[quote=“Derek_Smart_3000AD, post:3909, topic:74635”]
Fine. Foghorn then. :)
[/quote]
There are game assets which are not shared between Squadron 42 and Star Citizen, but the term “Game” is unfortunately not defined in the Charge that was made public.
I took this part of your post…
… to mean that you think the sublicensing clause implies that the bank owns the rights to the game Star Citizen.
I meant that the sublicensing clause applies to the Game as defined in the agreement, the definition of which is unfortunately not clear in the public document. Because of the limited info I have on the architecture of their code and all, I’m inclined to think that even if it applies mostly to Squadron 42, the terms are wide enough to affect Star Citizen. I may be wrong, of course, but my point about the loan from the start is that it’s weird. :)
Is there a fixed charge on all assets, in addition to a (standard) general security interest floating charge? If so, that would be extremely unusual and a terrible sign for the company - agree.
If it’s just a GSA and have given specific security on a known receivable (tax credits) that would be a lot less dire. Government sponsored tax credits for R&D are used as assets you can borrow against, for a coupon.
Completely normal and mandatory, in the case of any bank loan.
This is also the reason why the bank did this blanket “floating” charge
No, it’s not. Floating charge is standard security, as it doesn’t prevent assets from being used in the ordinary course.
If the company becomes insolvent, the execs get to walk away and leave the bank holding the bag.
That (limited liability) is what a “corporation” does and the main purpose of the entity - limited liability business through a distinct entity. The executives would still be liable for fraud and certain other statutory liabilities, which you can’t get out of (although you can insure, other than fraud), such as employee wages (in the UK/Canada), environmental liability, AND (importantly)any payments made while insolvent that are inappropriate preferences to creditors lacking secured interests/priority or any conveyances of assets during that time.
See the 10/08/2015 filing on this page.
- Backers pledge money to company
- Company CEO builds office for his brother
- Office gives brother shares
- Project gets windfall from backer money
- Execs sell shares back to company for cash (from backers), thus taking wealth out of the company
It’s genius. And not illegal. The only time it will come back to bit them is if they get sued, or the State or Fed officials got involved because they basically took money from backers to build a product, didn’t deliver on it, but instead lined their pockets. See Lily drone fiasco
You are correct. Plus, we already know that “Game” refers to Squadron 42. Unfortunately for CIG/F42, if this ends up in dispute, it will be easy to prove that the security encompasses any/all tangible SQ42 assets which are shared with Star Citizen. If you read the filing, and compare the definition of “Game” as well as the list of security, to the definition for “Star Citizen”, it is easy to see that it’s excluded in name only.
Yes. It’s right there on page 1.
Persons entitled
Coutts & Co.
Brief description
Contains fixed charge.
Contains floating charge.
Floating charge covers all the property or undertaking of the company.
Contains negative pledge.
This is also not true. If the company went bankrupt and its assets were distributed to creditors, those new owners would be free to sell the assets to anyone without restriction or obligation. There is no “delivery” or “performance” liability to a bona fide third party purchaser for value.
Agree the software would have very little value, however.
That’s why they have both a fixed and floating chart. You really should read the filing; it will help prevent this back and forth :)
Welcome back, @Derek_Smart_3000AD. It makes me happy when you show up! :)
As for @Timex and @Ryan_Kelly being supportive of Star Citizen, it seems to me they’ve decided to focus on hoping something succeeds rather than expecting it will fail. I appreciate their lack of cynicism, especially because they’re not just doing it blindly. As one of my theology professors used to say, “I’d rather believe in God and be wrong than not believe in God and be right”.
-Tom
Which part are you disputing exactly? I wasn’t stating anything that you are implying. I was strictly speaking to the fact that they would be unable to sell the IP for the reasons that I stated. I wasn’t saying they wouldn’t be able to try to sell it.
heh thanks. I pop in once in awhile, and usually just lurk. Mostly when my name shows up on Google Alert when someone comes up with a new and inventive way of invoking/insulting me because for some reason I’m somehow responsible for the train wreck that is Star Citizen.
Your “delivery” liability line. I thought you were suggesting that a purchaser would have to fulfill some delivery obligation of the borrower, which naturally wouldn’t be the case.
Ah no. I was suggesting that it would be a hard sell because of all the drama surrounding it. I even pointed out that the fact that backers would expect the buyers to give them a free game, is also a burden that the potential buyers wouldn’t want to deal with.
Can you imagine the fiasco that would ensue if, say, Amazon bought the Star Citizen IP and everything when it collapses? Now they have to spend $100m+ (my conservative estimate) to build what was promised (if they choose that route) - and backers somehow think they are entitled to a free game because they bought $2,500 space chariots?
Yeah, I haven’t read the documents, in part because I also have no idea which entities in their group are owned by which shareholders and own which assets, in which jurisdiction, etc. But mainly because this just came up and I have no real incentive to spend the time doing so - I’ll still feel qualified to potshot inaccuracies in statements though, lol. Just miss you, bud.
Yeah, fair enough. That’s why I said it would have little value too, unless they’ve created some hard IP that has utility for completely different purposes unrelated to the original project. And even then, it would be diminished in value it otherwise would have had.
Makes sense. And no worries.
But anyway, they have both a fixed/floating charge. the officers are Chris, Erin, Orwin. His brother Erin cashed out already, leaving the remaining shares to Chris and Ortwin.
CIG (UK) is the parent of F42 (UK). The latter is contracted by the former to “develop” the games. It gets funding from the US parent (RSI) which also has a CIG studio.
Here’s the fun part. There are 15 companies associated with this train-wreck. I have them all cataloged.
List of Star Citizen related corporate entities
Cloud Imperium Games Corp, West Hollywood, CA
Cloud Imperium Games LLC, West Hollywood, CA
Cloud Imperium Services, LLC West Hollywood, CA <– The one is interesting. It is found on BBB, but is not in the CA Secretary Of State dB records
Cloud Imperium Games LLC, Santa Monica, CA
Cloud Imperium Games Texas LLC, West Hollywood, CA
Cloud Imperium Games Texas LLC, Austin, TX
Cloud Imperium Games UK Limited, UK
Foundry 42 Limited, UK
Foundry 42, Germany
Gemini 42 Entertainment LLC, West Hollywood, CA
Gemini 42 Productions LLC, Santa Monica, CA
Roberts Space Industries Corp, West Hollywood, CA
Roberts Space Industries International Limited, UK
Twin Brothers Production Inc, West Hollywood, CA
Twin Bros, Germany
Agreed. And that’s why most of us are saying that the IP is worthless if they don’t end up shipping a game from it.
O.k., I skimmed the charge document. The assignment of assets and licence back to develop the game is definitely unusual and not a good sign – that sort of lease back (or license back) is common with expensive fixed assets (such as a railway car, or boat), but seems unusual for intangible assets such as IP.
Maybe they are unsophisticated.