You suppose, eh?

Let me rephrase:

I speculate that Coleman used the co-mingled money to have his new house built.

Assume: That the SR4ALE direct preorders are being shipped and will arrive on May 3rd

If you were in a company supposedly going down in flames, why would you ship the orders?

Its early and I haven't had my coffee, so I leave this riddle to those further east and already awake.

BlueMax

It is a possibility.

However, my point here is just that there are a lot of variables to why some things may or may not have been done. It should be taken into consideration that the real world and the world on paper aren't the same. Maybe Loren has a Scrooge McDuck-esque pile of money he swims through in his basement or perhaps he and his family are leveraged to the hilt. Until we know the reality of the situation (I haven't been in his basement myself), getting worked up over the details just seems silly.

Whoa! Somebody is really quick with the disclaimer! So, just when were you in his basement!

Agreed on the housing market. If there is a lean on the house at all, then there's a good chance that putting it up on the market will leave the colemans with no money and no house.

Though for someone who pilfered hundreds of thousands of dollars, I have a hard time disagreeing with the notion that he should be homeless and bankrupt.

His kids could go live with other relatives. I'm not advocating that *they* be left out in the cold. They didn't cause this problem.

@BlueMax

To pacify the buyers. If they cancel their orders, CGL has to give them their money back. If you are already short on cash, this could be the final nail into the coffin. So you need to make everything look good.

Again, pre coffee.

Why pacify the tiny debtors if you are going down in flames? From what I recall, the larger debtors get first pickings , especially if they are registered financial institutions, and everyone else gets to fight over whats left.
That's what I remember from the dot com bust here in the Silly Valley.
Note: Its way way past credit card refund date. And I suspect its a slitch and a half to make a sub $100 claim from another county or state.

Pacification of the SR4ALE buyers is something I would view as an investment to stay in business.


BlueMax

Oh, I have no doubt that CGL wants to stay in business. That, and the fact that the Shadowrun IP brings in a nice buck, could very well be facts that even FT would agree to

The question is if there is a real chance for them to make that happen. And if the people left with CGL are really doing all they can. Well, one of them. The, we all speculate, guilty dude.

And maybe they'll learn a lesson about corporate governance and prevent this from happening again.

PS: A new company might go through all this, revise the game to be unpalatable to the fan base (I am one fan of the Warzone/Mutant CHronicle universe that will not be going back to that game anytime soon-the game changed completely), and then go bankrupt.

I pointed a lawyer buddy of mine (who also posts here on occasion) to the filing on PACER, since he has an account there. This is what he wrote back to me:

"...Its worse than you thought. InMediaRes has been put into an involuntary Chapter 7 liquidation by a creditor. What that means:

http://en.wikipedia.org/wiki/Chapter_7,_Ti...ted_States_Code

The creditor is after what assets of InResMedia has left. That means InMediaRes is done as a company. "

He's good at his job and I trust his counsel, and if he says it looks bad, I believe him.

Abschalten, does your friend practice bankruptcy law, or is he just going off what he recalls from law school?

I don't doubt what he says, I'm hoping merely that there might be reasons to hope.

[DISCLAIMER: I AM NOT A MEMBER OF THE WASHINGTON STATE BAR. THE STATEMENTS BELOW ARE INTENDED TO BE GENERAL AND NON-SPECIFIC AND SHOULD NOT BE CONSTRUED AS LEGAL ADVICE OR INFORMED ANALYSIS WITH RESPECT TO ANY SPECIFIC MATTER. MY STATEMENTS SHOULD NOT BE RELIED UPON BY ANY INTERESTED PARTY. ANY INTERESTED PERSON OR ENTITY SHOULD SEEK THE INFORMED ADVICE OF COMPETENT COUNSEL ADMITTED IN AN APPROPRIATE JURISDICTION!]

