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[Method]

Once again, please try to stay on topic. Also, please review the ToS and post appropriately. Thanks!

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[shark_sandwich]

I'm new to Dumpshock, and I have been following this thread for a while (mostly to see when Vice might be available). For what it's worth, here's my lawyer hat analysis.

I don't know what Randall Bills's exact role in IMR is legally, but assuming he is an officer of the corporation in some capacity, he has a legally enforceable duty to try to get value for the owners of the company. At this point, the only asset IMR really has (as I understand it) is the licenses to produce Battletech and Shadowrun materials--without that license, there is no way for IMR to make money, and no way for the owners to get any value. Thus, Bills has a duty to try to hold on to the license, and take actions consistent with that goal.

People in a situation like Bills's, or really any kind of business decision, are evaluated by something called the Business Judgment Rule. The long and short of the BJR is corporate officers cannot be retroactively held liable for wrong decisions, or even stupid decisions, as long as there is some justification for the action at the time the action was taken. This is to avoid hindsight bias, and to prevent judges from having to evaluating business decisions, which they are likely not qualified to do.

As a pure hypothetical, let's say Bills was told by the "titans of the industry" that "Coleman is tight with the Topps people---if you push him out, you won't get the license from them. Period." Under that circumstance, Bills probably has an obligation to keep Coleman around---firing Coleman as a moral statement, knowing that it would lead to the collapse of the company, is potentially a breach of fiduciary duty. The exact opposite situation works the same way---if he was told "Topps won't renew you unless Coleman goes", he has an obligation to get rid of him (to the extent he can).

The middle path, where the unnamed "titans" tell Bills "I think your chances of keeping the license are greater with Coleman than without him", is probably enough to protect Bills's decision under the BJR. In fact, it's pretty much a text-book case of the BJR---Bills is acting based on the information he had at the time. Even if that information is wrong, there is a solid reason for acting the way he did.

There are many, many variables here---the exact financial situation of IMR, the ability/willingness of Coleman to make IMR whole, the relationship between Coleman and the other owners, the exact nature and reliability of these "titans", etc.---that make it impossible to truly evaluate the legal situation from the outside. However, on its face, I think Randall Bills's statement (taken as true) is perfectly reasonable and consistent with solid legal and business advice.

[Fuchs]

I'm new to Dumpshock, and I have been following this thread for a while (mostly to see when Vice might be available). For what it's worth, here's my lawyer hat analysis.

I don't know what Randall Bills's exact role in IMR is legally, but assuming he is an officer of the corporation in some capacity, he has a legally enforceable duty to try to get value for the owners of the company. At this point, the only asset IMR really has (as I understand it) is the licenses to produce Battletech and Shadowrun materials--without that license, there is no way for IMR to make money, and no way for the owners to get any value. Thus, Bills has a duty to try to hold on to the license, and take actions consistent with that goal.

IMR also has as an asset the money Coleman owes them, as far as I understand.

[Dread Moores]

IMR also has as an asset the money Coleman owes them, as far as I understand.

Well, if they can't get that money any time soon, it's not too much of an asset. (IMG:style_emoticons/default/smile.gif)

[shark_sandwich]

IMR also has as an asset the money Coleman owes them, as far as I understand.

True, but if the money is gone, then that asset may be more illusory than real. It is difficult and time-consuming to force people to sell their house to liquidate debts, the solution that has been thrown around in this and other threads. On the other hand, it is pretty clear that the licenses are viable and capable of generating income going forward. If you have to pick between getting the licenses and getting the money you are owed, it's not unreasonable to prioritize getting the licenses, even if that means writing off some of the debt. Again, without knowing the books in detail, it is tough to say what makes sense.

I guess my point is that Bills's letter seems internally consistent to me. In other words, if the facts stated in the letter are true (new controls on the finances, the advice from the "titans", some process for Coleman returning the money), then the course of action that Bills took seems to flow logically from those facts. Whether the facts are true or not, I have no way of knowing.

[Dixie Flatline]

What if he made certain he will? Should Randall ruin himself and his company (and the other owners' ownership, not to mention the fees they'd have to pay) over what is most eye for an eye?

You make it sound like dissolving a partnership (which is what an LLC is aside from some legal and tax considerations) is a catastrophic thing. It's not.

In fact, even if there's stipulations for removing an owner from the LLC, it's probably easier to dissolve it and reform it. I can generate a couple LLCs in about a day if I put my mind to it. Within a couple weeks I'd have my tax number, my DBA certificate, and a few other things, and I'd be good to go.

