CGL Speculation #5, It continues Options

[Fuchs]

Consider this another way. How can Catalyst get rid of Loren L. Coleman? He has an ownership stake in the LLC that doesn't evaporate simply because ther have been questionable draws. "Uninvolving" an LLC owner/partner is non-trivially difficult. In addition to some of the accounting tricks mentioned above as tools to shift tax burdens, some of the draws could conceivably be recast as diversions from the other owners to him as part of a buyout or buydown, but that's a potentially complex transaction and may or may not be possible in Catalyst's charter state (esp. as a post facto bandaid). Lots of lawyering and accounting involved in all this, which is one reason you can't and won't see quick answers.

That's one compelling reason to get rid of him, even if it means forming a new company (and this time don't use an LLC).

[D2F]

Unless you can present all the relevant info, presenting a (very carefully chosen and formulated) part of the info is not neutral by any definition of the word. It really reminds me of a lawyer trying to present the deeds of his client in the best light possible, but going too far and ending up pretty much ignoring the real issues in a manner that makes them stand out even more.

What he stated was the gist of it. It was not complete and full information, but if you step back a bit, take deep breath and think about the situation you will realize that, as far as the consumer is concerned, the information accurately represents the current situation. Neither your tone, nor your argumentation do him justice.

[Fuchs]

If I learn of a clothes producer being accused of exploiting workers I want to know what the company is saying about this, not hear about their new fall line. As a consumer I want to know if ethically I can buy their product, and keep my conscience clean.

If I hear that apparently CGL has a history of not paying freelancer (on time, or at all), and one owner has mingled personal and corporate funds, then as a consumer, I need to know if I can support that company still by buying their product, or have to stop for ethical reasons.

[Demonseed Elite]

Consider this another way. How can Catalyst get rid of Loren L. Coleman? He has an ownership stake in the LLC that doesn't evaporate simply because ther have been questionable draws. "Uninvolving" an LLC owner/partner is non-trivially difficult. In addition to some of the accounting tricks mentioned above as tools to shift tax burdens, some of the draws could conceivably be recast as diversions from the other owners to him as part of a buyout or buydown, but that's a potentially complex transaction and may or may not be possible in Catalyst's charter state (esp. as a post facto bandaid). Lots of lawyering and accounting involved in all this, which is one reason you can't and won't see quick answers.

Removing him from ownership and removing him from operations are two separate things. I agree that removing him from ownership is tricky, but Randall Bills' letter to freelancers defends keeping Loren L. Coleman involved in the operations of Catalyst Game Labs, which personally I totally disagree with.

[Dread Moores]

Uhh...FASA had a history of not paying their freelancers on time. FanPro had similar issues. Did that stop you from buying either of their products?

It sounds as if you're more concerned about the owner's actions. And in the end, you'll need to make a personal decision on that regarding your conscience. I only point that out, because the freelancer payment issue is most definitely of concern, but not unique to CGL or this particular situation.

[Dread Moores]

Removing him from ownership and removing him from operations are two separate things. I agree that removing him from ownership is tricky, but Randall Bills' letter to freelancers defends keeping Loren L. Coleman involved in the operations of Catalyst Game Labs, which personally I totally disagree with.

Probably surprisingly to some of the folks here, I'm with DE on that one.

[Fuchs]

I do not think that Coleman would still be involved in the operations if this had happened at a public company.

[Fuchs]

Uhh...FASA had a history of not paying their freelancers on time. FanPro had similar issues. Did that stop you from buying either of their products?

It sounds as if you're more concerned about the owner's actions. And in the end, you'll need to make a personal decision on that regarding your conscience. I only point that out, because the freelancer payment issue is most definitely of concern, but not unique to CGL or this particular situation.

I didn't know about the freelancers not being paid by FASA or Fanpro, so it could not stop me at the time.

I am also concerned about the quality of the product, since I do not trust people to be capable enough to produce quality material if they demonstrate faith in people who mingle personal and corporate funds.

To put it another way: Shadowrun heavily deals with crime, megacorps, plots and intrigues. I have trouble taking anything seriously if it was written by someone who trusts Coleman after what he did. They are just too naive, in my opinion, to be working on a game as gritty and double-dealing as Shadowrun.

[urgru]

Removing him from ownership and removing him from operations are two separate things. I agree that removing him from ownership is tricky, but Randall Bills' letter to freelancers defends keeping Loren L. Coleman involved in the operations of Catalyst Game Labs, which personally I totally disagree with.

The same fundamental issues apply. Handwavium alone can't make someone with a significant ownership stake disappear from daily operations to which he's traditionally been party against his will. I'm not defending the actions of Loren L. Coleman in any way, but Randall Bill's decision to keep his friends close and Loren L. Coleman closer makes quite a bit of sense from a business perspective. Catalyst's immediate priorities are almost certainly remaining operational day-to-day, recouping funds from the Colemans, and renegotiating the SR/BT licenses. Hostile ouster doesn't further any of those short term goals. The other owners' decision to act in their own best interest shouldn't be, in my mind, taken as an endorsement of what's happened or a sign that future options are being taken off the table.