Since posting the bankruptcy documents would be 1) against the forum rules (apparently), as they contain names/addresses and 2) somewhat pointless, since they're boilerplate forms and don't include any juicy materials like sworn statements, here are the basics from the two documents currently available:

* It appears that the petition was filed by retained counsel (http://www.karrtuttle.com/)
* Petition was signed on the 16th and submitted on the 19th.
* First filer: an individual claiming monies owed for services rendered first ($2,924.64; Shadowrun connections)
* Second filer: Wildfire, LLC, claiming royalties owed ($37,236.59)
* Third filer: an individual claiming unpaid loans ($18,551.54; may be entire loan or missed payments).
* Petitioners are original creditors, which means they dealt directly with IMR and aren't pursuing transferred claims.
* A summons was issued to IMR on 4/20/10 that demands response within 21 days. Depending on when the summons is actually served, it's possible that the response will be due after the license expiration date. A response could, though, be due as early as 5/12/10 if the summons was delivered same day. IMR may, of course, respond before the court's deadline.

Now, speaking GENERALLY & WITHOUT RESPECT TO THIS CASE:

Once an involuntary petition is filed, an alleged debtor may file a motion or answer. The alleged debtor may try to move the proceeding to a different chapter and avoid liquidation, claim solvency, claim a pattern of payment, claim mootness (because a/the petitioner(s) have been paid in full), claim the filers are acting in bad faith (refused to accept payment in full with respect to undisputed amounts), claim that there's a bona fide dispute as to the amounts owed to a/the petitioner(s), and so on.

As a general matter (again, not specific to this case!), involuntary bankruptcy is a rarely used tool. Parties that petition for an involuntary bankruptcy and lose are often forced to pay an alleged debtor's court costs and attorney fees. This is both an incentive for a debtor to fight (they win often, it ends up costing them little/nothing, and they can sometimes recover damages for reputational or business harms) and a sign of petitioners' belief that their case is very strong - the potential for an expensive loss is such that filers are usually pretty sure they're going to prevail or they wouldn't be in court.

Knocking out creditors so that not enough remain to support the petition as required by the statute (3) can lead to dismissal. Additional petitioners can move to add themselves as if they were original petitioners prior to any hearing on the case; however, additional petitioners who so join may be on the hook for fees/damages if the whole thing blows up.

Augmentin raised the prospect that the filing is strategic or motivated by bad blood (back on page 4, before the Fuchs spam began). I refuse to comment on anyone's intentions or motivations, but it's worth noting that the primary purpose of involuntary bankruptcy is to protect creditors' financial interests by immediately constraining the alleged debtors' activities. An "automatic stay" kicks in upon filing that stops debt collection activities against an alleged debtor. Moreover, an alleged debtor isn't allowed to undertake transactions, like asset sales, that aren't part of an "ordinary" course of business without the approval of the court. As such, creditors who are afraid that a business is about to do something self-destructive or detrimental to the creditors' interests may have good grounds to file an involuntary petition. I'm NOT saying that's the case here, that this is a good/bad decision, or in any way commenting on the propriety of the petition, etc. I simply believe it's good form to assume that people are using the legal system to protect the legitimate interests it's designed to secure. We can't and shouldn't assume ANYONE - IMR, the petitioners, the owners, the freelancers - is acting in bad faith. That's an issue for courts to decide after being presented lots and lots and lots of facts to which we're simply not privy.

Just as with the license renewal/non-renewal, we won't know much of anything for awhile. The response will be on the record, though, and may be illuminating. I'm sure several people will be diligently checking PACER for updates.

[DISCLAIMER: I AM NOT A MEMBER OF THE WASHINGTON STATE BAR. THE STATEMENTS ABOVE ARE INTENDED TO BE GENERAL AND NON-SPECIFIC AND SHOULD NOT BE CONSTRUED AS LEGAL ADVICE OR INFORMED ANALYSIS WITH RESPECT TO ANY SPECIFIC MATTER. MY STATEMENTS SHOULD NOT BE RELIED UPON BY ANY INTERESTED PARTY. ANY INTERESTED PERSON OR ENTITY SHOULD SEEK THE INFORMED ADVICE OF COMPETENT COUNSEL ADMITTED IN AN APPROPRIATE JURISDICTION!]

I am not sure how it works with the US but in Switzerland you can always stop a bankruptcy by paying the creditors, right up to the ruling by the judge.

If IMR has no money they might be finished, if they have money they can pay the creditors.

I think this is basically what urgru said with this



but then, I'm most definitely not a lawyer

I am a lawyer, but not in the US. Though over here, such claims are often used to force a payment. Not very unusual - some firms do not pay until summoned to court, hoping creditors, especially the "weaker" ones, will give up before that point.