Often times leaving things as is for the sake of not ripping the partnership apart does far more damage than dissolving the goddamn company and starting over again.

And I am speaking from personal experience with LLCs and businesses here.

[ClemulusRex]

I really only know of two Titans of the Gaming Industry who are still alive:
Steve Jackson and Kevin Siembeida. Some MIGHT consider Jordan Weisman
a "Titan of the Industry" as well, but since he is no longer part of the gaming
industry.

Weisman was my first guess. Maybe he's not in the game anymore, but his obvious connection to Topps, the games in question, and the people involved makes me think that there's a 99.99% chance that he is one of these 'titans' mentioned.

That said, Caine Hazen's response might be correct and thinking in terms of strictly tabletop gaming might be too narrow.

[Adam]

I really only know of two Titans of the Gaming Industry who are still alive:
Steve Jackson and Kevin Siembeida. Some MIGHT consider Jordan Weisman
a "Titan of the Industry" as well, but since he is no longer part of the gaming
industry.

I dare suggest that there are at least a good handful of names that could be added to this list if you have knowledge of the modern game industry. (IMG:style_emoticons/default/wink.gif)

[ClemulusRex]

I dare suggest that there are at least a good handful of names that could be added to this list if you have knowledge of the modern game industry. (IMG:style_emoticons/default/wink.gif)

Hmm. True, the industry's landscape has changed a lot in the last ten years and I haven't always kept myself in the know. Cardul might have had the same assumption that I did in thinking that 'Titan' meant somebody from 'back in the day' that was still alive and kicking.

[Kid Chameleon]

Hmm. True, the industry's landscape has changed a lot in the last ten years and I haven't always kept myself in the know. Cardul might have had the same assumption that I did in thinking that 'Titan' meant somebody from 'back in the day' that was still alive and kicking.

I guess we could rule out Gary Gygax then. (IMG:style_emoticons/default/rotate.gif)

[Mistwalker]

I have been following this from the beginning.

As everyone else here, I do not have all the facts. I am however willing to extend the benefit of the doubt to Mr Coleman and Mr Bills.

Frank Trollman reported a few things accurately, got other things wrong and speculated on a whole lot more. Yet for some reason, his speculation is being taken at face value.

No one knows what the draws were used for, nor how much belonged to Mr Coleman directly. Yet a lot of people have leapt to the conclusion that all of that money was inappropriately taken. Someone correct me if I am wrong, but none of those accusing Mr Coleman know him well, most if not all, only as a name, yet seem to know his thoughts in all of this. Strange that.

Some has asked why he has not made any statements. I have seen that anyone that says anything favorable towards CGL is hammered here and when Jason makes statement, he is often attacked as a spin doctor and a liar. For those that are angry, and especially those that would like to see the company go down, is there anything that he could say that would satisfy or pacify you (besides “I resign”)?

Yes, I know that there have been issues on payments to the freelancers. Jason has stated that he is working to make sure that they get paid. Freelancers have been getting checks. Due to the fact that I have a level 4 gremlins limited to regular mail, the contract that I signed and returned never seemed to have made it to CGL (this mail thing happens a lot to me, so I believe CGL when they say they never received it). I sent in a new copy and received a check in less than a week. Could that not be taken as a sign of change?

A couple of facts about GenCon 2009
1) The game demonstration team were supposed to get bowling shirts (golf shirt?) instead of the usual T-shirts that were already paid for but never delivered (if I remember correctly, it was a Chinese company that went under and a few game companies lost a bit on clothing items).
2) the CGL Battetech cage was broken into and some items stolen. I know that Loren Colemen paid for the replacement of some personal items of at least one demonstration team member.

This is speculation on my part, an alternate variant on some of the things being bandied about.

Some have stated that the revenues from the conventions were/are not accurate, as they should have brought in a lot more money than they did. Is it not possible that Mr Coleman considered the cost of replacing the items and of the bowling shirts to be convention expenses, hence a lower than expected revenue/profit?

Let’s take this scenario a little farther and for the sake of argument, say that the two items are worth 10k. Further, that Jennifer Harding does not consider these items to be convention costs. Loren Coleman does and tells Jennifer to list them as such on the reports to Topps. Jennifer reviews her accounting books/notes/jurisprudence/etc... and decides that she cannot in good consciousness agree with Mr Coleman. Mr Coleman has a different interpretation of how the industry works, what is legal and what Topps is agreeable to or will find acceptable. End result, Jennifer hands in her resignation for ethical reasons (please recall that she has stated several times that she will leave it to the courts (lawyers?) to decide if the request was illegal or not, if it ever goes that far).

