California Case Update

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Slavik said:
In the UK, many companies in debt decide it's more beneficial to start again by creating a new company, often referred to as a 'phoenix' company. In business terms this will mean liquidating a company as the only option and then resuming under a different name with the same customers, clients and suppliers. In some circumstances it can be ideal for the company. It can be a way to start trading profitably having left unfavourable lease agreements and historic debt behind.
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Is this legal? I mean, what if you liquidate a company but it's not worth enough to pay off the debt, then you start up and do the same thing again?
 
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Liquidation, bankruptcy, selling the business, etc. would not do much to protect the defendants.

The key to defendants winning is the fact that IB has not produced ANY evidence backing up their claims and IB's legal positions are defective.
 
James said:
Is this legal? I mean, what if you liquidate a company but it's not worth enough to pay off the debt, then you start up and do the same thing again?
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At least in the US you see it happening frequently, in particular with those time share companies that try to get you to sign-up with the promise of a free gift if you listen to their sales pitch. Company A is out there for a while, start getting noticed for the practices, dissolve, and Company B is back up & running with a new name in the same office with the same employees pitching the same time-shares until they get noticed and repeat the cycle.
 
Kevin said:
Then XF playing any kind of business games like liquidating would be a exercise in futility, especially considering that Kier & others are named as individuals in the cases and not just the XF corporate entity.
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By liquidating and assertaining the code is not IP of VB it means that even if found guilty of other aspects of the case, we would be guaranteed the XenForo product could continue ;)
 
Slavik said:
By liquidating and assertaining the code is not IP of VB it means that even if found guilty of other aspects of the case, we would be guaranteed the XenForo product could continue ;)
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Doesn't do much good for the individuals involved though.
 
James said:
Is this legal? I mean, what if you liquidate a company but it's not worth enough to pay off the debt, then you start up and do the same thing again?
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Yup. Though usually only if the business has a profitable model, but existing contracts or terms mean they are unable to turn a profit in their current form.
 
Kevin said:
Doesn't do much good for the individuals involved though.
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Assuming KAM's affairs are "correctly" in order, even if found guilty and ordered to pay up on the personal charges, they would be able to get away with paying next to nothing ;)

I say this having recently watched someone go through a divorce and be ordered to pay half of the money in his wallet, 50 pence, to then get in a brand new 50k car and drive home to a 300k home...
 
This happens all the time with service based companies, all over the world. It's only when a company has tangible assets worth while. Right now, IB have won no such rights to XF code, thus a spouse or even lawyer, can register the business that is forwarded the software. The developers then work for the entity, they are not owners of the entity. They change the pricing structure into local currency as the primary, not US, which is then afforded currency conversion rates; they host under a UK domain as the primary with only a .com or such as a parked version and well ah... IB would be forced into the UK courts to continue against the software itself, which will not go anything like the US system, as Commonwealth countries do not allow one another to just sue each other for whatever reason. You have to have real evidence before you'll even make it in front of a court to be heard, and normally you'll have to come up with a whole lot of money in costs prior if suing, to be held in trust as the person actioning.

It would get very ugly for IB to do such in the UK IMHO.
 
Anthony Parsons said:
This happens all the time with service based companies, all over the world. It's only when a company has tangible assets worth while. Right now, IB have won no such rights to XF code, thus a spouse or even lawyer, can register the business that is forwarded the software. The developers then work for the entity, they are not owners of the entity. They change the pricing structure into local currency as the primary, not US, which is then afforded currency conversion rates; they host under a UK domain as the primary with only a .com or such as a parked version and well ah... IB would be forced into the UK courts to continue against the software itself, which will not go anything like the US system, as Commonwealth countries do not allow one another to just sue each other for whatever reason. You have to have real evidence before you'll even make it in front of a court to be heard, and normally you'll have to come up with a whole lot of money in costs prior if suing, to be held in trust as the person actioning.

It would get very ugly for IB to do such in the UK IMHO.
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Not to forget IB has already been forced to place a considerable sum of money into court Escrow for the UK case.
 
BGL said:
Separated by a common language. Sounds like "Liquidate" is like Chapter 11 Bankruptcy in US where company is bankrupt, can't pay bills and goes for court protection to pay off it's debts.
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A business would use Chapter 13 (reorganization) instead of Chapter 11 (full or partial payment schedule).

BGL said:
If XF liquidated, Chap 7, there's no more company and the software product's ownership is in legal dispute. If the authors of the software don't come with the product, it's not worth much. Even if they came with it, what company would buy the product knowing it faced a roomful of suits working for another roomful of suits with deep pockets.
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Either that or IB would offer to buy the XF code from the bankruptcy estate for a pittance. This would be a much better deal for the vultures at IB than the nightmare settlement scenario that Fred Sherman postulated above. However XF is a British company, so at the end of the day chapters {7, 11, 13} don't matter much.

