Restored: CGL Discussion THread Part 2 Options

[DireRadiant]

I imagine they must be having a 'good time' there this week. (IMG:style_emoticons/default/rotfl.gif)

Edit: Was looking around for some GTS news and found a posting about CGL's problem on a blog. What was particularly interesting is one of the commenters is apparently a CPA and he explained, based on the CGL statement and his own professional experience, what might have happened. It was definitely interesting.

http://www.tabletopgamingnews.com/2010/03/...1#comment-48531

Not understanding the organizational structure and tax responsibility for the business you created and are responsible for is an interesting defense.

[The Jake]

Not understanding the organizational structure and tax responsibility for the business you created and are responsible for is an interesting defense.

I look at the financial mess the U.S. is in from a far and I am constantly amazed at how your legal system allows people to get away with murder.

Here in Australia, ignorance of the law is never an excuse.

(PS: I read the link after I posted that but the comment stands).

- J.

[Cardul]

2. There are still plans to re-issue the core rulebooks. Since those plans involve the management, art, and layout people more than they do me, I'm not sure where they stand. There are some front-end costs involved in getting them out, though, so they will likely be at least slowed down.

Jason H.

Reprints are always nice. Is it really that time already, except for hte core book? SR4a continues, then, to sell better then previous editions!

[otakusensei]

1. "Likely" is a tricky word, but let me put it this way: If Catalyst can't pay its freelancers, then its future is bad. Management has told me that their intent is to pay the freelancers, and I will continue pushing for that.

2. Material for which the copyright was withheld can be included again if the freelancers so desire; material for which contracts were terminated I cannot believe will be restored, so I am making plans to replace that material. But if people feel satisfied with their treatment and want to offer their material again, I'd listen to what they had to say.

3. Communication with freelancers is part of the strategy, but in the end freelancers are professionals who deserve to be paid, and if Catalyst wants good relations with them, the company has to pay them and begin making payments on time. That has to happen for a significant period of time to build trust with those who have been alienated. Some may choose not to work for Catalyst again, and that would be understandable.

Jason H.

Thank you, Jason. I'm sorry if I was harsh in the last thread, but this is the type of information that I was looking for. I understand that you can't give hard numbers but it seems from this post that your intentions are in the right place.

[Warlordtheft]

I look at the financial mess the U.S. is in from a far and I am constantly amazed at how your legal system allows people to get away with murder.

Here in Australia, ignorance of the law is never an excuse.

(PS: I read the link after I posted that but the comment stands).

- J.

Trial by a jury of your peers, burden of proof is on the prosecution, and the proof must be beyond a reasonable doubt--that is how. Note that our judicial system is designed on the premise that we'd sooner have 10 guilty men go free rather than 1 innocent man go to jail. Is it perfect? No. Does it work most of the time? Yes.

It is also to note, that the one owner did not break any laws. He might have violated his business contract (the documents govenrning the distribution of monies CGL generates to its owners--read up on an LLC which is what InMedia is who owns CGL). The other owners that were wronged by this act have a few options, sue for breach of contract (could get expensive), arbitration (slightly less expensive, but still involves lawyers), or negotiate with the offending owner to set up a payment plan.


If they play it smart, my prediction is they will go with 3, and use the proceeds from the settlement to go to the Freelancers and creditors first. Then the other owners would get paid.

[Dwight]

Not understanding the organizational structure and tax responsibility for the business you created and are responsible for is an interesting defense.

There are technical, Latin of course, terms for it but basically there is criminal law and then there is regulatory law. I believe what he was talking about is that it would likely fall under the later. Trying to prove a crime was committed, which does require intent, is a much higher standard. He's not talking about people getting way with murder because, to start with, there hasn't been a murder.....that we know of. (IMG:style_emoticons/default/spin.gif) Secondly he did mentioned tax consequences, it will cost.

Financial/accounting screw-ups happen, people do it on their tax forms. But you make a mistake on the math adding up the numbers you put on the forms you file (I'm not sure what it's call in the US, I haven't filed one yet)? Extremely unlikely you'll do time. At the most you'll pay a relatively small penalty plus interest on the money you still owe. If you have poor record keeping and don't provide adequate documentation for what you claim? Again, you are just going to get dinged a small penalty + interest, maybe not even the penalty. Thing is if you had fabricated that expense and couldn't provide the documentation it looks a whole lot like a mistake, again nobody's going to jail....(unless you did something really stupid like forge a document, and got caught in that). Then the scale will slide all the way up where they can prove criminal intent [beyond reasonable doubt] in evading taxes in a sizable amount. Then you could very well do time in the poky, it has happened.

So incompetence is a limited criminal defense. But generally the defense can only move you down the punishment scale, potentially into the realm of simply monetary penalties.

[Rotbart van Dain...]

