CGL Speculation #7 Options

[otakusensei]

You're reading more into the declaration than is warranted. Lawyers on deadlines write to convey the points they need to convey. They're not perfect and neither is their prose. To me, that passage was meant to convey that IMR's counsel didn't have an opportunity to speak with key figures until AFTER speaking with the petitioners' counsel. It very strongly doubt it was intended to suggest that the Colemans are the sole owners of the LLC.

Ok, makes sense. Being on the outside like I am it's interesting to get a look at who's involved where and how it all fits together. Looks like this isn't going to hold much of that type of information.

Who the creditors are doesn't really matter. The number is important as a matter of law. A person with fewer than 12 creditors can be forced into bankruptcy by a single creditor. A person with more than 12 creditors may only be forced into bankruptcy by a group of three or more creditor petitioners.

So that number looks like an absolute then? In that case either one of the creditors could sue again if any one of them settled and was no longer a creditor, right? Or do they only have to state 12 just to clarify for purposes of determining the number of creditors required to bring action?

This is ridiculous. Lawyers don't need to know everything up front. In fact, lawyers' ethical codes dictate that they only request the confidential information that's necessary to decide whether to accept or decline a client. YOU most certainly don't need to be worried for their firm. They're going to get paid by the hour and they're priority creditors in the event that the bankruptcy goes through. If IMR want's to undermine the work of counsel by providing insufficient info, that's their problem, not an issue for the firm.

Cool, shows what I know. Thankfully I've had very little contact with the legal system. The less people that get hurt by this mess the better.

[Jaid]

I don't know if it's a matter of proofing or if the process itself needs to be revamped. I can speak from experience about catching simple typographic editors, documenting them, and seeing them still make it into final product.

how does one fit an editor into a book? it seems to me the packaging would not hold the editor in (IMG:style_emoticons/default/nyahnyah.gif) (IMG:style_emoticons/default/wink.gif)

[Deadmannumberone]

So that number looks like an absolute then? In that case either one of the creditors could sue again if any one of them settled and was no longer a creditor, right? Or do they only have to state 12 just to clarify for purposes of determining the number of creditors required to bring action?

12 is a cut-off. Less than 12, one set of requirements, more than 12, a different set of requirements.

[otakusensei]

12 is a cut-off. Less than 12, one set of requirements, more than 12, a different set of requirements.

Right, that's what urgru pointed out. So basically all the lawyer asks is "Do you have 12 creditors?" and they say "Yes"? Makes sense given what urgru said about confidential information.

[Mesh]

Looks like the 12 creditor issue is IMR's attempted defense. 12+ creditors requires 3+ petitioners to bankrupt them. So IMR is trying to say some of those 3 petitioners don't have a legitimate creditor claim. If successful, the petition to bankrupt them fails.

I wonder if that could backfire. IMR proves two of the three are not creditors thereby lowering their total creditors to less than 12. This changes the requirement to only one petitioner which leaves them more definitively vulnerable to being bankrupted.

Mesh

[otakusensei]

Looks like the 12 creditor issue is IMR's attempted defense. 12+ creditors requires 3+ petitioners to bankrupt them. So IMR is trying to say some of those 3 petitioners don't have a legitimate creditor claim. If successful, the petition to bankrupt them fails.

I wonder if that could backfire. IMR proves two of the three are not creditors thereby lowering their total creditors to less than 12. This changes the requirement to only one petitioner which leaves them more definitively vulnerable to being bankrupted.

Mesh

Well, unless they have more than 12 and only need to state that they have at least 12. Then if they knock out one creditor this particular action is over. That is unless some others creditors jointed during the course of this last week, which we should have heard about. I'm waiting to see if anything is filed from the other side.

[urgru]

So that number looks like an absolute then? In that case either one of the creditors could sue again if any one of them settled and was no longer a creditor, right? Or do they only have to state 12 just to clarify for purposes of determining the number of creditors required to bring action?

This was apparently just to establish that the debtor has more than 12 creditors. When a person has more than 12 creditors, at least three creditors with qualifying claims must join a petition to involuntarily move them into bankruptcy. In theory, a debtor with more than 12 creditors can defeat a petition by knocking out petitioning creditors until fewer than three remain. That general principle is subject to some qualifiers and may or may not actually bear on IMR's case, but that's why you're seeing the number 12 kicked around.