To put it another way: Shadowrun heavily deals with crime, megacorps, plots and intrigues. I have trouble taking anything seriously if it was written by someone who trusts Coleman after what he did. They are just too naive, in my opinion, to be working on a game as gritty and double-dealing as Shadowrun.

The people writing the books and the people making the business decisions are separate groups, by and large. This is a non-factor.

[Fuchs]

The people writing the books and the people making the business decisions are separate groups, by and large. This is a non-factor.

I am concerned about people trusting Coleman enough to keep writing the books writing the books.

[BTFreeLancer]

And so far no one could say why Catalyst needs Loren.

who else are they going to send to New York to talk to Topps/Tornante? I doubt the other owners are ecstatic about the choices, but Loren is likely the best chance (now DSG is gone (IMG:style_emoticons/default/frown.gif) )for keeping the licenses, which means best chance for people getting paid, and best chance for products getting shipped. For the moment. Securing the licenses is primary, dealing with the other stuff can/has to wait until that is sorted.

[Fuchs]

who else are they going to send to New York to talk to Topps/Tornante? I doubt the other owners are ecstatic about the choices, but Loren is likely the best chance (now DSG is gone (IMG:style_emoticons/default/frown.gif) )for keeping the licenses, which means best chance for people getting paid, and best chance for products getting shipped. For the moment. Securing the licenses is primary, dealing with the other stuff can/has to wait until that is sorted.

Are you serious? Sending a guy who has mingled personal and corporate funds, and who people claim has not paid the royalities Topps was due, to Topps is their best bet to get the license?

Would you trust Coleman at this point? Would anyone?

Would you want your license, and therefore your money, trusted to Coleman?

[Demonseed Elite]

Are you serious? Sending a guy who has mingled personal and corporate funds, and who people claim has not paid the royalities Topps was due, to Topps is their best bet to get the license?

It's a sorry state of affairs, but quite possibly the truth. There just aren't very many staff people still at Catalyst and out of those, I'm not sure any of them are knowledgeable in the operations to the extent that might be necessary. And it seems like the owners--aside from Loren L. Coleman--took a very hands off position on the operation of the company, meaning that no one else appears to have a clue.

It's totally, absolutely screwed up, but it could very well be the reality of the situation. Which is one reason why I haven't had much faith in InMediaRes' management.

[hermit]

It seemed to me when I read that letter that Loren L. made some calls, called in favors, and had buddies in the gaming industry put pressure on Catalyst to keep Loren around. If Catalyst would lose the license by losing Loren L., would that help them? Or if they would have trouble with distributors as a punsihment for hanging LLC out to dry?

This is a small business. Everybody knows everybody. People are friends. People help friends. It's like small town politics, I guess. You should know how corrupt and mafiose these can be.

Aside from what DE says (and I agree with him there), that may be a reason to keep LLC close for the time being.

[Fuchs]

It's a sorry state of affairs, but quite possibly the truth. There just aren't very many staff people still at Catalyst and out of those, I'm not sure any of them are knowledgeable in the operations to the extent that might be necessary. And it seems like the owners--aside from Loren L. Coleman--took a very hands off position on the operation of the company, meaning that no one else appears to have a clue.

It's totally, absolutely screwed up, but it could very well be the reality of the situation. Which is one reason why I haven't had much faith in InMediaRes' management.

If that is the truth, then Catalyst is finished. I can't see anyone who is accountable to investors being able to trust Coleman at this point.

[mycerius]

I do not think that Coleman would still be involved in the operations if this had happened at a public company.

I think this is what annoys me the most about this whole situation. And I'm not talking about the fact that LLC should be removed. I'm talking about the fact some people here (not necessarily Fuchs) keep insisting on more detailed information about what is going on. CGL is NOT a public company. We are not owners or even investors (afaik) of CGL or even IMR. We have absolutely NO right to know its internal happenings, and anything we are told we should be grateful for (if taken with a grain of salt). I am not trying to be a Catalyst apologist by any means, but I think those here that consistently keep harping for more detailed information just need to shut up. Yes, I hate the fact that this whole financial situation has threatened the life of one of my favorite games. Yes, I seriously hope that all of the freelancers get paid what they are due. Yes, I hate that we lost some good people because of this mess. Yes, I would love to know more about what exactly is going on inside CGL. No, I don't think we deserve to be told just because we are loyal fans of the game.

[BTFreeLancer]

Would you want your license, and therefore your money, trusted to Coleman?