I don't have all the details, and likely would not be able to comment if I did, since legal matters are generally played very close to the vest. Here are a few things I know:

1) Management is aware of the filing.

2) Management has not yet communicated to me that "InMediaRes is done as a company."

3) I have had other communications with management today about various business matters going forward.

That's what I've got.

Jason H.

CGL. What a bunch of dandelion-waving, corp-puffs. If management had any sense, they'd take this time to crack open one of the very books they're trying to sell for a tip: Shadowrun. They should already have a Johnson scoping out teams for runs against their debtors to grab some leverage. "Oh, we have a report that your CEO has been using per diem coverage on prostitutes and blow. Here are the pics our runne... a concerned whistleblower anonymously sent to us. How about dropping the Chapter 7 lawsuit so we can both clean these things up quietly and move forward as partners?" Meanwhile, Team2 does a smash and grab on CGL's own turf thinking they're working for a debtor. They clean out a batch of fresh freelance writing (the "paydata" or so they think) and drop a few viruses behind... Viruses that CGL's own spiders wrote to wipe out any trace of the embezzl.... co-mingling. And when they come back for payment? They're actually set up at a meet in a warehouse with all the unpaid freelancers who think they're getting a private meet with Coleman (where they intend to exact vengeance). The scene erupts into a firefight finished off by a rocket through the window courtesy of Team3. CGL laments their losses to the public regaining valuable face and sympathy and vaults back onto their high horse with a much anticipated SR5.

What a wasted opportunity otherwise! It's a shame they don't have any writers left with the creativity to concoct such an "out".

P.S. Damn, I'm good!

Urgru: The disclaimer is probably a bit much, but certainly seems appropriate.

My analysis is matching Urgru's. In addition, one can imaine the atmosphere around CGL right now, even if nobody admits it:

All hell is breaking loose. Urgru, here's a question - inventory is asset sales. Are they allowed to, say, keep producing books while all this goes on? Pay payroll?

I really feel horrible for Jason and other non-owner employees of CGL right about now. Their lives are going to probably be turned upside down, if they haven't already, through absolutely no fault of their own.

I even feel sorry, to a lesser degree, for a good number of the owners of CGL. They were the ones who got ripped off by the Colemans directly by the draws that are at the heart of the matter. Does it mean I agree with the actions since all this was disocered? Not even close. But I can empathize with what they must be feeling - shock, rage, depression.

In short, what comes next is likely to be horrible in many ways.

Not funny, Mesh. Not really funny at all.

As I think about it more, I should offer one more clarification. The quote says "InMediaRes has been put [emphasis mine] into involuntary Chapter 7 liquidation by a creditor." It is more accurate to say that "Creditors are attempting to put InMediaRes into involuntary Chapter 7." These are two quite different statements, and as has been pointed out, the latter involves an opportunity for IMR to respond. In one situation, the Chapter 7 is fait accompli--in the other, there are remaining avenues of recourse.

As a matter of logic, consider a system where creditors filing to force a corporation into bankruptcy automatically means the corporation goes into bankruptcy. That puts an awful lots of power in the hands of creditors, which would be used for all sorts of business disruption (can you imagine what type of real-life shadowruns would take place if that's all you needed to do to put a company under?). As far as I understand (and I am not a lawyer, etc. etc.) that's not how things work, and so nothing is a done deal yet.

Jason H.

I'm glad you found the disclaimer clear!

I'm absolutely not going to speculate about those things. We know IMR has retained attorneys. They'll surely help them figure out what's appropriate and what's not. If you want examples of ordinary business in bankruptcy, though, Google can probably hook you up.

Didn't spot the irony in the situation, eh? Oh well. I had a blast writing it if that makes anyone feel better.

That does not follow.

This statement also assumes all of the money taken was used to pay for the house, and that is not the case.

It also assumes the mortgage(s) is (are) less than or equal to the amount taken, which does not have to be the case. Someone previously posted what the land and house were paid for, and in any case that's all available if one visits the right sites and searches the right materials, and it's more than the total reported.

I found it funny... The irony was very sweet... Bittersweet but sweet...

Many thanks for the update. Quick question you may or may not be able to answer: does Topps require a due diligence process prior to renewing the license?