If they play it smart, my prediction is they will go with 3, and use the proceeds from the settlement to go to the Freelancers and creditors first. Then the other owners would get paid.

That's assuming the other owners will put their own financial damages last to save the company.

Somehow, slight doubts about that much altruism creep up.

[Dwight]

That's assuming the other owners will put their own financial damages last to save the company.

True, although an otherwise profitable business does have value. So saving the company does have some objective monetary worth to be balanced out. No way we on the outside know what that is, or what their perception of it is. But it isn't unreasonable to suspect it doesn't require some large measure altruism as motivation.

Spite is a concern though. Really weird emotions can come into play in these situations.

[DireRadiant]

Please note that I did not state in whether it was in defense of mismanagement, or breach of civil or criminal or contractual obligations. There's not enough specific detail to know more precisely. We just know something is wrong.

[Enin]

At the most you'll pay a relatively small penalty plus interest on the money you still owe. If you have poor record keeping and don't provide adequate documentation for what you claim? Again, you are just going to get dinged a small penalty + interest, maybe not even the penalty.

Please don't make the mistake of thinking the IRS will "ding" you with a "small penalty" if you make mistakes on taxes. A friend of mine that owns a small business owed in excess of $100,000 in fines and penalties for a couple years of small mistakes, and this was a little mattress shop. The IRS will come after your first born and then some. Some might say that they represent exactly what we go up against in game (IMG:style_emoticons/default/rotate.gif)

[Dwight]

Please don't make the mistake of thinking the IRS will "ding" you with a "small penalty" if you make mistakes on taxes. A friend of mine that owns a small business owed in excess of $100,000 in fines and penalties for a couple years of small mistakes, and this was a little mattress shop. The IRS will come after your first born and then some. Some might say that they represent exactly what we go up against in game (IMG:style_emoticons/default/rotate.gif)

That was talking about personal taxes, the low end. For a small typographical error or even if you run afoul of their standard interpretation of the tax code, if you filed well before deadline and it gets sorted out before the deadline, you might not even get dinged. Just owe what you normally would owe. Penalties start out much smaller than $50K. When you get into businesses, and there you are typically looking at a fair amount more cash moving around than what the net profit is, the relative size of the price of oopsies tends to go up. And if you are a small business doing the taxes yourself, rather than going through a solid accountant, well that's blood in the water. They profile for that because that's where they find people making costly mistakes and/or easily targeted amateur-hour criminals trying to cheat the system.

[Cergorach]

That was talking about personal taxes, the low end. For a small typographical error or even if you run afoul of their standard interpretation of the tax code, if you filed well before deadline and it gets sorted out before the deadline, you might not even get dinged. Just owe what you normally would owe. Penalties start out much smaller than $50K. When you get into businesses, and there you are typically looking at a fair amount more cash moving around than what the net profit is, the relative size of the price of oopsies tends to go up. And if you are a small business doing the taxes yourself, rather than going through a solid accountant, well that's blood in the water. They profile for that because that's where they find people making costly mistakes and/or easily targeted amateur-hour criminals trying to cheat the system.

This is getting way off topic, but even if you let a 'solid' accountant do the work, your still responsible for any mistakes (s)he makes (that's the way it works around here). Also, an accountant can only work with the material he receives, if you forget to give him stuff or mislabel something, your still screwed.

Also keep in mind that all those small businesses you see, aren't run by geniuses, and can't afford a 'solid' accountant. CGL isn't a large business, it's rather small. If it's turning around 2+ million a year, it's still rather small.

I find the amount of $850,000 a tad similar to the whole Paladium mess and that's why I have reservations about the rumor.

[Axl]

"I presume you know already but for anyone who doesn't Gama (Game Manufacturer's Assosciation) Trade Show." - Lurker

Actually I didn't know that.

[Dwight]

This is getting way off topic, but even if you let a 'solid' accountant do the work, your still responsible for any mistakes (s)he makes (that's the way it works around here).

Ultimately, yes. Although not necessarily criminally so. EDIT: Also, depending on your insurance policy, you might be able to recoup certain portions of it through insurance coverage. Highly situational there.

Also, an accountant can only work with the material he receives, if you forget to give him stuff or mislabel something, your still screwed.

Absolutely. Fortunately the good account will know what questions to ask and let you know up front what you need to collect [before you've had a chance throw it out].

Also keep in mind that all those small businesses you see, aren't run by geniuses, and can't afford a 'solid' accountant. CGL isn't a large business, it's rather small. If it's turning around 2+ million a year, it's still rather small.

But compared to the cost of incompetent accounting? (IMG:style_emoticons/default/biggrin.gif)

I find the amount of $850,000 a tad similar to the whole Paladium mess and that's why I have reservations about the rumor.

