It doesn't matter, the cost of the legal work to make a securities sale that doesn't violate the law in all 50 states is "a lot". Without that your liberty is at risk. Past a small number of investors the law for corps becomes more complex. RPG fans are not typically considered sophisticated investors so you have additional labor to show you are not running an "Affinity fraud" scheme, plus disclosure and prospectus, annual reports and annual meetings.

GTA is the vehicle Greg used, it was not fan controlled company.

Huh?

First, the "debt" situation you mentioned is what most freelancers have been working under for years. I wrote for Shadowrun for eight years and guess how many contracts paid out on time. One. There's nothing silly or flippant about the freelancers who are withholding copyright. They are fed up. I'm not one of them, because I have no pending writing for Shadowrun, but I sure as hell understand where they are coming from. They don't want to give the publisher the benefit of the doubt anymore, because with what is going on currently, they have zero trust in the publisher.

And what do you mean about "demanding to regain control of any future use of the material?" The freelancers couldn't do anything with it even if that worked. They can't resell the material, because it uses an intellectual property they do not own. One of the very few options they have is to deny the publisher the ability to sell the material in the case of non-payment, because copyright has not yet transferred. Once copyright is transferred, the original writer no longer owns the material, so there's very little legal recourse.

You have to read the complete conversation to understand everything I was talking about. It started with my comment that it was odd that they would have a draconian NDA but not include a clause about gaining ownership of the copyrights as part of the contract. Which was implied to be the case elsewhere, though you seem to be saying it does include one once payment is made. (Which still brings me to ask why they'd do it that way rather than just assume it from the beginning).

Also, if you're regularly not getting paid and haven't been getting paid for years... and know others you're working with haven't been getting paid in years... why do you continue to do it? Then, all of a sudden, decide to go and wave the copyright ownership dick around? I don't quite get that logic either. Especially since it would have just reinforced the tendency for them not to pay you or anyone else since you don't seem to have a problem with it through your inaction and continued compliance.


I mean exactly what I said. In addition to getting paid for your work through the lawsuit, you'd also gain the ownership for future use of the material back. That would cover things such as inclusion of any of the material in future sourcebooks or storylines. But going about demanding to get paid while simultaneously removing any chance of earning the money to get paid is kinda goofy. Actually suing them seems to make a lot more sense than stomping about and withholding the copyright, especially if you ever hope to get paid at all.

Curious. What's to prevent the writers from publishing their stuff on blogs? It's not like they can sell the content to anyone else.

Well, CGL just gave back control of the Cthulhutech RPG and Poo Card Game to WildFire. Some decisions are being made by people.

All from http://www.cthulhutech.com/2010/04/05/the-...-wildfire-pt-i/

Looks like things are worse than we thought.

Er... maybe this hasn't been posted before. I don't have an NDA on file with Catalyst. Many of the other authors do not either.

So many posts to keep track of. Don't mind me.

I understand what you're talking about. And it's a standard contract, very typical for a setting without advances and royalties. The writer is expected to create a certain amount of words for a certain amount of pay, and in exchange for that pay, copyright of the piece (ownership) is transferred to the buyer. It's Catalyst's choice that this transfer of pay/copyright takes place 30 days after publication; it's in their contract language.

Note that the contract also allows either party to terminate the contract before the conditions for pay/copyright transfer take place. In this case, you're seeing the writers using that, but it's also there for the benefit of the publisher. If the writer isn't making deadlines or is delivering sub-par writing, it allows Catalyst to terminate the contract and find another author to work with.



Well, as to why freelancers continue to do it, it's pretty much for love of the game. That's the only reason I continued to write for Shadowrun for eight years. And I can't speak for the other freelancers, but my struggles with the publishers have been on-going for a long time. I had my falling out with Catalyst in 2008, long before this current situation. And that was after numerous attempts to communicate with management, who simply decided to ignore both me and the line developer who was trying to reach out to them on my behalf. And for the record, I did terminate a contract in 2008, for the Manhattan e-book. But it wasn't public knowledge and wasn't nearly as attention-getting as the current situation. I find it sad and unfortunate that one of the writers that Catalyst found to replace me on the Manhattan e-book recently reached out to me to let me know that know he is waiting for payment from Catalyst and understands my reasons for doing what I did back then.

Also, as for why you're seeing a sudden appearance of terminated contracts and withheld copyright, it's pretty simple. The freelancers lack trust and confidence in Catalyst Game Labs. In the past, many freelancers were more forgiving about late payments because they weren't too concerned about the future of the publisher or the behavior of management. With the alleged "financial mismanagement", many writers feel they have to act more forcefully now.