Looks like the 12 creditor issue is IMR's attempted defense. 12+ creditors requires 3+ petitioners to bankrupt them. So IMR is trying to say some of those 3 petitioners don't have a legitimate creditor claim. If successful, the petition to bankrupt them fails.

I wonder if that could backfire. IMR proves two of the three are not creditors thereby lowering their total creditors to less than 12. This changes the requirement to only one petitioner which leaves them more definitively vulnerable to being bankrupted.

There's a difference between demonstrating someone isn't a creditor (you really don't owe them any money) and that someone's a creditor whose claim isn't of the sort that allows them to petition for an involuntary bankruptcy.

You build a house for me. We have no written contract. There's just an oral agreement that you're to be paid on a sliding scale based on when the house is "complete." You finish it, but I think the work is sub-par and refuse to move in until you make some changes. You do, even though you think the house was fine originally, but I still don't pay. I definitely owe you money . . . but we disagree about when/whether the house was "complete" and, as a result, what you're owed. If the court thinks there's a bona fide dispute as to the amount owed, you're going to have to resolve the dispute somehow - suing, settling, something - before you can pursue the bankruptcy [this is a massively oversimplified example; assume I'm otherwise a viable involuntary bankruptcy target b/c I'm not paying other bills, etc. etc. etc.]

You're right to identify that the number of creditors can move around, though. There are situations in which people don't count. If they're given preferential payments to convince them not to join a petition, if they're employees or insiders, etc. It's certainly possible for someone to owe money to 20 people and end up being subject to a single-party involuntary bankruptcy because a number of the folks owed end up being classified as employees, because they were bought off with partial payments, or some such.

STANDARD QUALIFIER: I'm commenting generally and not with respect to the Wildfire/IMR case.

[Dixie Flatline]

I can't believe that no one has commented on the fact that SR and BT bring home about 1.2 million bucks a year! I no want the license!

That's actually not very much for two global properties with decades of pedigree.

When I started my business, me and one other network engineer did a quarter million dollars in business in about 6 months without many clients.

What a 1.2 million dollar a year total revenue stream tells *me* is that it's even less likely that over 2-3 years you could pull 25% of a company's total revenue out by "comingling" and have nobody notice the "unintentional oversight".

[Rojo]

Well, guys-

I went to the hearing this morning on the motion. It was a motion hour so there were 14 different motions before the judge, who apparently is going to retire next month. He was quite funny when the lawyers got wordy. He was pretty much heckling them into getting to the point. IMR was the 13th out of 14 motions before the court. I got to listen to a bunch of lawyers discuss things like selling Motels and 10 million dollar real-estate portfolios.

BTW, thanks for the suggestion on getting to the Federal building early. I got to court early enough that I had five security guards to chat with as I went through security since no one else was in line.

The lawyer from IMR only spoke for 1/2 of a minute and said they filed timely. Before that the assistant for the petitioners lawyer stated they thought it was late and asked for summary judgment. The motion before the judge for summary judgment was denied. The judge didn't say anything about if the response was late or not. He simply stated "I am denying the petition for summary judgment" So IMR's part of the motion hour was maybe 1 1/2 minutes long.

At least then I got to go out to lunch in Seattle then. Not every day I get to see a Federal judge doing through 14 different cases motions in less than an hour.

Have a great day & if there are future court dates someone else gets to go. (IMG:style_emoticons/default/smile.gif)
I live out of town and just came into town to see buddies.

Rojo

[augmentin]

That's actually not very much for two global properties with decades of pedigree.

When I started my business, me and one other network engineer did a quarter million dollars in business in about 6 months without many clients.

What a 1.2 million dollar a year total revenue stream tells *me* is that it's even less likely that over 2-3 years you could pull 25% of a company's total revenue out by "comingling" and have nobody notice the "unintentional oversight".

QFT.
Anecdotally, my company did $1.25M in the first year that only translated to about $50K GP. Not bad for a college drop out, but certainly an example of good sales undone by poor management (mine).
Course, I have no idea what IMR's books look like and how much GP that $1.2M in revenue translates to.

[urgru]

Well, guys-

I went to the hearing this morning on the motion. It was a motion hour so there were 14 different motions before the judge, who apparently is going to retire next month. He was quite funny when the lawyers got wordy. He was pretty much heckling them into getting to the point. IMR was the 13th out of 14 motions before the court. I got to listen to a bunch of lawyers discuss things like selling Motels and 10 million dollar real-estate portfolios.

