Star Citizen - Chris Roberts, lots of spaceship porn, lots of promises

[Don_Quixote]

That’s the thing- no one knows how much the loan is for (except the bank and RSI, of course). So it naturally becomes the perfect opportunity to spread more FUD.

[dsmart]

SQ42 is made from portions of SC, is made from portions of Lumberyard. (Assets, scores, scripts, IP, source code, mo-cap, video, etc, etc, etc)

CIG don’t have rights to transfer the Lumberyard engine itself, so we are talking about the overlap of the blue and green parts - purple.

I agree with Derek in that the contract is worded in such a way that the purple component could easily be under dispute if CIG defaults. Or, maybe the bank knows the dependency SQ has on SC and that purple is excluded, significantly reducing the value of what’s left of SQ42, which explains additional securities in the charges.

Either way, if a default occurs, the bank is going to want to value from it’s security and if they don’t think they can get it from the carcass of SQ42 once SC is removed, I can easily see them disputing.

Again, perhaps CIG will service this with nary a drama, but good business people don’t really take unnecessary risks and that’s what this seems like to me, for what is supposed to be an operational loan against future tax credits and some FX hedging.

Love that Venn. It completely illustrates the issue which many (who aren’t game devs) either aren’t grasping, or are willfully ignoring. Good job.

As you concurred, the bottom line is that if they don’t default, or go bust (which triggers a default), there is no concern. But for a company reported to be on financial shaky ground, for a project that is at least +3 years away, what could possibly go wrong?

The question, to my mind, is whether the bank know how deeply dependent SQ42 is on SC. If they know, happy days, no drama, default means SQ42 is dead, CIG lose some other UK assets but otherwise continue on and SC is unaffected. (Note this would still be disastrous for CIG ,IMO).

If they don’t know, or have not been informed, or CIG have omitted how dependent they are and how much cross-over there is, then the bank would have a good case for the contract being negotiated in bad faith by CIG. That could be very bad, as to my knowledge the UK courts, to various extents, still value the faith under which contracts are negotiated, rather than the strict legal text. Who knows what the fallout of that could be.

Either way, no default = no problems. Probably.

That’s basically the crux of the matter. What does the bank know and/or expect, based on what CIG/F42 told him in order to get this loan.

[dsmart]

I guess they could dispute it, but given the pretty clear section excluding ALL intellectual property related to star citizen, it seems like they would be virtually guaranteed to lose such a complaint.

LOL!! uhm, yeah, no.

But it’s just my opinion, and I’m no judge.

Right. Which is why you shouldn’t be saying things like “virtually guaranteed to lose such a complaint”

ps: You don’t need to be a judge for that. It’s the attorneys and jury who get to make the case.

[Teiman]

That’s the thing- no one knows how much the loan is for (except the bank and RSI, of course). So it naturally becomes the perfect opportunity to spread more FUD.

People is not skeptic because they are haters. People is skeptic because every Korean MMO is a grinder. Every Anime has flashy teenage skin and fanservice. And every Pyramidal scheme ends with the owner escaping in a helicopter.

We see red flags and we react to these red flags. I think everyone, even the sketics, would be happy if this has a happy ending.

The following article is off-topic.

Chandrasekhar limit

For Stars theres the opposite of “Too big to fail” theres a “So big, the failure is going to be epic!”. And thats the Chandrasekhar limit.

[dsmart]

This is possible, but potentially hard to prove.

sigh

How so?

[quote]Ultimately, Derek is right in that all of this is likely to be moot, given the size of the loan and the money they are pulling in. I suspect they’ll pay it off and we won’t hear about it again.
[/quote]

What information do you have about the size of the loan? Please share it. ktnx

If they had money to pay off a loan, why would they take out a loan with such collateral. And if they have cash reserves, why not pledge that for a loan instead? After all the 1st NatWest loan actually has their income bank account as a collateral.

If not, drama either way, because as you say, losing SQ42, would still be a massive loss for CIG. Its value to them is huge. They spent serious money getting folks like oldeman to act in it, and that would definitely be lost no matter how you read the contract.

What information do you have as to the value of SQ42? Please share it. ktnx

[dsmart]

Google search results are replete with examples of IP being sold off without said IP including copyright of previous software/games/movies/books. In media, IP is generally regarded as being branding rights as the processes to create said IP over time are generally worthless. Indeed, authors often sell off copyright while holding onto IP rights, as more software developers are starting to do.

Too late. I tried explaining that to him; complete with links. He basically just ignore them, even as he seemed to agree, while parroting the same nonsensical diatribe that warranted the cited sources in the first place.

It’s a losing battle tbh.

[dsmart]

How much is this loan, isn’t the tax credit payment the loan payer??

We don’t know. Ortwin’s statement implies offers NO insight; only waffle words. e.g.

“Coutt’s security for our UK Tax Rebate advance”
“to obtain a regular advance against this rebate”
“This security does not affect our UK companies’ ownership and control of their assets”
“and even then the UK companies have ample assets to repay the loan, even in such an eventuality which is of course unthinkable”

For all intent and purposes, it could be for this year’s tax credit, next year, a number of years etc. Nobody knows.

That’s assuming he is telling the truth and that the loan was only toward a tax credit. It could possibly be just a loan, but for which the tax credits only form a part of the collateral. Which would actually explain the list of collateral the bank asked for.