Copyright law doesn't quite work like that. At least, not easily. Copyright law, in the United States, errs on the side of the copyright-holder. So once that copyright-holder is the publisher, a claimant writer will have an uphill battle. Getting it to cover future references to the material in separate works is even more unlikely.

I actually spoke to two separate lawyers a number of years ago on this topic and both recommended withholding copyright as the best immediate course of action. Apparently, lawsuits like this don't tend to end well for the writers, at least not in this type of industry. Usually the RPG companies owe so many different outfits money (and usually larger sums) that if a lawsuit is won, the publisher declares bankruptcy and the writers usually end up with very little in the settlement. But that's just speaking from my experience, I'm not involved in this current situation and I'm not privy to any discussions the current writers may have had with lawyers.

That's nice. When is CGL going to ship me the CT books I paid for a YEAR ago?

@kzt: Admittedly, I've never run an national corporation, but my understanding is that they are subject to federals laws and the laws of the state of incorporation. They are not subject to lawsuits in all 50 states. (They are liable in all 50 states, but unless a PDF comes embedded with a virus or someone suffers a fatal paper cut, I imagine the cost of liability insurance to be rather low. For reference, I pay less than $800/yr for $3M in liability insurance.) Also, I am suggesting a privately held corporation, which would be responsible to the IRS but not the SEC.

GTA seems like a good idea, and from what I've read worked for a time. Ultimately, though it failed. From what I've read, in return for giving money, GTA members received a substantial discount on future products. It effectively functioned as a buyers club. Of course, my extremely limited knowledge of GTA/Heroquest comes from what I've been able to read this evening. (And hey, the internet never lies!) What I am proposing is in return for money, the investors receive an ownership stake in the licensee.

Regarding affinity fraud, what I am proposing looks nothing like any of these. I acknowledged the potential that it could look like fraud in my first post. (Though didn't know the correct term - thanks!) As I said before, the two keys to this whole thing are (1) money and (2) buy in from current and previous key contributors to Shadowrun.

If we are able to engage a substantial enough core group and a large enough investor pool this is workable. If only the information in the official press release is true, the core group would already be very suspicious of any new ownership group. If a small fraction of what's been alleged is true, I would expect them to be downright paranoid. Look, we're asking them to give away labor in exchange for something they may or may not ever be compensated for. Given the current situation, I'm sure they will be far more wary than any fan looking to exchange $100 for an ownership stake in the game they love. If we're not able to engage this core group, well, I hope either IMR/CGL gets its act together or another company does.

Kzt--If you are having difficulties with an order, please send an email to quartermaster@catalystgamelabs.com and include the order number. I will follow up with our new quartermaster to verify receipt of the email and find out what measures can be taken for your order.

Thank you.

I put in, iiirc, $100 bucks so I could see a game put out. The game came out, it covered lots of interesting stuff. Eventually Greg decided to go write books. I got back maybe $40 bucks worth of stuff. I consider it well worth it to me. I have no idea what other people thought of the outcome.

It's harder than it seems to do a shareholder structure. I talked to Greg and several people involved with this while he was trying to set it up as a corporation. A "closely held corporation" is generally limited to at most 500 shareholders. Above 100 you have to register with the federal government. Apparently you generally have to register your security with each state you intend to sell it in, in addition to the federal government. This isn't a huge issue if you are a large private company going public, but it's a HUGE issue if you are a tiny company trying to raise money via lots of tiny investors, as you apparently normally need a lawyer licensed in the state to prepare those kinds of docs.

GTA was vehicle for Issaries Inc to raise money. Essentially Issaries Inc (AKA Greg Stafford) made very few promises in writing, we largely took him at his word that he would use the money to do what he said he would. Everyone crazy enough to do this was convinced that Greg really wanted to put the game out and would put out enough stuff to be worth our giving him the money. But we'd mostly been dealing with him (via Chaosium) for 15 years and he had a track record for producing games we liked a lot.

It was ordered at the same time as this damn SR4a LE that was promised to ship a LONG time ago.

Now that is not what I wanted to here. That means more delay on the Ctech products, while they find a new publisher, that have been finished for quite some time.

It also means that they're still dealing with royalty issues. Which is also not something I wanted to hear.

Huh? I've ordered all the Ctech books available through Battlecorps, and had all of them delivered. There haven't been any pre-orders that I recall for anything that hasn't been made available. If so, I missed it, and I'm pissed.

If he ordered it at the same time as the SR4 LE, the system tends to bundle the entire order as on hold, until all the pre-ordered items are in. At least that's my understanding of it. I assume that's because the shipping is based on the entire order as a single package, and not by individual item.