On a non-CGL note: I assume this is a small industry. It seems you've played an amazing round of PR after being dealt about as bad a hand as you could possibly be dealt. Most of the freelancers seem to appreciate your efforts to get them paid. Most fans seem to appreciate the regular updates. In short, it seems like you've tried to do right by the company, the freelancers, and the fans. Many, myself included, take issue with your attempts to do right by the company, but you can't help but be impressed by the work you've done given what you had to work with. If CGL/IMR fails I have no doubt you'll land on your feet.

Well, Jason was an alternate for the 1984 USA Men's Gymnastic team.

I cant decide if I want the company to survive or fail. I just cant support a company that doesnt pay its employees, and finding out its business as usual to not pay is sickening.

The problem is, its usually the little guy who gets screwed in the US courts, like the Freelancers who wont get paid, and then the management will walk away with money to form a new company if this one falls apart, or for example: someone walks away with a new shiny house.

I agree that not paying people is wrong. If CGL is going to survive, it is by paying people. Products that had been frozen should be unfrozen shortly, and that will happen for one reason--people are being paid.

@augmentin: Thanks for your kind words. I'm not part of the license negotiations, so I can't say specifically what Topps does or does not require. I know that management has been in communication with Topps, and I know they have been preparing various documents for them, but I don't know the content of those documents.

Jason H.

It's interesting to see the mix of creditors on the filing. On another site I read that this type of filing can be made by a single creditor if the subject has 12 or less creditors, but requires 3 creditors if there are more than 12. So I guess this is a sign that CGL owes money to more than 12 creditors, or the person putting the filing together was playing it safe.

I'm wondering how the group of creditors that filed was put together. I suppose there may have been some form of discovery on the part of one of the creditors already, who then got into contact with others.

You've got two creditors owed sizable sums, then one that's owed what's a relative pittance to the other two in comparison. It seems a bit risky since CGL could potentially pay off the guy owed $2000 and technically end the filing?

I'm wondering if the filing was done with the hope that others owed money would join on, reinforcing the filing beyond the minimum 3?

The timing and lop-sidedness of the filing makes me think that it might have been done under pressure, before the BT/SR licenses expire, and these are the three they could get together.

Yeah, runner Teams 1 and 3! (2 got nuked in the freelancers set up in the final scene, and their deal was no $ upfront. They should have heard mental klaxons ringing at that point, but oh well.)

I have finally caught up completely on this tread and I would like to say a few things on this matter for maybe a little help to look at the BIG picture. First the law suit that is being filed is one in which I would recommend if I were the Attorneys involved. What it does do is sets up the people involved to be the first in line if the company does go down, not as a way to make them go down (especially when you take into account that the money is of a lower amount in the grand scheme of things). So I believe it is not a bad blood, hate filing, but more of a, "they have not shown us that they can make it out, so if they don't we want to be the first in line to get ours." This is good self interest.

Secondly if the co-mingled funds did go mostly to the house the best recourse for those still in the company as co-owners would be to ask the Coleman's take out a mortgage on the property to pay back the funds. This might already be in the works, none of us know if this has occurred but would have been the way I would have went about it. It would then free up money for the company to get back on track, and if this happens then it can reset matters in the financial house of the company. If they refused then things should move to a, "We gave you an option, we will give you one last option, work for the company with out any further recompense until it is repaid, or we will have to file charges." These are really the only options as far as I see them without be privy to the full disclosure on the matter.

I personally would like to see CGL continue to work on the games just because the devil you know is ALWAYS better the the one you don't. If someone else buys the license we could see a SR d20 and that right there would kill the product completely, as we have seen with a bunch of other IPs in the industry, things like Deadlands and what happened to that great game.

All in all shit happens at every company, its it what happens after the fact that matters. And so far I would like to thank J Hardy, while he has been placed in a bad position he has held himself well. Congrats, you might not be a PR guy, but you have done well.


I look forward to seeing what happens when/if they continue to hold the license and pay off those they owe money too. After that and the ship is back on course, if they don't find a way to ouster L. L. C. then I would probably walk away from CGL forever. I love SR and BT to death these are games that I have followed from the very beginning, but I also take the position that after something like this happens all your asking for is trouble if you leave those involved around. Would I support canning him now NO! Right now you really do need him more then he needs you. Why some may ask, because he has the money in illiquid assets that you will not get if you can him, and that makes the company go bye bye. Once you get what is rightfully the companies back and have the licence re-secured then you have to get rid of him, just to put the licence hold at ease that this will never be possible EVER AGAIN!