Personally, I'm in this for the long haul and am optimistic that the principals at XF will stick it out. I read this thread mainly to salivate over some of the interesting details. I haven't been a supporter of IB since they screwed over Randy Peterson at Flyertalk (who now runs the "big board" MilePoint on XF).

With regard to a few people leaving and converting to other platforms including (*horrors*) vB, who cares? How many hundreds or thousands of XF licences have been sold? There are bound to be some who convert or convert back in the other direction. That's even more expected given that XF is not a mature product, and some will decide that it doesn't provide the feature set that they need. That's just a normal part of business.
 
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MikeMpls said:
A business would use Chapter 13 (reorganization) instead of Chapter 11 (full or partial payment schedule).



Either that or IB would offer to buy the XF code from the bankruptcy estate for a pittance. This would be a much better deal for the vultures at IB than the nightmare settlement scenario that Fred Sherman postulated above. However XF is a British company, so at the end of the day chapters {7, 11, 13} don't matter much.

Personally, I'm in this for the long haul and am optimistic that the principals at XF will stick it out. I read this thread mainly to salivate over some of the interesting details. I haven't been a supporter of IB since they screwed over Randy Peterson at Flyertalk (who now runs the "big board" MilePoint on XF).

With regard to a few people leaving and converting to other platforms including (*horrors*) vB, who cares? How many hundreds or thousands of XF licences have been sold? There are bound to be some who convert or convert back in the other direction. That's even more expected given that XF is not a mature product, and some will decide that it doesn't provide the feature set that they need. That's just a normal part of business.
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People just enjoy turning every little situation into some huge conspiracy.
 
Anthony Parsons said:
This happens all the time with service based companies, all over the world. It's only when a company has tangible assets worth while. Right now, IB have won no such rights to XF code, thus a spouse or even lawyer, can register the business that is forwarded the software. The developers then work for the entity, they are not owners of the entity. They change the pricing structure into local currency as the primary, not US, which is then afforded currency conversion rates; they host under a UK domain as the primary with only a .com or such as a parked version and well ah... IB would be forced into the UK courts to continue against the software itself, which will not go anything like the US system, as Commonwealth countries do not allow one another to just sue each other for whatever reason. You have to have real evidence before you'll even make it in front of a court to be heard, and normally you'll have to come up with a whole lot of money in costs prior if suing, to be held in trust as the person actioning.

It would get very ugly for IB to do such in the UK IMHO.
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Not such a good option. IB could then file suit in international court under a violation of the Berne Convention. Under Article 16, they could immediately move for seizure of assets until he case is decided whereas now they are free to continue to do business until they (IMHO) ultimately win.

if you're confident in winning, as I'm sure they are, the current course of action is best. Any attempt to circumvent the process is going to end up being worse
 
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Fred Sherman said:
if you're confident in winning, as I'm sure they are, the current course of action is best. Any attempt to circumvent the process is going to end up being worse
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I do agree... to date there is zero actual evidence to substantiate VB's claims, thus it is only logical XF will prevail legally.

Saying that though, being right and being broke are two very different things.
 
MikeMpls said:
However XF is a British company, so at the end of the day chapters {7, 11, 13} don't matter much.
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Correct. Slavik was using the term "Liquidation" for a UK version of US Bankruptcy Law and in US, "Liquidation" means just that, the company's assets are sold off, it ceases to exist unless someone buys the brand name. It sounded like he meant something other than an actual liquidation.
MikeMpls said:
This would be a much better deal for the vultures at IB than the nightmare settlement scenario that Fred Sherman postulated above.
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True but then IF XF is what VB wants for Version 5, they might deal since writing it themselves would be hugely expensive and then shoe is other foot...copyright issues vs. paying XF for it using the lawsuit as the stick and the purchase as the carrot. It isn't an implausible scenario. The silence may mean something like that as it is apparently out of character for the XF principals.

The web is a quirky place and forums a quirky corner of a quirky place. I could see XF making this a very public fight, asking for donations for their legal defense, promising to code until they pry the keyboard from their cold dead fingers, man the barricades, Liberte, Egalite, Fraternite!! I could see that getting a big response on the web and lots of buyers of XF, kind of reverses the under a cloud effect.
 
Shamil (and several others) are having issues getting onto the site right now for some reason, but he tweeted that there's a trial date set for January 15.

*slinks back into the shadows*
 
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