Several have attack Randall Bills because while he is angry with Loren Coleman, he has decided to forgive him. I have not seen anything that has stated why he was angry with Loren Coleman. A lot seem to have jumped to the conclusion that it was because “He stole/embezzled $700 000".

Here is another alternate scenario.
Randall: Loren, the finances seem to be off, could you look into them and also make sure that the freelancers are paid up?
Loren: Sure Randall, no problem. I just have to finish xxxxx.
Loren gets distracted, puts off doing the bookkeeping /record keeping that he dislikes, then forgets about it. Later, when things still seem to be off, CGL does a full audit. This audit reveals several issues, which could have been avoided if Loren had not put off doing the books. Randall is understandably pissed as not only is there a mess to clean up internally, but someone leaked it to the public and now energy that could have put to better use getting product out the door is now being spend on fixing the messes.

I have used the same facts and information that others have access to, but can draw different conclusions.

Give it another few weeks and everyone will know how Topps feels about this and if the licenses are renewed.

Hmm, I wonder how long it will be before I get hammered? (IMG:style_emoticons/default/spin.gif)

[Jaid]

wow... that's a *really* generous interpretation of events. personally, i wouldn't go that far.

i do agree with the point that we don't really know everything that's happening, and that we have quite likely got some information wrong. but i don't think it even could go that far if you allow the most generous interpretation of what happened. the fact that randall bills never refers to anything else in the letter to the freelancers that randall would have been mad at loren l coleman for (and remember people, add in the L so that you don't generate rabid hatred for the zoologist unfairly) strongly implies that the situation was not coleman forgetting to check the books.

but as a thought exercise in showing that the facts we have could lead to wildly different interpretations, it isn't too bad.

[Mesh]

CGL admitted in a public statement that Coleman's withdrawals were a co-mingling of funds. What are co-mingled funds? Good question:

http://www.toolkit.com/small_business_guid...px?nid=P12_8351

[Mistwalker]

CGL admitted in a public statement that Coleman's withdrawals were a co-mingling of funds.

That is why I stated:
No one knows what the draws were used for, nor how much belonged to Mr Coleman directly. Yet a lot of people has leapt to the conclusion that all of that money was inappropriately taken

Everyone agrees that there have been errors/mistakes made. I am not disputing that fact. I have an issue with the automatic slamming of people involved without having all of the facts. Or people, with no personal knowledge of the people involved, making statements on why they did so.

[Mesh]

Read this first:

http://www.toolkit.com/small_business_guid...px?nid=P12_8351

Then come back and post.

[Tymeaus Jalynsfe...]

Read this first:

http://www.toolkit.com/small_business_guid...px?nid=P12_8351

Then come back and post.

Would love to do so, but the link goes nowhere (Tried it 3 times)... Makes it kind of hard to read...
I get a HTTP 404 Not OFund Error upon clicking the link...

Keep the Faith

[Mistwalker]

Read this first:

http://www.toolkit.com/small_business_guid...px?nid=P12_8351

Then come back and post.

Done.

Yes, it would appear that the books were not kept meticulously, with clear separation between Mr Coleman's finances and the businesses. But again, how much of that money belonged to Mr Coleman and how much did not?

Unless there is another leak, I doubt that any of us will ever know. Nor is it really any of our business.

My preference would be for the mess to be cleaned up, that not only are the proper accounting practices be put in place, but that they be implemented ((IMG:style_emoticons/default/smile.gif) ), and that CGL makes sure that nothing like this ever happens again.

Fix the problem, not the blame.

[Mistwalker]

Would love to do so, but the link goes nowhere (Tried it 3 times)... Makes it kind of hard to read...
I get a HTTP 404 Not OFund Error upon clicking the link...

Keep the Faith

Try the one a couple of posts above, it seems to work.

Edited for a typo

[Tymeaus Jalynsfe...]

Try the a couple of posts above, it seems to work.

Got it... Thanks...

Keep the Faith

[Mistwalker]

wow... that's a *really* generous interpretation of events. personally, i wouldn't go that far.

.......

but as a thought exercise in showing that the facts we have could lead to wildly different interpretations, it isn't too bad.

Thanks.

Then I may have been successful in illustrating that there is more than one way of reading the known facts and that all may not be doom and gloom.

I'm a bit strange in that I would rather fix the problem, not the blame. Loren L Coleman has done some good work for both Battletech and Shadowrun. Should all that be disregarded or considered non-relevant? Errors have been made. I would rather it be fixed so that those errors can never happen again. As others have mentioned, if there is a change in license holder, who says that the new people will not make the same mistakes? CGL has a very, very large incentive right now to fix the problems correctly, where a new company would not have those incentives (yeah, yeah, we won't make the same mistakes as those other guys, we're too smart for that....fast forward a few years.....)