BTW, thanks for the suggestion on getting to the Federal building early. I got to court early enough that I had five security guards to chat with as I went through security since no one else was in line.

The lawyer from IMR only spoke for 1/2 of a minute and said they filed timely. Before that the assistant for the petitioners lawyer stated they thought it was late and asked for summary judgment. The motion before the judge for summary judgment was denied. The judge didn't say anything about if the response was late or not. He simply stated "I am denying the petition for summary judgment" So IMR's part of the motion hour was maybe 1 1/2 minutes long.

At least then I got to go out to lunch in Seattle then. Not every day I get to see a Federal judge doing through 14 different cases motions in less than an hour.

Have a great day & if there are future court dates someone else gets to go. (IMG:style_emoticons/default/smile.gif)
I live out of town and just came into town to see buddies.

Rojo

This is why I thought it would be good for folks to chip in for gas and food (IMG:style_emoticons/default/smile.gif)

[Endroren]

Thanks for taking one for the team, Rojo.

[emouse]

He simply stated "I am denying the petition for summary judgment"

So urgru, does this mean anything special? I'm guessing that it only means there's no conclusion yet, and that the petition will progress 'as normal' for now, with both sides submitting further evidence to support their claims for a future hearing date?

[Penta]

Yup.

[Kid Chameleon]

Well, stuck on the runway at Dulles, I'll toss out a few notes. The ownership is aware of the status of ownership. Not only am I an owner, I'm a creditor. So are some other free lancers. I don't think it's gonna drop below 12 before this bankrupcy thing is all resolved.

[otakusensei]

Motion Dismissed In Favor Of Catalyst Game Labs

Today a judge rendered his decision on the first motion in the Chapter 7 bankruptcy petition involving Catalyst Game Labs. This motion, brought by the plaintiffs, charged that Catalyst Games did not respond within the proper legal timeframe and asked for immediate relief. The judgement was for Catalyst Games, and the motion was dismissed, reinforcing the company’s position that it is handling the situation in a professional and timely manner.

Because there has been a great deal of misinformation and misunderstanding regarding the nature of this case, the company plans to release a follow-up statement to address these issues within the next few business days.

Well that sounds accurate as to the motion today, but only a fraction of the over all issue. Seems a little odd without an over all acknowledgment of the situation at hand. Also seems kind of selective given that this isn't the first time a motion for summary judgment has been denied. Over all what I expected from IMR though.

[tweak]

Motions are great devices to drive up billable hours. (IMG:style_emoticons/default/wink.gif)

[Octopiii]

Motions are great devices to drive up billable hours. (IMG:style_emoticons/default/wink.gif)

They're also great CYA devices... "I know we lost, but I did everything I legally could to win this case for you!" [points at impressive looking stack of legal documents].

...while neglecting to mention that the paralegal who typed everything up and for whom they billed the client for at $100 an hour got paid roughly $20/hour.

[tweak]

They're also great CYA devices... "I know we lost, but I did everything I legally could to win this case for you!" [points at impressive looking stack of legal documents].

...while neglecting to mention that the paralegal who typed everything up and for whom they billed the client for at $100 an hour got paid roughly $20/hour.

Paralegals get no love.

[knasser]

Paralegals get no love.

I dated a paralegal. I assure you she did.

[KnightRunner]

I dated a paralegal. I assure you she did.

Best Reply Ever!!

[LurkerOutThere]

I dated a pair'a paralegals. I assure you they did

[BeeRockxs]

Also seems kind of selective given that this isn't the first time a motion for summary judgment has been denied.

What other summar judgement motion did the judge deny?
I think it is appropriate that CGL updates the public as to the proceedings of the court case.

[LurkerOutThere]

For those of you new to the thread(s) Sensei is going to do everything in his power to spin every bit of news negatively. He will attack any press release or endeavor to pick it apart, but he will also attack the company if they don't comment all the while trying to keep up the motion of a neutral observer.

[Ancient History]

Pot calling kettle, Lurker.

I think if you've been following the documents as their links have been posted, it's clear that Catalyst's statement is at bare minimum...optimistic. The judge did not grant the creditor's motion to continue the bankruptcy without contest from IMR. The judge did not also dismiss the case with prejudice, which is what IMR wanted. While the first motion was denied, that was after the second motion had already been approved.

That doesn't mean IMR "won" or that the creditors "lost," that means it goes to an evidentiary hearing.