Horizons and IGN.

[Signe]

The vnboards have decided that posting anything regarding AE's filing of Chapter 11 is forbidden.  They've deleted every thread referring to it and have made a sticky labeled "Future of Horizons Discussion Thread".  They will delete the posts in this thread once a week or every 250 posts.  So far, 4 people have posted in it.  There's no way to tell if people have just stopped posting or if the posts are being quckly deleted.   Everyone, and there were quite a few, posting anything negative regarding David Bowman, have wandered off.  I have a feeling many of the most vocal might have been banned.  

I admire IGN's stance on this.  Someday, I too, wish to be a Board TOS.
No more free speech for joo!

[Anonymous]

*deletes this post*
*bans Signe*
*makes an inflammatory post warning people to not make any more inflammatory posts*

[Dark Vengeance]

There is no such thing as free speech on privately-owned forums....so that's kind of a non-issue. No different than if Soul or schild decided that talking about Star Wars was a bannable offense here.....if they say "don't do it" and you insist on doing it anyway, the banstick is probably headed your way.

We've already covered the AE filing quite extensively here and on corp, plus some of us actually went over the public records associated with the filing. They could still come out of it okay....but it looks close enough that it could easily go either way (at least based on our estimates for their monthly revenue).

All of which is little more than a passing "meh" for most of us....because it's frickin Horizons. You'd get the same reaction if the company that makes Olsen Twins games filed Chapter 11.

Bring the noise.
Cheers............

[HaemishM]

Not to mention, it IS a Vault board, one of the few commercial boards where the ops really aren't any smarter than the morons who read the site.

[WayAbvPar]

You'd get the same reaction if the company that makes Olsen Twins games filed Chapter 11.

As soon as holodeck technology is perfected, I think those games will be among the first made.

[HaemishM]

The game will be called "Don't Touch Me There."

[Signe]

Soulflame did once delete my little Jesus avatar with it's teeny tiny penis.  I was quite hurt.  I thought I was over it, but just thinking about it now makes me a wee bit misty eyed.  I forgive you, Soulflame.

And, yes, the doomsayers  did make the board useless for any sort of game information.  I don't mind moderation  and it was definitely called for, considering no one was posting about anything else.  I much prefer, however, to see threads locked or moved, posts with vile comments or name calling removed individually, rather than entire threads deleted.  Designating a sticky isn't even too bad and the locked threads would soon drop off the front page, anyway.

And I kind of enjoyed the Bowman bashing... but that's a personal thing.

[Numtini]

The Vault Horizons boards have always been a bastion of fanboyism for the game. It doesn't surprise me at all that they're continuing that.

[Sky]

*deletes this post*
*bans Signe*
*makes an inflammatory post warning people to not make any more inflammatory posts*

That's it! I'm quitting and taking my guild with me!

[Venkman]

Can I have your stuff?

[Sky]

I gave it all away to a newbie names 'peepeepuddles'.

[Furiously]

I'm not a newb when I play ppp I'm a beggar character...

BTW - tks 4 ur stuf.

[schmoo]

tazoon.com has banned the posting of and links to the bankruptcy papers on its forums, to "protect the privacy of AE's employees", some or all of which are mentioned in said papers.  Fortunately, some one has provided a zip file of pdfs of the papers.  Not that you really want to know, but:

Verio is owed nearly a million for equipment and services, i.e. servers and bandwidth.

IGN is owed some $50000.

They only owe Atari $5000.

AE wanted to pay Verio $15000 a month instead of the contracted anmount of $182,760 per month.  When Verio rejected this, after letting them coast for a month or two paying $105,000 per month, and threatened to stop service in a week, AE responded by filing for Chapter 11 and filing an emergency motion to allow AE to use it's "cash collateral", something like 4 million dollars, to pay "operating expenses" while in Chapter 11.  Verio then objected to the emergency motion on the grounds that AE in it's proposed restructering would pay Verio $17,280 per month for hosting instead of the $183,760 contracted fee and that there is not the slighest chance in hell that AE can recover and pay Verio what it is already owed (paraphrased by me obviously).

The emergency motion was just approved today by the bankrupcty judge.

DB is proposing to pay himself $10000 per month while in Chapter 11.

If anyone is interested in seeing the bankruptcy papers I can post a link to a zip file.

[Numtini]

That reads like an article on the need for bankruptcy reform.

[daveNYC]

DB is proposing to pay himself $10000 per month while in Chapter 11.

That's the sort of job I need.

[HaemishM]

Before that, I thought Artifact Entertainment was being run by completely clueless fucktards.

Now I KNOW Artifact Entertainment is run by clueless fucktards.

[schmoo]

DB is proposing to pay himself $10000 per month while in Chapter 11.

That's the sort of job I need.

Make friends with a scummy lawyer, lose any of those pesky ethics or morals you might have, and you've got a good shot at it.

[Furiously]

Just a note. Schmoo is the name of my cat.