Look at it this way; Topps is likely valuing the properties on how much revenue they brought in for WizKids, as that was when they acquired them. As such, they likely wanted someone with WK line experience at the helm. And by that, I mean MWDA line experience, as that was the WK cashcow. The SR clix was a non-starter, and the synergy with the Mech Assault X-Box games helped drive MWDA sales. So your two main options there are Dave Stansel-Garner (gone), and Loren L Coleman.

better the devil you know.

[Demonseed Elite]

No, I don't think we deserve to be told just because we are loyal fans of the game.

Absolutely true. It is a private company and there is zero legal necessity for InMediaRes to tell any of the fans anything. Of course, there's always been a difference between what is legally necessary and public relations.

[Fuchs]

Look at it this way; Topps is likely valuing the properties on how much revenue they brought in for WizKids, as that was when they acquired them. As such, they likely wanted someone with WK line experience at the helm. And by that, I mean MWDA line experience, as that was the WK cashcow. The SR clix was a non-starter, and the synergy with the Mech Assault X-Box games helped drive MWDA sales. So your two main options there are Dave Stansel-Garner (gone), and Loren L Coleman.

better the devil you know.

I look at it this way: "You trusted the license to a guy who could not keep his money and the company money separate? And without making sure those accusations of him breaking our contract and keeping money due to us from us?"

I do not think anyone who would trust Coleman at this point would be acting in a responsible manner befitting a professional.

[urgru]

If that is the truth, then Catalyst is finished. I can't see anyone who is accountable to investors being able to trust Coleman at this point.

I can't see how Euro zone countries' citizenry would trust Greece to wisely spend $40bn! The Euro must be finished! Goldman Sachs helped drive and then profited from a market bubble! They've got to be finished, right!?

Fact of the matter is that people deal with unsavory, unpopular or unethical partners every day because they offer valuable services or a good return on investment. The licensing question is a business decision, not a moral once, and will almost certainly be treated as such.

Catalyst has a proven capacity to monetize the licenses. Other contenders may or may not be able to show a business plan that inspires confidence at Topps. Given the choice between a restructured Catalyst that's taken steps to ensure future accounting is proper vs. a new licensee vs. simply not licensing the property (an option if licensing will cause damage to the IP's value > devaluation it would experience if left fallow), Topps will balance risks and make a decision to maximize their profit over some term.

[Fuchs]

Absolutely true. It is a private company and there is zero legal necessity for InMediaRes to tell any of the fans anything. Of course, there's always been a difference between what is legally necessary and public relations.

Exactly. But if they want us as customers, then telling us about their corporate ethics is expected these days. They do not have to, of course, but if they do not then that alone tells us something.

Private or public company - having someone like Coleman at the helm is enough to cast a doubt on them. They can either clear that up by clearing Coleman, or by removing him, or suffer the tarnished reputation that brings.

[Fuchs]

Fact of the matter is that people deal with unsavory, unpopular or unethical partners every day because they offer valuable services or a good return on investment. The licensing question is a business decision, not a moral once, and will almost certainly be treated as such.

It makes no business sense to trust someone who is accused of having cheated you until those accusations are cleared. Especially if it has been admitted that there were financial irregularities.

Would you let your agent invest your own money, maybe your entire retirement fund, in a business led by Coleman?

If not, why would you expect anyone else to trust him with money at this point?

[MindandPen]

And so far no one could say why Catalyst needs Loren.

Because he's one of the owners of a private corporation. Without knowing all of the legal details of how the LLC is put together, it may not even be possible to remove him.

As for Jason, I will judge him based on the products he produces.

-M&P

[Demonseed Elite]

Exactly. But if they want us as customers, then telling us about their corporate ethics is expected these days. They do not have to, of course, but if they do not then that alone tells us something.

Private or public company - having someone like Coleman at the helm is enough to cast a doubt on them. They can either clear that up by clearing Coleman, or by removing him, or suffer the tarnished reputation that brings.

Personally, I'm a big fan of skilled and open companies. That's why I applaud what Posthuman is doing. They not only seem to have a solid understanding of the business (to the point of maybe being visionary in this business), but they are also very open with their customers. That's a great thing.

But none of us know how Topps will reach their decision and I can't really take anyone seriously who thinks they know the outcome. There are too many unknown variables.

[MindandPen]

I do not think that Coleman would still be involved in the operations if this had happened at a public company.

Most likely he would not. Based on my experience, such actions would draw the attention of the IRS and the SEC. The results of those investigations would determine the change in share value, which would determine the shareholders votes on keeping the individual.

Also, if it was a much larger company than it currently is, even privately held, he would most likely have a problem, given concerns of the market.

But, this is not either of those. This is an LLC, in a relatively small field.

My educated guess is that the long term plan and the short term plan look radically different. To continue your earlier analogy, they have to seal the compartments, stop the flooding, and regain control of the ship (keep the license). Then, once moving (through sales of material) they can patch the holes, and repair the vessel (that will be when we see the future of Loren L Coleman).

-M&P