Enron committed a whole series of crimes. 38 Studios is a company that failed. Completely different but nice try.Originally Posted by Scuzz
Enron committed a whole series of crimes. 38 Studios is a company that failed. Completely different but nice try.
I can't imagine how anyone could seriously try to compare the two cases.
Saw this posted on another forum
As most people use "malice" to signify an intent to harm, rather than harming people unintentionally, I would say yes, you do have a very different definition.
In the way they treated their employees. Someone here thinks 38 Studios has done something to their employees that hasn't been seen in 50 years. I am just pointing out an example of how dumb that statement was.
Malice, at least with regards to how most people use it, implies that someone set out to screw someone over or cause harm, so unless you're saying that 38 Studios started out with the intent of going belly-up and failing it really doesn't pass the malice test. Does it totally and completely suck to not pay your workers? Yes. Is it malicious? Unless you have evidence that someone cutting the checks did so to bone the employees on purpose, no.
The intentional commission of a wrongful act, absent justification, with the intent to cause harm to others; conscious violation of the law that injures another individual; a mental state indicating a disposition in disregard of social duty and a tendency toward malfeasance.
In its legal application, the term malice is comprehensive and applies to any legal act that is committed intentionally without Just Cause or excuse. It does not necessarily imply personal hatred or ill feelings, but rather, it focuses on the mental state that is in reckless disregard of the law in general and of the legal rights of others. An example of a malicious act would be committing the tort of slander by labeling a nondrinker an alcoholic in front of his or her employees.
I think you're getting hung up on the difference between your definition and the legal definition, Starlight. It's not malicious to wind up short on budget and not pay your workers. It's awful, and certainly those workers can sue, (good luck on getting paid what you're owed anytime soon) but it's not malicious.
Either way, we can agree that it sucks.
I don't think going belly-up is malicious, and it's not unusual for the last paychecks to bounce. The thing about not making payments on the healthcare plans and not selling the houses like they were supposed to do would better fit the idea of malicious behavior, though I suspect it's more along the lines of desperate behavior. If it's true.
I'd really like to know what Funcom's business plan is for making MMOs. They've never had a hit game yet they are about to release their third MMO. 38 Studios should have done whatever it is Funcom does, short of relocating to Europe.
Looking at their most recent quarterly report, I'd say that Funcom's business plan doesn't actually involve making money (looks like they lost about 16 million last year). If TSW flops, they may be in a world of hurt.
The company is out of money. Where do they pay for these benefits you think they should pay for? So companies fighting to stay in business need to set aside their money for continued health insurance etc.
I don't want to see anyone get screwed, but let's get real here.
Yes, and running the studio such you have people working there for things which you KNOW you cannot pay their next paycheck, that they'll never be compensated for their work and in fact you're hiding facts from them which would, rationally, make them take another decision (to go looking for work elsewhere, claim unemployment, etc.)...
Once you admit that to your employees you are out of business.
You cannot claim unemployment until you're let go or the company goes out of business. Missing a pay check isn't enough. Also, what you keep missing is that this is a START UP. There are inherent risks of start ups that every employee knew when they took the job. There are risks and we shouldn't let them off the hook. If the game would have blown up there would have been a huge upside for them.
What's the equivalent of 'trading while insolvent' over there? Because that sounds a lot like it?
No. It is wrong not to pay people; it is wrong (and possibly selfish) to put them in the position of being unpaid, uninformed, and without the benefits they thought they had. But based on what we know, it was not done with malice. English has a plethora of words to fit most occasions.
Last edited by Shimarenda; 05-30-2012 at 08:17 PM.
No. It's not. You don't understand what you're talking about. Until the company goes out of business, you cannot claim unemployment. Prior to the Gov. going public, 38 Studios believed that they were going to sign a development deal that would get the the funding and they also believed that they would receive tax credits that would provide them the bridge funding needed to hit payroll.
I don't think you know what start up wages are. Just because a company is a start up doesn't mean the wages are poor.
Missing a required loan payment to the government is pretty public; trying to shift the blame on the Governor is just silly. There is no great secret to looking at burn rates and cash on hand, and determining when things start bouncing.
There is no excuse for that level of mismanagement; clapping your hands and thinking good thoughts only works when you are trying to save an imaginary fairy.
I think it is actually less acceptable to screw employee now than it was 50 years ago. More laws against now than in the past and more employees ready to sue than in the 60s.
Of the 6 companies I've watch go out of business in the last few years (two as an investor the other 4 as interested observer). I saw two do a studio 38 shut down, everything is fine one day, opps we are out of money the next day. In one case they didn't even pay payroll taxes, thus jeopardizing the employees unemployment insurance. The other four leveled with the employees and investor telling them if we don't get $X dollar in the next 30 day or so we will have to shut down.