[jsnell]

Too late. I tried explaining that to him; complete with links. He basically just ignore them, even as he seemed to agree, while parroting the same nonsensical diatribe that warranted the cited sources in the first place.

All your links clearly agreed that software is IP. Look, here’s the facts:

• Software is covered by copyright. This happens by default and with no required action on the part of the author.
• Copyright is one of the many forms of intellectual property, along with patents, trademarks, etc.

Do you agree with these facts?

• If you disagree, can you point out a credible source that supports that disagreement?
• If you agree, could you elaborate exactly on how a copyrighted work such as source code would not be intellectual property?

[Timex]

All your links clearly agreed that software is IP.

Thank you. I was thinking that I was going crazy.

[Desslock]

There is a lot of complete nonsense being asserted in this thread, so I will try to set things straight:

• software is intellectual property. Software is copyright protected: copyright does not need to be asserted or registered - it is automatically owned by the author.

• In some countries, such as the U.S., that copyright is automatically owned by employers since employees don’t acquire any rights in work product for an employer. In other countries, such as Canada and the U.K., the employees will by default own the copyright to their work product, so it is important to have written employment contracts to assign those IP rights to the employer automatically (failure to do so is a common problem in M&A transactions in those countries).

• whenever a software company is sold or enters into commercial transaction, the software and related rights are often described in great detail separately and not just lumped in with other “intellectual property” - but that’s just done for greater clarity given the importance of that asset and the nature of the company’s business: it does not mean that it would be excluded from a general reference to “intellectual property” owned by the company.

[scharmers]

[dsmart]

There is a lot of complete nonsense being asserted in this thread, so I will try to set things straight:

software is intellectual property. Software is copyright protected: copyright does not need to be asserted or registered - it is automatically owned by the author.
In some countries, such as the U.S., that copyright is automatically owned by employers since employees don’t acquire any rights in work product for an employer. In other countries, such as Canada and the U.S., the employees will by default own the copyright to their work product, so it is important to have written employment contracts to assign those IP rights to the employer automatically (failure to do so is a common problem in M&A transactions in those countries).
whenever a software company is sold or enters into commercial transaction, the software and related rights are often described in great detail separately and not just lumped in with other “intellectual property” - but that’s just done for greater clarity given the importance of that asset and the nature of the company’s business: it does not mean that it would be excluded from a general reference to “intellectual property” owned by the company.

That’s the end of that. Hopefully it’s clear now because apparently I was writing mine in Swahili, so it wasn’t clear enough.

[Ryan_Kelly]

That’s the end of that. Hopefully it’s clear now because apparently I was writing mine in Swahili, so it wasn’t clear enough.

So, assuming you agree with what @Desslock wrote, does that mean Star Citizen is not owned by the bank under this agreement? Is it excluded as collateral in more than name only?

[rhamorim]

I guess what Derek means is that, without clear definitions, it’s in a limbo. On one hand, IP related to Star Citizen is excluded (and that might include code), but on the other hand, source code is explicitely named (programmes) in the collaterals list as included, so which one applies is open to interpretation. In other terms, if CIG defaults, they’ll likely only know how big the damage was after a lengthy legal battle, unless those things are very clearly defined elsewhere, in some document (that’s part of the loan agreement) that was not made public.

[Ryan_Kelly]

If one was to accept that Intellectual Property includes the code, and that “Excluded Collateral” includes all intellectual property with respect to Star Citizen, and that the Excluded Collateral is excluded in all cases from the collateral under the definition of “Collateral”, then I’m not sure how you could interpret the code for Star Citizen as being part of the collateral.

If you were to accept that IP includes the code, then it seems like all you’re left with is whether the agreement was made in good faith.

[Timex]

On one hand, IP related to Star Citizen is excluded (and that might include code)

Not “might”. Does. All of the source and object code is intellectual property.

on the other hand, source code is explicitely named (programmes) in the collaterals list as included, so which one applies is open to interpretation.

No, it is not open to interpretation.

There is always going to be overlap. That’s the point of defining the exclusion. You would never define stuff as excluded, which didn’t already fit within the set of what is included.

You define what’s included, and then you define what portion of that set of property is excluded. The final result is the set of property defined, minus anything the exclusion section.

Again, that’s how such exclusion clauses work. Always.

The idea that the exclusion section wouldn’t take precedence is nonsensical, as it would make the exclusion section literally pointless.

It’d be like you saying, “I’m going to sell you my house, and everything inside, except my clothes” and then me arguing that I get your clothes, because they are in the house, and that takes precedence over you saying “except my clothes”.

If you were to accept that IP includes the code, then it seems like all you’re left with is whether the agreement was made in good faith.

Exactly.

[Enidigm]

It’d be like you saying, “I’m going to sell you my house, and everything inside, except my clothes” and then me arguing that I get your clothes, because they are in the house, and that takes precedence over you saying “except my clothes”.

To be fair, the often frustratingly self-referential points being made above are more like, to use your example, selling your house but retaining your foundation. Their argument is that even if that is specified as such, it isn’t separable in practice.

[Ryan_Kelly]

It’s separable, but it wouldn’t be worth nearly as much once you’re finished separating.

[Enidigm]

Did i sell you the house and retain the foundation?

I’m fine with this. This is fine. ^^

[Gordon_Cameron]