Guy asks what to do about rights to a book, when you can't find the heirs of a deceased author, and the publisher is defunct.
From both a legal and an ethical standpoint, you have to get the rights. You wouldn't go ahead and build a house on land you don't own, just because you can't find the owner… the same goes here.
It sometimes is difficult or even impossible to track down the author, or the heirs of the author of a work, but if the work is covered by copyright, it's still an infringement if you base your work on that material.
This is what's called the “orphan works” problem, and it's been a somewhat controversial topic in the legal, regulatory and legislative world for the past few years. Some of the proposals out there would have a sort-of escrow system set up, so if you've made a good-faith effort to find the owner, but can't you put a reasonable license fee in escrow, and if they later surface, they can access that money. The problem is, what if that copyright holder would have refused ANY amount of money, and just doesn't want a movie made based on his book, poem, or whatever. That's his right under copyright, and this rule would take away that right.
There are some other proposals out there, and you can read more about the whole situation at a pretty good website called ORPHANWORKS.NET.
Congress hasn't been able to pass legislation on the issue yet, despite trying several times, so for now, the rule is still that you have to have the permission..
. So, you've got to find the copyright holder. That may be the author's heirs, or it could be the publisher, and if the publisher's gone out of business, someone or some company probably did acquire the rights to that publisher's catalog. That someone is called the “successor in interest”. Usually, the government records relating to the closing of the company will give some indication of who took over the assets. This can mean trips to various government archives, courthouses, etc., and it's fairly detailed legal investigative work…
But, start with a search of the copyright office records. For newer works, (those created since 1978), they're computerized and searchable online at copyright.gov (assuming the work was registered..). For older works, this is going to mean a trip to the library of congress… you can hire a service to do the search for you… But ultimately, you've got to keep trying.