The difference between the two scenario is management skill and integrity. I don't hold anything against the guys that went out of business with good communications. A Studio 38 shutdown is because either management doesn't give a shit about employee, or due to incompetence. Either way I hope it has consequences. In my case, even though I didn't lose money, the managers of the two companies that ran out of money earned my distrust and disdain. I've gone out of my way to discourage anybody from investing in or working for their future ventures.
Sue a bankrupt entity all you want, once you win you can discover the difference between having a judgment and executing a judgment. Once you have that knowledge, you'll know why lawyers don't run around suing broke people.
At least they don't when they're on contingency. RIAA evidently likes suing broke people, perhaps because they can't defend themselves very well.
Yeah, but I'm guessing the point there isn't monetary restitution, but making a very heavy-handed political point....
Lawyers like to threaten poor people with lawsuits. It's cheap to send a few letters.
With all this talk about 38 Studios one thing we don't know is what the game was like? If it was a WoW/EQ clone I'm not sure that finishing it would have made that much difference. The arc would have been to go from subscriptions to F2P in a year or less, with layoffs along the way. Unless they were really different I don't think they could have avoided dwindling subs and layoffs and having to retrench as a F2P game.
If you start as F2P you wouldn't need to retrench anything.
/justsayin
Yeah, and I suspect that's how future MMO projects will need to be pitched to investors if investors are needed.
Seems to work for League of Legends and World of Tanks (among others)...
The problem is these things become hard to justify when you have a large company (as 38 was generally) and totally swaggy revenue estimates based on micro-transactions and other forms of small payments to sustain a large-scale F2P game. Especially if you've never done that before. It's a hard sell. LoL was started by a relatively small company and they grew with their revenue base accordingly (and yes, players spend tons of money in LoL).
--- Alan
You are right suing and collecting are different things. But since there more than twice as many lawyers per capita in the US as there were in 1960, people are lot more inclined to sue now than then. CEO are often sued personally in these situations, which should give you an incentive to avoid screwing your employees.
Assuming your premise that "people are more inclined to sue," that still doesn't mean that a lawyer worth retaining will be willing to spend time on it. Time is all attorneys have to sell, and time spent on a pointless case with no upfront retainer and no prospect of a contingent recovery will lack appeal.
Hypo:
Employee walks into Attorney's office, says the company he worked for failed, he didn't get his last paycheck, and he wants to sue the CEO directly for "screwing" him. Employee has no significant assets and cannot afford to pay the attorney's $250 hourly rate. Employee asks the attorney to take the case on contingency, which is generally 25% of the recovery if settled before trial, 33% if it goes to trial.
Employee is owed $2500 in unpaid wages. This means Attorney can get $625 to $825 assuming the most favorable outcome. This level of recovery would merit a letter demanding payment at best, anything more quickly becomes uneconomical.
Assuming the letter does not result in payment, Employee now wants to sue. This requires a $350 filing fee, unless Employee can prove that he merits waiver of the filing fee by filing an In Forma Pauperis petition showing insufficient assets to pay the filing fee. Even if it is granted, Attorney will spend a couple of hours on the filing, and several more preparing the complaint.
Because the recovery for lost wages is small, and the corporation has no funds, the suit will need to sue the CEO in his personal capacity for some form of fraud or bad faith, since "screwing" is not a legally recognized cause of action.
Suing a corporate officer in his personal capacity is called "piercing the corporate veil" and requires proof that the corporate form was merely a sham, and that the CEO was treating the company's assets as his own. This will require detailed analysis of the corporation's formation, meeting history, actions and expenditures, and legal representations by the CEO both as a corporate officer and as an individual. Discovery will be needed to gather documents, requiring time to analyze the information. Depositions will likely be required, and court reporters or videographers must be paid in advance. Expert testimony will also likely be required to show that the CEO's actions were outside the scope of a corporate officer's duties, either as generally required or under the specific rules of the corporate charter.
After all this expense of time and cash, there is no guarantee of recovery. In fact, piercing the corporate veil is considered very difficult in the absence of direct and unambiguous evidence. Nor is there a likely prospect of punitive damages even if the CEO is held directly resonsible to Employee for the lost wages.
Conclusion: it's easy to spout off about someone needing to get sued, not so easy to commit resources to actually get it done. The risk must be balanced against the recovery, and the math simply does not add up.
Last edited by RickH; 05-31-2012 at 09:14 AM.
About the same genre as much as Pac-Man and Tetris.
OK, so your point is what, exactly? That a free to play MMORPG can't succeed?
Indeed: "A lawyer's time and advice is his stock in trade".
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