Yeah, and as I noted in another thread this is two weeks after negotiations with WIldfire over back payment came up. I half wonder if this is a ploy by WIldfire to get Catalyst to pay them off in lump sum rather than wait for payments.

In response to Fuchs' earlier comments, I think it's very safe to say that everyone on these forums is relieved to know that LLC does not have direct single access to CGL funds.

To the extent that he can still be useful to and should stay at CGL, I really don't know. I'm willing to leave that to the people who have to work with him, but I can understand why it would make customers and partners suspicious. Really, the only way for CGL to clear that sort of suspicion now is to pay off debts they owe and make future payment promptly and regularly. That needs to happen whether LLC is there or not.

I think Battletech fans would like to see Battletech continue as a CGL product and under RNB's guidance. Catalyst has been very good to Battletech.

Shadowrun? I haven't paid as much attention to it. I can understand a portion of the fan base being so upset they'd like to see Shadowrun be handled by another company. I think there's also some who just want all this to be over so they can move on.

I think it's also safe to say that everyone who might get the label 'pro-Catalyst' wants to see the company run more cleanly and honestly.

If this question is in any way based on the list of possible counters to an involuntary petition that I raised earlier, I offered a non-exhaustive and generic list of things that may be raised by an alleged debtor. Purely hypothetical and not intended to suggest anything with regard to the Wildfire/IMR petition other than that there's a chance to respond and that there are legitimate issues that alleged debtors can and do raise in their responses.

Facts matter. We don't have them. We shouldn't and can't speculate as to possible courses of action or their bearing with respect to this particular petition. There are attorneys at work on both sides here who have access to contracts, payment schedules, and the like. Let them do their work. I'm sure people are going to be checking PACER daily to see if there are new filings of note and that we'll hear when/if interesting things come up.

My two essential points are/were (1) that IMR has a chance to respond to the petition and is not, as JM Hardy noted, in bankruptcy at present and (2) that involuntary bankruptcy is a legitimate tool and that we [at least those of us with some faith in the legal system] should assume it's being raised in good faith rather than, as was suggested, in an attempt to derail IMR's license negotiation with Topps.

I think Wildfire has been in 'negotiations' with Catalyst in some form for even longer than that. A news item posted by them on March 11th acknowledged that they were in negotiations with Catalyst over licensing issues, and those negotiations might have been going on longer than that.

If negotiations have been going on for a while, I can understand how Wildfire might be at the point where they're going to take any opportunity they can to get compensation owed. While I don't know exactly how the bankruptcy process works, I do know that I wouldn't want to be in talks with someone who owes me money for a month or two, just to have someone else file a bankruptcy claim and get ahead of me in payments because I didn't sign on. I suppose that's not quite how it works, but I know I'd be at least getting in touch with a lawyer to figure out if I should sign on or not.

I'm a bit surprised because the imbalance between the creditors and timing comes off as desperation. If no one else joins, and CGL pays off the guy who's owed $2000, there goes my filing for $20,000+, and I'm out legal fees.

Presumably the filing should have been held until you get a third party that's owed something on the same level as the other two creditors. However, with no one else apparently joining in, and the time on the current license--and possibly CGL's existence--winding down, they had little choice but to file now.

Uhhh Shane still owns Deadlands... That is why there is a Savage Worlds version now. The d20 and GURPS versions were similar to the Vampire GURPS versions, they were their to just gain appeal to people who wont buy the normal product because of a mechanic.

I didn't mean to imply that it might be an attempt to derail anything. I'm assuming all of the applicants are legitimately owed funds. Timing wise, I think they needed to file something like this so that it resolves before the license officially runs out to avoid the situation where the license expires and CGL disappears before the filing deadline.

What fascinated me was that the choice to apply with 3 applicants indicates that CGL owes money to more than 12 entities, however, these were the only 3 entities that would come forward at this time, and one of them is owed a relatively, in comparison to the other two, small amount of money.

