Perpetual Litigation

Ten Ton Hammer (and Cameron at Random Battle which is where I saw it) is reporting about the latest chapter in the Perpetual saga. In a nutshell, Perpetual’s PR company, Kohnke Communications, is suing them to get paid and alleging that they fraudulently transferred assets out of Perpetual before initiating the assignment for the benefit of creditors (which is, in greatly oversimplified terms, a common law bankruptcy) thus impoverishing Perpetual and thereby preventing them from paying Kohnke’s bill (at least in full). Lots of other stuff in there too, but that’s the main gist of it.

But why risk mischaracterizing it? Here is the actual complaint in full. Read it yourself here(pdf) and make your own conclusions. Keep in mind this is a complaint and the facts alleged are just that– the facts as alleged by the plaintiff in the case, not necessarily what they may be proven to be. My original post is here with some background.

Seems my speculation on Bildo’s site was pretty close to the mark. Seems Perpetual was playing it pretty close to the vest and being more than a little cute about what they were saying when they were saying it. If the facts in the complaint are true, then indeed the shell game occurred just prior to the assignment for the benefit of creditors, of which the filing of the notice by Gravity started this whole story.

[Update] For those of you scoring at home, P2 Entertainment, Inc., the entity to which the assets were alleged to have been transferred, appears to have been formed on October 3, 2007 according to the Delaware Secretary of State.

The hits just keep on coming for Perpetual.

[Another update: I borked the original linked pdf. Its fixed now]

Perpetual Speculation: Warp Factor Four

Lots and lots of so called information and speculation swirling today about the fate of Perpetual Entertainment, developer of now defunct Gods and Heroes: Rome (not) Rising and Star Trek: Online.  Perpetual’s fat has been in the fire for some time since it announced abruptly in October that it was in effect cancelling G&H.

Suffice it to say that it doesn’t take an industry guru to figure out things must have been going poorly, calling into question what the fate of the STO franchise might be.  More often than not, this mean not enough time or money to bring the project to fruition.

I’ve read some amazingly stupifyingly stupid things today which I wont grace with a link, but in interest of collecting some of the actual facts together, here is what we definitively know. 

This whole latest blogosphere brouhaha seems to have been initiated by the filing of a Form 6-K report with the U.S. Securities and Exchange Commission by Gravity Co. LTD., the South Korean company which describes itself as the developer and publisher of Ragnarok Online.  Read the whole thing here, its short.  The report is dated and was filed November 21, 2007.  I guess no one noticed earlier because of all the tryptophan circulating last week.

A Form 6-K report is a “periodic” report (i.e., something other than a quarterly or annual report) filed by a non-U.S. company which was securities traded on a U.S. exchange.  Over simplifying, its typically used to disclose material information about a company between reporting periods.  Gravity’s American Depositary Shares or ADRs are listed on Nasdaq under the ticker symbol: GRVY (there’s another turkey and tryptophan joke there, but I’m leaving it alone).  For you U.S. securities law junkies out there, a Form 6-K is basically a Form 8-K equivalent for a non-U.S. company.

According to the report, Gravity received a notice from Perpetual Entertainment on November 1 (which was dated October 16) that on October 10 (the day after the G&H cancellation announcement), Perpetual Entertainment had

…made a General Assignment for the Benefit of Creditors (the “Assignment”) to Perpetual (assignment for the benefit of the creditors), LLC (“Assignee”), a California limited liability company, as assignee, pursuant to California Law.  Pursuant to the Assignment, Perpetual transferred ownership of all of its rights in tangible and intangible assets (collectively, the “Assets”) to Assignee for liquidation. Assignee shall liquidate the Assets, wind down Perpetual, and distribute the net liquidation proceeds to creditors of Perpetual.

Try to stay with me here.  According the the California Secretary of State’s website, Perpetual (assignment for the benefit of the creditors), LLC (yes, that’s its legal name),  was formed September 27, 2007 (note the filing date before G&H cancellation) and lists 10250 Constellation Blvd, Suite 1700, Los Angeles, CA as its address.  This happens to be the address of Levene, Neill, Bender Rankin and Brill, a law firm specializing in bankrupcty and insolvency work, and very likely the law firm of the assignee. 