[schmoo]

That's odd, because my cat is not named Furiously, although now that I think about it, the name fits her.

[SirBruce]

Nothing unusual here about a Bankruptcy fight.  Of course DB still gets paid... he still was to run the company.  If you don't pay him, DB will leave for a better job, and the company probably has less of a chance of getting out of bankruptcy.

The purpose of Chapter 11 is to keep the company running in the best manner possible in order to recover the most money for creditors while still remaining viable.  Ideally, the company comes out the other side healthy enough and with enough assets to continue to operate.

Creditors rarely get everything they want.  Verio isn't going to get their $182,760 a month, nor will they recover their full contract amount.  In order to get paid as much as possible, AE would have to shut down.  But then AE is no longer making money, so Verio has to decide which will be better for Verio in the long run.  I agree that $15-$20K a month is very small, but the judge has to look out for the other creditors as well; it can't simply let Verio take everything.

I haven't read the documents but I suspect that $1 million figure will be disputed by AE?  Then they might be able to settle for half that, which they'll pay out over several years at $15K/month.  And then they'll need to find a new hosting service.

Bruce

PS - I wouldn't mind a link to the zip file.

[schild]

I have to wonder, what the fuck better job is DB qualified for? Running another company into the ground?

The only company I could see hiring him and thinking he has an ounce of insight left is Infinium Labs. And by 'insight left' I mean, he didn't have any to begin with.

[SirBruce]

Sure, but that's a Board of Directors decision, firing the CEO.  Now you expect to find someone ELSE, with NO experience with the company and its employees, to come in for FREE, and run a BANKRUPT company that may not survive, and which he has NO financial stake in?

Good luck.

It's possible there's someone else within the company that might be qualified, but might not want the job.  In any case, you have to pay whomever you have as CEO eventually.

Bruce

[Trippy]

Sure, but that's a Board of Directors decision, firing the CEO.  Now you expect to find someone ELSE, with NO experience with the company and its employees, to come in for FREE, and run a BANKRUPT company that may not survive, and which he has NO financial stake in?

Good luck.

It's possible there's someone else within the company that might be qualified, but might not want the job.  In any case, you have to pay whomever you have as CEO eventually.

Bruce

There are executives out there who are considered "turn around artists" -- CEOs/CFOs that have specific skills to fix the financial problems companies have gotten themselves into. Sheperding a company through Chapter 11 requires financial skills that the current CEO and CFO presumably do not have or else they wouldn't be in the mess they are in now. Somebody on the Board might, though, which might be why they haven't replaced any executives yet.

As for financial incentives it's very easy for the Board to come up with a compensation plan that pays a turn-around artist a chunk of cash for bringing the company out of Chapter 11 in a manner the Board deems acceptable. And that person doesn't need to (and usually doesn't) stay on afterwards.

[daveNYC]

It's possible there's someone else within the company that might be qualified, but might not want the job.  In any case, you have to pay whomever you have as CEO eventually.

Bruce

At this point they could probably find a houseplant that could do as good a job as DB has been doing.  That $10k a month is just his way of sucking as much money into his pockets as he can before the whole thing goes bye bye.

[Mi_Tes]

It's possible there's someone else within the company that might be qualified, but might not want the job.  In any case, you have to pay whomever you have as CEO eventually.

Bruce

At this point they could probably find a houseplant that could do as good a job as DB has been doing.  That $10k a month is just his way of sucking as much money into his pockets as he can before the whole thing goes bye bye.

I agree, a waste to give him anything at this point.  Anyone who gets you into a management mess, sure as hell doesn't have the skills to get you out.  AE's best bet would be to clean/fire all of management like most other companies who make it out of Chapter 11 do.  At least if they do something drastic, their chances for survival increase from not a chance in hell, to remote with at least a possiblility.

[SirBruce]

There are executives out there who are considered "turn around artists" -- CEOs/CFOs that have specific skills to fix the financial problems companies have gotten themselves into. Sheperding a company through Chapter 11 requires financial skills that the current CEO and CFO presumably do not have or else they wouldn't be in the mess they are in now. Somebody on the Board might, though, which might be why they haven't replaced any executives yet.

As for financial incentives it's very easy for the Board to come up with a compensation plan that pays a turn-around artist a chunk of cash for bringing the company out of Chapter 11 in a manner the Board deems acceptable. And that person doesn't need to (and usually doesn't) stay on afterwards.

Yes.  These people are not easy to find, however, and a good one is going to want more money than the 120K a small company CEO earns.

I was simply trying to point out that it's not necessarily easy or smart to fire and/or not pay David Bowman anything.

Bruce

[SirBruce]

I agree, a waste to give him anything at this point.  Anyone who gets you into a management mess, sure as hell doesn't have the skills to get you out.  AE's best bet would be to clean/fire all of management like most other companies who make it out of Chapter 11 do.  At least if they do something drastic, their chances for survival increase from not a chance in hell, to remote with at least a possiblility.