Hopefully talking with the Quartermaster and Bishop will help get things sorted out.

Bull

Maybe I missed this somewhere: Has Posthuman Studios made any official announcements as to how these events will affect their relationship with CGL? Adam is co-owner of Posthuman Studios, right?

I hope they come out of it okay. Eclipse Phase has, in a single release, become my favorite new RPG. I want that game to live and thrive for a very long time.

It ultimately doesn't matter. A book in the hand is worth two in layout, and so those should be priorities. Even you agree that the money is owed, so there's nothing much else to say. Pay the money, sell the books. If there are legalities complicating them, settle quickly, even if you have to sacrifice payment of books in the planning stages. That's just common business sense.

But to bring things back to a question you can answer: are the choice of projects to be paid decided by you, or are they made by someone else? You don't have to name names; I just want a look into the duties of a line developer.

As I read it, CGL only transfered the property rights of the books to wildfire, meaning that CGL still posesses the physical copies of the books and probably also still sells them but the money goes directly to wildfire. Correct me if I'm wrong.

The Wildfire press release states a "transfer of inventory ownership", which would imply that Wildfire now also owns the physical copies of all Cthulhutech product printed by CGL to date.

Yes, Frank does, indeed, have a Sense of Humor it seems ^^
http://forums.dumpshock.com/index.php?showtopic=30532

Yes, we should stop directing our hate at Loren C. Coleman and focus on the real villain here, Loren L. Coleman.

RE: Draconian NDAs comment.

CGL's NDA is a very standard NDA for licensed property. You want to know real draconian? Several authors I know of were required to sign NDAs where they weren't even allowed to tell anyone they were working for the property until after it went out. And if it turned out to be vaporware, they were never allowed to talk about it except to say "Hey, I worked on vaporware."

What's real fun is to hear the stories of authors doing movie tie-in novels where they're required to go into the movie studio, read the script in front of a babysitter over a 2-3 hour period, then not allowed to take notes or make copies, and expected to go home and write the book from their incredible memories. All the time, completely and totally not allowed to tell anyone what's going on or even discuss it via email with their agent. Conversations have to be in person or on the phone...

I'm not exaggerating by much, either. I even heard of one author who was asked to sign an NDA before he even got any information on a project at all. He wasn't told who he'd be working for, what the payscale was, anything. And then there was the expectation that once he signed the NDA, he'd do the work, regardless of what it turned out to be. He couldn't sign the NDA and not do the work... It was all rather silly and he turned down the offer because he likes to know what he's getting himself into before he agrees to do it.

Now THAT is draconian. @=)

We are working to settle and legal issues as quickly as possible. However, I hope you recognize that simply saying "We'd like to settle this legal issue quickly" does not immediately make it go away.

I can have some input into payments, but I do not have all the necessary information--things like a current list of outstanding ICAs, cash on hand, etc. So many decisions are made by the people that have that information.

Jason H.

My NDA is so draconian because I signed it with my middle name Lofwyr.

We (Posthuman Studios and IMR) are in the process of severing our relationship and Posthuman Studios is working on publishing Eclipse Phase ourselves or with another partner.

@kzt. That is unfortunate. Thanks for the info. Assuming a hypothetical $1M US for license+existing debts+working capital, we'd need $2,000 per share in order to limit it to 500 shareholders. Are there 500 SR fans with $2,000 to invest and faith in the profitability of the franchise? Probably not. The filing costs of an IPO are relatively low (any SR attorneys and accountants out there to help with that side?), but are 10,000 SR fans going to create eTrade accounts and buy up SR stock? Probably not. Worse, we'd need an underwriter willing to guarantee the purchase of any unsold stocks. If someone had such deep pockets and faith in the future success of the SR franchise, he/she would probably just purchase the license his/herself. Most concerning of all, is that none of the core group has voiced interest.

In short, this idea is dying on the vine. Without any information as to the amount of capital required for the license or interest from the core group, there's not much point in discussing this further. I still believe this is a workable concept, but perhaps this is not the correct time.

Thanks for the additional info, kzt.

@ Current & Former CGL/WhizKids/FanPro/FASA employees and contractors do to help? As a schizophrenic, argumentative, obsessed, poorly adjusted, worried, rabid fan base, what can we do to help ensure the continuation of the Shadowrun we love?

Play the game and try to bring in new players. No matter what happens on the business side of things, a greater fan base will be a benefit to the game in the future.

Damn, sounds like they are starting to pawn the family silver

The Government requirements, including the NDA as a part of the application process, for classified access specifies criminal penalties. The level of access can require rooms with no electronic emissions, multiple levels of physical security, polygraphs, etc.