Frank has mentioned, I believe, two tidbits that he's largely based it on. One has to do with a per year number, over 3 years, of cash convention sales that didn't make it into company accounts. Another was some discrepancy in accounts themselves. These came from different sources. He did some multiplying and added it all up to get that number, don't know if he tacked anything onto it. I'm giving it a "order of magnitude" confidence label because sometimes numbers can get mixed up in the Telephone Game. Such as maybe "X$ over 3 years" gets switched to "X$ per year over 3 years". Also sometimes there is the blind men and an elephant issue where the convention money was also expressed, to some extent, within the accounts discrepancy of the double-entry system.

[emouse]

"I presume you know already but for anyone who doesn't Gama (Game Manufacturer's Assosciation) Trade Show." - Lurker

Actually I didn't know that.

Yeah, the industry trade show for the year, kind of like Toy Fair or CES but for games. It's where companies typically go to give retailers a look at what they'll be coming out with this year. With the two releases CGL put out over the weekend, I imagine it's made their GTS trip a lot more interesting than they would have preferred.

[Cergorach]

Frank has mentioned, I believe, two tidbits that he's largely based it on. One has to do with a per year number of cash convention sales over 3 years that didn't make it to company accounts. Another was some discrepancy in accounts themselves. These came from different sources. He did some multiplying and added it all up to get that number, don't know if he tacked anything onto it. I'm giving it a "order of magnitude" confidence label because sometimes numbers can get mixed up in the Telephone Game. Such as maybe "X$ over 3 years" gets switched to "X$ per year over 3 years". Also sometimes there is the blind men and an elephant issue where the convention money was also expressed, to some extent, within the accounts discrepancy of the double-entry system.

Or the:
"Dude! There's $85 missing from the pizza pot!"
"Mark said there's $850,00 missing!"
"Dwain's claiming there's $850,000 stolen..."
"There's $850.000 being embezzled at CGL."

Us Europeans do mess around with the comma and the dot large in numbers (IMG:style_emoticons/default/wink.gif)

[Delarn]

Delarn is sitting and is watching what comes out of CGL hat !

Let's face it, they are not in such a big pile of dung has we first thought ! So let's watch them roll it in a ball and lay their egg in. Once they hatch we will have some good stuff to talk about. Until then let's wait for devellopement.

[SecGuard]

Thanks for the update Jason, i'm feeling a bit more confident of buying the books this weekend now.

[raben-aas]

That's assuming the other owners will put their own financial damages last to save the company.
Somehow, slight doubts about that much altruism creep up.

How is saving your company altruistic?

AAS

[Rotbart van Dain...]

How is saving your company altruistic?

It's gambling on the chance of things working out – after other people got the cash.

Or you can take it and see if it works out as well – if it doesn't, well… it's limited liability and at least you got the cash.

[knasser]

True, although an otherwise profitable business does have value.

The value of a company is the perceived value of the company. This is important. In the normal run of things, the perceived value of the company is closely tied to its profitability, but in the case of fraud for example, a company can be very profitable but still regarded as not something to invest in. So if Catalyst is having financial problems then it may not matter that Shadowrun is profitable because whilst you could normally get credit based on that, if someone at the top appeared to have been embezzling those funds, I can't imagine there are many banks that would extend the credit.

[Blue DragonFly]

I for one hope everything turns out for the best. Shadowrun is my favorite game.

[Blue DragonFly]

Question---

How will this effect Eclipse Phase and Shadowrun at the cons?

[JM Hardy]

Question---

How will this effect Eclipse Phase and Shadowrun at the cons?

Last I heard the events had already been registered for Origins and GenCon, so they are on pace to proceed as they should.

Jason H.

[The Jake]

Trial by a jury of your peers, burden of proof is on the prosecution, and the proof must be beyond a reasonable doubt--that is how. Note that our judicial system is designed on the premise that we'd sooner have 10 guilty men go free rather than 1 innocent man go to jail. Is it perfect? No. Does it work most of the time? Yes.

It is also to note, that the one owner did not break any laws. He might have violated his business contract (the documents govenrning the distribution of monies CGL generates to its owners--read up on an LLC which is what InMedia is who owns CGL). The other owners that were wronged by this act have a few options, sue for breach of contract (could get expensive), arbitration (slightly less expensive, but still involves lawyers), or negotiate with the offending owner to set up a payment plan.


If they play it smart, my prediction is they will go with 3, and use the proceeds from the settlement to go to the Freelancers and creditors first. Then the other owners would get paid.

I was speaking more generally, thinking about Freddie Mac, Fannie Mae, AIG and the other debacles of Wall St traders losing billions of dollars, getting not only bailed out by the U.S. Federal Government, none of these schmucks going to jail and yet they are actually collecting annual bonuses.

But I digress. This has no relevance in a Shadowrun discussion anyway. My apologies for the tangent.

- J.