Most companies who make it out of Chapter 11 retain most of their management.  (At least, that's what all the research and bankruptcy experts told me.  Feel free to provide an alternative source of statistics.  Perhaps it depends on the circumstances of the filing.)

I disagree that the person who got you into the mess can't get you out.  The company took a risk and put out a product which did not do as well as they needed to support their expenses.  Virtually all companies take this risk at some point; you can't really manage a business assuming your sales are going to suck the following quarter.  Established companies can often absord the cost of a failed product launch, but a startup on their first product usually cannot, which is why you wind up in Chapter 11.  This really says nothing about their ability to run a business with a good product.

A large number of startups fail.  A good portion of CEOs of those startups are more successful the next time around.

Bruce

[schmoo]

All things considered, it seems to me that AE has no chance at all to become even a marginally profitable company with its current management. This seems to be Verio's opinion as well.  AE is gaming the bankruptcy court (or trying to, at least).

Edit:  I'm hoping Bruce is playing Devil's Advocate here. :)

Further edit because I seem to be anal-retentive today:

"All things considered, it seems to me that AE has no chance at all to become even a marginally profitable company with or without its current management."

[Numtini]

If AE has $4m in cash equivilents, I think the creditors should argue with the court to take their share and count themselves lucky.

4 million is 266k subscriber months, not accounting for any costs. I played Horizons. I don't see 266k subscriber months in that game's future. Nevermind that much in profit.

[Riley]

Man, it sounds like they had a pretty poorly designed contract with Verio.  I wonder how much their operating costs for hosting is each month - likely less than $17k if Verio hasn't pulled the plug on them yet... and somehow they ended up saddled with a contract paying ten times that.

And they owe IGN $50k... excuse me, what?  Who was the business genius who thought that any kind of contract with IGN was worth that kind of money?  If anything I figured IGN would be paying them to be the "official" message boards and get the extra traffic.

[Trippy]

Yes.  These people are not easy to find, however, and a good one is going to want more money than the 120K a small company CEO earns.

That's true.

[SirBruce]

Okay, thanks to those who sent me the documents.  I've been able to look them over now and add my insights as someone who has experienced the bankruptcy process firsthand before.

The documents are incomplete, so I don't have all the facts.  It's unclear where Verio's claim of over $900,000 comes from.  The contracted amount is $182,760 monthly and Horizons paid that in December, January, and February.  It then paid a reduced rate of $105,000 monthly March, April, and May, and then didn't pay June or July.  That's only about $600,000 owed there.  They later ask for 2 months collateral, but that would then be over the amount they requested, so again it's not clear exactly how Verio is calculating that figure.

Anyway, that's a HUGE monthly fee.  Verio is providing colocation services and probably some hardware and such as well, but even still, Horizons could probably get the same service for substantially less elsewhere.  Given the bad blood building between these two, expect to see Horizons moving to a new provider soon.

Horizons never claims to have $4M in "cash equivalents" as has been falsely reported here.  It claims book value of assets of $4.5M.  The filings for use of "cash collateral" is just standard bankruptcy proceedings.  Once you file for Ch 11 you can't even use your accounts receivable to continue to operate, meet payroll, etc. unless the debtors and the court agrees.  The court allowed this over Verio's objections, because the only alternative is to shut Horizons down and start selling assets to pay creditors.

The documents are very poorly prepared.  Verio's documents have at least one typo leading to a factual error (they said December 2004 instead of December 2003), and Horizon's documents seem incomplete.  They provide a schedule of expenses under proposed settlement but no statement of revenues.  We do know they have "over 20,000 players".  If we assume those are subscribers at the standard monthly fee, that's revenues of $259,000 a month.  Their proposed operating expenses per month are projected to be $180K-$200K per month for the rest of the year so that shows they are profitable, but remember that's by paying Verio at the vastly reduced rate.  There's no way they could afford to pay Verio over $100K per month; their revenues wouldn't be able to support it.

Bruce

[daveNYC]

Most companies who make it out of Chapter 11 retain most of their management.  (At least, that's what all the research and bankruptcy experts told me.  Feel free to provide an alternative source of statistics.  Perhaps it depends on the circumstances of the filing.)

I disagree that the person who got you into the mess can't get you out.  The company took a risk and put out a product which did not do as well as they needed to support their expenses.

Two points, Sr. Management vs. Joe Schmoe Management and companies that have multiple products vs companies that have only one.

Time will tell, but I don't see how Horizons comes out of this in good shape.

[SirBruce]

As long as they maintain their subscriber base, they should be able to come out of it just fine.  They can run profitably with 20,000 subscribers.  They just need to find another service provider for under $50K a month.  Maybe secure some new investment capital.  The judge won't let one creditor run the company into the ground; Verio is going to have to get paid back over several years.

Bruce

[daveNYC]

Not that I've scoped this out at all, but do you know what their subscriber base is?  I mean, at least AO offered sci-fi action, Horizons just seems to offer EQ but with 10x the suck.