-M&P

Companies are liable in other states if they have a physical presence in that state. What is a physical presence? Well thats hard to say, you have Microsoft on one hand who handles licensing out of Nevada rather than Washington State so they can avoid a couple of million dollars a year in taxes. Washington State has tried to get them to pay up a few times and so far Microsoft lawyers have been able to negotiate or win court cases. On the other hand when I was at a small company with a lawyer power of one, we had to pay California tax for having one salesman living there. So really the liability runs in relation to your lawyers... Generally speaking I think freelancers are probably 1099 contractors and therefore would not count toward physical presence. Full time W-2 employees might. So you may be liable in states where fulltime employees live in a worst case scenario.



I love the sign I once saw at a job site. Employees know your rights! Your employer can not force you to take a polygraph... unless its the government.

What's a Polygraph?

Ein Lügendetektor.

Aaaaah . . .

What'd I tell you about making up animals?

OK, i loled ^^

QFT.

Given some of the questions they ask you on a lifestyle polygraph (lie detector), that is disturbing in so many ways.

It's official Posthuman,Wildfire and Catalyst parting ways. As if we needed more bad omens.

Press Release

Frak me that was a lot of reading.

With CGL giving back some licenses it was too be said that things aren't looking good.

I'd be strangely curious to know what sorts of questions they do ask, actually. But only because I love storing potentially useless knowledge for safe keeping in my noggin.

Huh, Wildfire getting at least a sizable portion of their debt owed is worse? I was just hoping that Wildfire and Eclipse wouldn't get dragged down via a dissolving CGL left owing them a bunch of money. Or you expected CGL to continue to do business with Wildfire and Eclipse?

EDIT: Another positive is this is CGL clearing more of their debt. The business can't have a chance to move forward till this stuff gets resolved. So, taken by itself, it is hard to discern this as good or bad. *shrug*

BWAHAHAHAHAAH, That was funny. Overkill, but amusing. Apparently I was the only one.



& to augmentin: It's actually not that bad for sales, and the two cases from earlier are extremes (Microsoft and the random salesguy), but it's why middlemen are so powerful still and there's only a few national powerhouses for *physical* presence. Most RPG properties would need a license in one state, whatever state they incorporated in, usually, and then they'd sell to people with presence in those states (read, local gaming store), who would have licenses there. Internet sales again are subject to the state of origination, as long as you follow the taxing laws of the target state (for example, selling a computer to an address in CA requires you add on the recycling fee tax, but you don't need a CA license to sell to someone there). It's a boggling twist of rules but you get it after a while.

As to opening an IPO and dealing with the SEC (well, to the extent a publically traded one is), I think you're nuts, augmentin, it's just not worth it. You just won't have the interest to generate a real IPO launch worth discussing. You're better off completely privately held and to do stock sales. You *can* privately sell stocks without being publically traded with some effort, and you'd want to hold off on IPO's until you needed additional external capital and had a solid business requirement behind it.

KZT: I'm curious where the information you got regarding # of people at 500 changing any rules regarding a corporation. At *1* shareholder, you're registered with the federal government, Federal Tax ID and all, at least if your corporate agent in your state of incorporation is doing his job, it is. What other registrations do you have in mind regarding 100 ppl +?

Spinning the inventory off to WildFire and Posthuman reduces Catalyst's outstanding obligations, eliminates the need to lay cash out to print the CthuluTech and Eclipse Phase core books, and gives those games a chance to find a new publisher posthaste.

Obviously not an ideal situation for anyone, but it's not necessarily a bad omen. If the inventory transfer frees up cash to pay freelancers, which in turn frees up books to sell and generate cash . . . it may be making the best of this very bad situation. Or it may be really bad. As ever, we won't actually know until May's license re-up.

I'll be sending positive thoughts Adam Jury's way today. Hopefully Eclipse Phase will find a happy new home.

Thanks! We're working on it! (Between all my new clients and finding a new home or making a new home for Eclipse Phase ... I'm busy ...)

In all fairness this thread hadn't mentioned those properties much. Add to that the company line being toted, that mommy and daddy still love us and nothing is going to change. Well, I figured I should be subtle instead of say something like "Suck it bitches, more evidence that CGL is going down!". I'm just as glad as you that Wildfire and Posthuman aren't going to suffer the same fate that I expect CGL will.

My understanding was that the inventory is being released instead of payment. Someone correct me if I'm wrong.

I'm not sure on how much I'm allowed to say nor when the gag lifts... I will say that I have heard stories about how disturbingly high the number of people who answer yes to some questions.
I think you can add the rest together based on the following...