope you can get some greater public visibility into what's happening with these people. You'll get support from us on this Bored, but support from the literary community in general will do you a lot more good.
Good luck.