The Enrons nobody hears about

[Clodfobble]

Some of you may remember that Acclaim Studios, my employer at the time, went violently belly-up a year ago. We were all locked out of the building, and were not allowed back in the building get our personal things for another 2 and a half months. Meanwhile, office pets died and British employees were threatened with deportation because they couldn't get their immigration paperwork from their offices. In the end, we didn't get our last two paychecks, and of course no severance pay or warning that this was going to happen (which is illegal under the WARN act.) It was estimated that we had around $25 million in assets and $100 million in debts.

We knew the company was corrupt, but we're only now finding out how corrupt. The court-appointed trustee, who is tasked with unraveling our company's finances and selling everything we have to pay off creditors, has just sued the top execs of the company, citing their personal liability in the company's failure. This is exciting because it means we all might actually get our money someday, if their own bank accounts are drawn from to add to the pool of money getting divvied up. Here's some choice bits on the suit from Newsday:

Almost exactly a year after video-game maker Acclaim Entertainment declared bankruptcy, the trustee overseeing its liquidation has sued former company officials, alleging they used the company "as if it were a personal piggy bank."
...
Although the suit lists 15 defendants, it focuses mainly on co-founders Gregory Fischbach and Jame Scoroposki, who essentially ran the company together from its 1987 inception to last Sept. 1, when it filed for Chapter 7 bankruptcy just days after laying off its nearly 600 employees in Glen Cove; Austin, Texas, and Manchester, England.
...
Among the acts criticized by the trustee in the filing:

--Acclaim's use of Jaymar Marketing and Jansco Inc., sales firms owned by co-chairman Scoroposki. Although Acclaim's relationships with Jaymar and Jansco presumably date to the video-game maker's inception and have been acknowledged in SEC filings, thetrustee notes in his suit that in the five years leading up to the bankruptcy filing, Jaymar billed Acclaim for nearly $1.3 million and Jansco charged Acclaim about $1.1 million. The filing alleges these
commissions "ultimately were for Scoroposki's direct benefit."

"These wasteful commission payments could easily have been avoided by having the company take direct orders for merchandise," the suit states.

--Payments to Fischbach, Perlstein & Lieberman, a California law firm in which Bernard Fischbach, a former Acclaim board member and brother of Gregory Fischbach, is a partner. The trustee notes that in the five years preceding the bankruptcy filing, Acclaim paid the firm about $7.3 million in legal fees, in addition to the $4.8 million it paid to Katten Muchin Rosenman LLP, its general counsel.

"The services performed by FPL either were unnecessary for Acclaim's business and/or the bills rendered by the law firm were far in excess of the value of the services provided," the suit states.

--Payments to CIDC LLC, a company owned by Scoroposki, for use of a private plane. For the five years preceding the bankruptcy, Acclaim paid CIDC at least $102,000, including a $48,000 for a trip to Austin for a 2002 board meeting and a $4,105 for a round-trip flight in 2003 from Farmingdale to Atlantic City "for reasons that appear to be unrelated to Acclaim's business," according to the suit.

--Allegedly failing to pay taxes and safeguard company property. There was no evidence in Acclaim's books that it had filed tax returns after the fiscal year ending Aug. 31, 2001, the suit contends. The suit also states that company records showed it owned artwork that was bought for nearly $800,000 and had "a market value that was substantially higher." But when the trustee arrived to assume control of the building, the executive offices housed only empty hooks where presumably the artwork had hung, the suit says.

[xoxoxoBruce]

Good luck but don't get your hopes up for money. Anything they rcover from these clowns will probably go to business debts before employees.
I hope you do get the satisfaction of seeing these bastards go down, though.

[Clodfobble]

The official order is:

1.) Court fees and taxes - if the company hadn't paid taxes since 2001, then this could be substantial.
2.) Secured creditors - namely our chief lender, GMAC, whom we owe around $30 million. Also technically includes the two people named in the suit, who each "loaned" the company $5 million at some point in the book-cooking.
3.) Employees
4.) Unsecured creditors - namely, everyone we ever did business with.

The thing is, this is all just guidelines for the judge. In reality, they can do whatever they want, and there have been many cases in the past where a large creditor, like a bank, had to take a half a million less of whatever they were getting just so that all the employees could get paid. Or at least that's what the trustee tells us.

But you're right, I'm not ever expecting to see that money again. It would just be like winning the lottery if I ever do get a check in the mail from the court.