[Dixie Flatline]

I'm a bit strange in that I would rather fix the problem, not the blame. Loren L Coleman has done some good work for both Battletech and Shadowrun. Should all that be disregarded or considered non-relevant? Errors have been made. I would rather it be fixed so that those errors can never happen again.

Oh hell I could Godwin this thread so easily right now. I'll refrain from it though.

Let's just say that there are people who have done good things that have also done lots of not-good things, and generally aren't remembered fondly.

Also, how do you fix a "willingness" to "comingle" hundreds of thousands of dollars?

I promise you, as a business owner myself, taking draws out of the company is an incredibly intentional thing to do. It doesn't happen accidentally. Nor does continuing to do it when you apparently can't/aren't paying people you owe money to.

I'll repeat. There is no way this was an accident.

That shows a malevolence and a disrespect that can't just be "fixed" by an outside entity. Unless shown otherwise, it's hard to believe there's remorse there, especially since the "comingling" continued right up until he got caught.

Again, if Coleman regretted his actions and cared for the company, he could liquidate some of his assets. That he's trying to retain his ill-gotten profit *before* doing what's right, shows that he doesn't regret his actions.

[Dread Moores]

Again, if Coleman regretted his actions and cared for the company, he could liquidate some of his assets. That he's trying to retain his ill-gotten profit *before* doing what's right, shows that he doesn't regret his actions.

I'm not trying to argue that Coleman's some kind of saint with this, but how do we know that hasn't begun to happen? What I mean is, it's unlikely that there would be press releases discussing that. And if assets, like a home, were trying to be liquidated, that does typically take some degree of time to accomplish? How would anyone, outside of those directly involved in the situation, know definitely whether or not assets are in the process of being liquidated? Unless something else leaks, how would the community here know whether or not he is currently "trying to retain his ill-gotten profit before doing what's right?"

That point has been brought up a few times, and I'm just curious, because some of the posters seem convinced this isn't happening at all. Unless I missed something, I'm just not sure how that would be clear one way or the other until more time has passed and/or more information is released.

[Tiger Eyes]

Let’s take this scenario a little farther and for the sake of argument, say that the two items are worth 10k. Further, that Jennifer Harding does not consider these items to be convention costs. Loren Coleman does and tells Jennifer to list them as such on the reports to Topps. Jennifer reviews her accounting books/notes/jurisprudence/etc... and decides that she cannot in good consciousness agree with Mr Coleman. Mr Coleman has a different interpretation of how the industry works, what is legal and what Topps is agreeable to or will find acceptable. End result, Jennifer hands in her resignation for ethical reasons (please recall that she has stated several times that she will leave it to the courts (lawyers?) to decide if the request was illegal or not, if it ever goes that far).

This is absolutely not what happened. Please don't presume I'd be so absolutely foolish as to leave over a "disagreement" on if the replacement of a stolen computer of a volunteer was a business expense.

My exact reasons have been posted before.

[Kid Chameleon]

That he's trying to retain his ill-gotten profit *before* doing what's right, shows that he doesn't regret his actions.

That is a statement that is totally incorrect. His communications with the other owners have been completely the opposite, in fact.

[shark_sandwich]

A quick point on "co-mingling of funds." While it is definitely bad and definitely something you shouldn't do, it is not the same thing as improperly taking money out of the company (i.e. embezzlement).

I have a friend who is a doctor. He owns his own practice. He was routinely using the practice's accounts to pay his wife's credit card bills and other personal expenses. This is a clear case of co-mingling funds, and it is a terrible practice for a whole host of reasons, but my friend was not taking money out of the practice that he was not entitled to, since it was all his money anyway. If you were to look at the accounts, you would see a series of draws for all sorts of stuff, which he made as opposed to doing what he should have done, which is to pay himself one lump sum from the business as profit at the end of the month or quarter or whatever.

I'm not saying that the two situations are the same---if you are one of multiple owners, you are obviously not entitled to unlimited draws. My point is only that co-mingling of funds plus draws of x amount does not necessarily equal x dollars in money improperly taken from the company if those draws were made in lieu of taking profits as an owner. You cannot simply look at the chart of draws and conclude "well, he owes the company that amount."

[Fuchs]

If a company you are part-owner of cannot pay all its bills, and yet you use it to pay your bills, then the most logical consequence is that you are taking money you do not have a right to, since you only are entitled to a part of the profits of a company.