Of course, it was just filed this week. There's 2-3 weeks for others to decide to join or not. I think it will be interesting to see if others do or not, and the amounts owed. It could be about the only glimpse we're going to truly get into how bad CGL's situation is or isn't, aside from whatever decision Topps makes on the licenses.

For all the talk about missing money amounts, we really haven't had any information about how much Catalyst owes. If $100,000 manages to get Catalyst through this, that's a much less breath-taking number than the $750,000 to $850,000 claimed as missing. Yes, the money's still missing and is still owed back to Catalyst, but there's a big difference there in what it would take to keep Catalyst going.

I also don't want to imply that Wildfire is trying to sabotage Catalyst or something. They are legitimately owed money. As I said in a previous post, they've been trying to resolve licensing issues with Catalyst for at least a month or more. I can easily imagine a situation where Wildfire is just trying to cover its bases to protect themselves, just like Catalyst is trying to protect themselves through all this.

Im wondering what Catalyst did to Frank to piss him off so much. On another forum hes stated that he actually contacted Topps and made sure they knew about the chapter 7 problem.

It's Frank. He doesn't need a reason.

As if Topps doesn't have their own people tracking such things.

But if he wants to look out for the little guy in all this (Topps) he's welcome to do so!

Somehow I suspect Topps knew about it before he told them, and has more information than he's been privy to through his sources.

He did that. Frank forwarded me a copy of the e-mail.

Dunno.

I'm sure someone here can fill us in, AH?

You know who Frank reminds me of? Harlan Ellison. You don't know if you really like the guy or if he's right but he is convincing as hell and twice as entertaining.

The summaries he posted at the beginning of threads 4 and 5 (?) were some of the funniest and most erudite stuff I've ever read on these boards.

I've probably been on the wrong side of a debate with Frank at some point and hated every second of it but I still find myself cruising half a dozen other boards now looking for what he has to say about this situation today because it is invariably better reading than some of the drivel going on here.

I think after the dust settles on this it might be a good idea for the mod team to consider an amnesty for any warnings earned in these threads. Tensions have been high and virtually nobody (with the exception of Adam and Jen) has covered themselves with glory.

I've certainly lost a great deal of respect for posters I previously held in high regard.

I get this crawling sensation on the back of my neck that someone out there is angling to acquire the Shadowrun license, much akin to the way people were going after the IP rights when Topps closed Wizkids proper back last year. Again, this is only a hunch on the back of my neck; I've read lots of discussion of people wishing to do so, but very little public action.

The thing I wonder, though, is this: If someone were trying to accomplish that, how would they go about it? You could be either underhanded or open and forthright about it, and either has just as much chance of succeeding. Maybe I'm deluding myself in thinking I'd take the higher road and not try to ruin people in the process of crafting the game into my vision, but who knows. I just feel that in all my doings online, it is best to leave a positive trail and not come across negatively, for someone, somewhere, will be able to find the dirt. Especially if it is someplace fairly public.

(Sorry about the not-so-vague tone, this has been on my mind for a while and I couldn't hold back any longer.)

I can't speak for Frank. I know that the behavior of Loren Coleman, Randal Bills, et al. offends him. I know that the main reason he posted initially is because he became privy, through speaking to freelancers like me, of things like freelancers withholding copyright and rumors of Loren's activities, and he felt it would be better for these matters to be made public through him rather than get someone fired. That much I think anyone who has been reading can gather.

I think he meant, what caused the original rift between Frank and Catalyst? I think we've all been aware for some time that there is no love lost between them.

Frank has said that Catalyst failed to pay him "about a hundred bucks", so it isn't directly over that. He's kind of busy to try to run a new SR license and he also says that he has no interest in it. I'd assume it's because of what he has said it's over. CGL's conduct has pissed him off and he thinks that the SR license would be better off in someone else's hands. Someone who might do things like pay artists and writers, because you get faster and better work if you do that, and also have money to do things like pay printers.

Ah...well, Frank left the freelancer pool after Augmentation; his attitude was a little too combative for many freelancers, even though many times he was right (he called Bloodzilla right off). There were some issues with his getting paid for his freelancer work - late and short, from what I understand it.

Did I hallucinate reading somewhere that Frank helped with the recent FAQ update?