GenCon files Chapter 11

[DonTadow]

Well, certainly enough doom going around.

GenCon is very profitable, this is why they decided to expand further into the convention business. The convention business is NOT an easy road. Someone last fall told me that GenCon makes $, two of the other conventions they run "almost" break even, and everything else is simply a toilet they use to flush away the money they make at GenCon. I don't know how much of that is true, but some of it must be. I guess they have been flushing down money they didn't have yet...

If you are running a business and you are facing a potential lawsuit or debt claim that can lock your assets and put you out of business you OWE it to your employees to do everything you can to keep going. GenCon '08 (Indy) looks like the big ticket for them, it'll either pull their behind out of the fire and allow them to keep going, or it, well, won't. In order to run GenCon '08 they need to be able to pay employees and keep working on it.

GenCon Indy will still go on, it is in the best interest of everyone involved, GenCon LLC AND the creditors, for it to go on. Horribly simplified comment: a reasonable judge (and most really are reasonable in things like this) will make certain GenCon LLC has the opportunity to run an event that clearly earns profits in order to get creditors the best possible return.
Let's face it though, if you worked for GenCon LLC right now you would have your resume out and be looking for jobs right now. I am guessing they'll lose some of their best staff in the coming months.
I am already registered and going so I am just going to keep a positive attitude about the whole thing.

Patrick

Gencon decided to expand into the convention business (which Pete wrote a letter 2 years ago and told us was not as profitiable as he thought) because he needed to support a large staff year around and thought that was the best round. Thus Gencon INdy is pretty much the only full functioning gencon operated by gencon llc.

Peter's a good guy. Kudos to him for posting that message.

Didn't realize that press releases still impressed people.

 

[Rykion]

Yeah, unfortunately, most gamers simply won't care if they are supporting a company that shafted an amazing charity and then used a legal wiggle to get out of being held responsible*. They have a service people want and people will buy that service.

*yes, it remains to be seen, that's part of the "if".

Of course, if people don't support Gen Con, then Make A Wish definitely will never be getting the money. I'm not happy Gen Con hasn't lived up to their side of the charity auction, but I buy products and services mostly based on their value rather than my feelings about the company. If you look hard enough at just about any company, you'll find plenty of reasons not to buy from them.

 

[Ysgarran]

As has been pointed out in the other thread, a legal guideline for criminal cases doesn't have to be applied to every facet of life, even financial or civil law. But I'm glad you are gaining amusement.
Edit : and no, companies are not "folk". They are legal constructs, which represent and shield the folk who make them up.

From the "The Devil's Dictionary", 1906, by Ambrose Bierce
CORPORATION, n. An ingenious device for obtaining individual profit without individual responsibility.

p.s.
The quote is also used in Civ IV when Corporation is discovered.

 

[GVDammerung]

I think steel wind does have a point, however, about how important the buy in of other companies is to this venture. For instance, Marvel filed chapter 11 several years ago, and is still doing fine, but their primary source of income is selling their comics. As long as they can keep producing comics, subscribers aren't going to cancel, and shops aren't going to stop making orders. There isn't an element of investment risk for the people they need to keep their business going. Additionally, the majority of comic consumers probably never heard of the filing, and many would have responded by buying more comics to keep them going if they did.

For Gencon, which needs people to commit well in advance to paying for a "product" that doesn't exist yet (some of whom (the vendors) regard it as a business investment and will know about gencon's financial situation) the impact of a chapter 11 filing could be very different.

It bears saying that Marvel is in no way comprable to Gencon PLC in terms of upside coming out of banckruptcy. Marvel has huge IP that can and has generated hundreds of millions of dollars - the comics, the movies, the collectables. Gencon PLC has peanuts in terms of revenue and no IP to speak of that can be leveraged; it has some minorly valuable goodwill. In other words, all parties to Marvel's banckruptcy didn't ever see a possibility of Marvel shuttering its business; there was just too much business and money to be made. Gencon PLC? It makes a few hundred thousand each year. Gencon PLC could be shuttered and no one, except attendees and game publishers other than Wotc (who once owned Gencon and saw fit to unload it) would much care. There is no guarantee that Gencon will emerge from banckruptcy or that if it emerges its goodwill, perhaps its most valuable asset, will be intact sufficient for Gencon to go on, at least as it has. If Gencon emerges, it may very well bear little resemblance to the BIG SHOW everyone has come to know in Indy. Only time will tell.

