This action became necessary as a result of significant unforeseen expenses associated with attempts to expand its core business to encompass externally licensed events.
This came after Tuesdays announcement that they were being sued by Lucasfilm.
Last month Lucasfilm Ltd. filed suit against Gen Con LLC in the U.S. District Court for Northern California alleging that Gen Con failed to uphold its legal obligations in terms of financial reporting, accounting and payments to Lucasfilm stemming from the Lucasfilm sanctioned Star Wars IV Celebration event, which was held in Los Angeles in May of 2007.It's not supposed to effect the GenCon Indy event this year:
Gen Con Indy, remains a vibrant, profitable event. Gen Con Indy will take place as scheduled August 14–17, 2008, in Indianapolis, Indiana.
I was already following this a bit. I don't know bankruptcy law, but it looks like an attempt to protect themselves from the lawsuit.ReplyDelete
My guess is that problems with the expansion led to cash flow problems that they used the Star Wars auction proceeds to cover. They were probably hoping they could hold off Lucasfilm until after August when they should have more cash from Gen Con Indy.
Pretty shady bookkeeping from them if that's the case.
I wonder how this will affect their other worldwide events of GenCon Paris in April and GenCon Australia in July.ReplyDelete
Shouldn't affect GenCon UK as it's run by a different company under license and they seem to be perfectly capable of messing it up on their own...
My guess would be that they filed an 11. This is debtor in possession. It causes all lawsuits to be frozen and potentially transferred into the BK court. All creditors are also frozen. Going forward, most existing accounts will want cash payments for anything. They can reject any contracts that have been signed. Otherwise, business as normal. However, Lucas can afford to litigate them out of business if they want so the BK is likely a tactic to get Lucas to negotiate.ReplyDelete
There's some information from Peter Adkison today:ReplyDelete
Based on this and other statements I've seen attributed to him over the last couple of days, it sounds like my original post was pretty close to the mark.ReplyDelete
The only question I have is did the charity auction actually raise $150,000. If it did, then that should have been separate from everything else in the books and should have been paid.
Everything else is just "whoops, we made a bad business decision getting involved in the Star Wars con, and now we're trying to sort it all out." The failure to turn over proceeds to charity goes a step beyond that.
Of course, it's possible that the auction didn't raise the money that Lucasfilm claims it did.
Someone in one of the game store private forums made this observation:ReplyDelete
"Is it coincidence that the bankruptcy filing was made right at the deadline for exhibitors to commit and pay for booth space at Gencon 2008? This filing jeopardizes and taints everything Gencon and would only have been done as a last resort.