The police can't arrest you for breach of contract, can they? I take illegal to mean contrary to criminal law.

As we don't have copies of the contracts, we don't know what rights people may have signed away, but royalties are unlikely to have been one of them!

I still don't understand what kind of business it is to sit on something worth money for so many years. Maybe that's why I'm not rich (look at Centre Point in London).

Over the years, these recordings could have made plenty of money, even if the royalties were paid.