 

[Justin D. Jacobson]

If it makes anyone feel any better, I just got onto the federal case filing system and downloaded Gen Con's answer to the complaint. They've alleged a few blanket affirmative defenses but, interestingly, also counterclaimed against Lucas for unpaind booth and merchandising fees in the amount of $77,289.50.

Long story short, you should never, ever, ever mistake legal pleadings for facts. I've said many times, all it takes to file suit is a filing fee and a dream.

(And, yes, I am a lawyer.)

 

[smootrk]

It should be made clear, that if a company failed to deliver on a contract (in this case GenCon with respect to delivering funds to a charity), it should come as no surprise that the suing company (Lucas) decides to withhold other payments....

no brainer to me... and no brainer that GenCon mentions that they should be paid in their answer to the complaint.

EDIT: and no, I am not a lawyer, but I can connect the dots as well as many lawyers can.

 

[Justin D. Jacobson]

It should be made clear, that if a company failed to deliver on a contract (in this case GenCon with respect to delivering funds to a charity), it should come as no surprise that the suing company (Lucas) decides to withhold other payments....

no brainer to me... and no brainer that GenCon mentions that they should be paid in their answer to the complaint.

EDIT: and no, I am not a lawyer, but I can connect the dots as well as many lawyers can.

Or at least you think so. How can you be sure?

Let me elaborate. You're assuming that (a) Gen Con did indeed fail to pay and did not have a legitimate basis for doing so, and (b) that Gen Con's failure to pay preceded Lucas's failure to pay thereby giving Lucas a legitimate basis for failing to pay. We have no way of knowing if any or which of those assumptions are true. The mere fact that Lucas filed first has no probative value in this regard.

 

[smootrk]

Oh, I forgot... Lawyers are smarter than regular folks.

 

[Justin D. Jacobson]

Oh, I forgot... Lawyers are smarter than regular folks.

About the law? Yes. Shouldn't they be? When I have a question about the law, I don't call a plumber. When I have a question about plumbing, I don't call a lawyer. Am I missing something? I'm sure this is coming off as snarky. That's not my intention. I'm just cautioning everyone from jumping to conclusions based just on the filing of a complaint.

 

[DonTadow]

Or at least you think so. How can you be sure?

Let me elaborate. You're assuming that (a) Gen Con did indeed fail to pay and did not have a legitimate basis for doing so, and (b) that Gen Con's failure to pay preceded Lucas's failure to pay thereby giving Lucas a legitimate basis for failing to pay. We have no way of knowing if any or which of those assumptions are true. The mere fact that Lucas filed first has no probative value in this regard.

Ok not a lawyer but covered the judicial system in Michigan for 9 years as a reporter and am married to a paralegal.

I agree, if joe smoe files a lawsuit, all you need is a filing paper. But large companies rarely file lawsuits that don't think they can win. At that level of the game you're playing with law anylsits who mock trials before they even think about filing a lawsuit. Lucas does not put their name out into the media against a relatively small company if they don't think they have a winable case.

Gencon, however, is not making the moves of the won wronged. Filing for bankrupcy is a very bad PR thing to do unless you absolutely need to. It makes you look guilty, especially when papers have just been filed against you. I'm wondering who told him to make that move. In any case, if gencon failed to prove, which it seems more likely based on the relative filings. There is little excuse for them to not honor a contract. Unless they can claim that they entered into the deal under false pretenses, there is not a lot of squirming room. Pete needs to find a scapegoat and find it fast. Put his chief financial officer out to dry.