Michael Maidy is listed as agent for service of process at 101 University Avenue, Suite 100, in Palo Alto, CA.  Michael Maidy is a founder of and this is the address of Sherwood Partners, a business consulting firm specializing in tech company, uh, how shall we say, undertaking.  He is partners with Martin Pichinson who is a bit of a famous figure in the dot com undertaking world.  Particularly, Sherwood specializes in assisting companies in a process known as “ABCs” or assignments for the benefit of creditors.  An ABC is a procedure under state law, in this case California, which is sometimes known as a “common law” bankruptcy.  There’s a fair summary of the process on Sherwood’s website here.  Its used by a lot of VC backed companies to avoid delay, extra cost and the notoriety associated with public bankruptcy proceeding, though since the bust, business has been declining.  The process would have been to engage Sherwood, have them set up the LLC to serve as assignee which would be run by Sherwood.

That’s pretty much the facts that I’ve been able to find on short notice.  Here’s what I think it all means.  Investors backing Perpetual likely saw the writing on the wall and decided it was time to fish or cut bait.  In this case it meant going the ABC route rather than bankruptcy for all the reasons noted above and in the links.  The ABC process is voluntary, so the board would have to approve the process and the agreement with the assignee. 

These things can happen quickly, but not likely over night.  Probably, Perpetual’s board met and decided to engage Marty Pichinson and Sherwood Partners to handle the ABC.  Sherwood put the assignment docs together which were probably already approved by Perpetual’s board and executed after the G&H cancellation.

Perpetual cancelled G&H, assigned all of its assets to the LLC and the LLC started administering the sale process.  Note this is a sale of assets.  The assignee acts much like a trustee in a bankruptcy liquidation proceeding– marshall assets, notice creditors, administer claims.  This is essentially a fire sale.  Part of the process is to notify potential creditors to submit claims so they can be paid a portion, if any, of whatever the assignee can get for the assets.  That’s the notice Gravity received.

So, if someone wants to go in a buy G&H or STO (if the license would allow), I’m sure they can call Marty and put in a bid.  That we’re all just really hearing about it now is exactly why VC investors in tech companies like the ABC process.  If it were not for the public filings of companies like Gravity (fairly atypical, in this case), the next thing we would have heard was probably when someone acquired G&H or STO or both from the assignee, and then it would have been all done.

So far, it hasn’t been announced whether anyone will pickup G&H or STO or the people who were working on it, though that’s likely.  When is anyone’s guess…

Star Trek Online, Online at last: Devlog 1.0

The biggest news about Star Trek Online of late is that the Great Barrier of complete silence has begun to crumble with the release of the first developer’s log. Read all about it here. Frustratingly near-nothing by way of actual news from Mike Stemmle, Story Lead for STO, but still an interesting read into the early process of world development and a minor showcase of dev toys. If I had those ultra cool tools to play with, I probably wouldn’t see the light of day for two years either. Still its at least good to know that Perpetual is Class M and shows signs of supporting life.

Shape up and Ship Out

I recently went on a reading jag about exploration in the age of sail culminating with a history of the Britain’s Royal Navy. Naval battles and quasi-naval battles (e.g., space warfare) have long been fodder for any number of computer strategy games (and table top games before that). Lots of cannonfire, splitered wood and the swashing of buckles. The idea seems to be gaining popularity as more of these games are being ported or developed for the MMO space.

Pirates Ho!

Pirates of the Burning Sea promises to be that sort of game. Sort of Eve Online meets Age of Sail (try it, the demo is still available).

According to the PotBS web site:

Ship combat in Pirates of the Burning Sea has all the action, intensity, and tactical gameplay of a single-player game. Speed, direction, and facing all matter, and you fire and dodge in realtime. As captain of your own ship you balance your crew health, sail integrity, hull armor, gun reload speed, and maneuverability, making decisions moment to moment and planning what’s going to happen in ten, thirty, or sixty seconds. It’s a white-knuckle experience, whether against determined NPCs or wily players.

Sounds exciting enough and probably all too familiar to veteran Eve pilots. Of course the big difference with PotBS is that yes, you can get out of your ship and have adventures on dry land as an avatar.

I like the idea and will certainly try the game when its out (currently estimated June 2007). If successful, I hope other developers will consider developing MMOs along this line. The combination of avatar and ship based play puts every naval and sci-fi scenario imaginable into play as potential MMO material.

Who wouldn’t love to travel to a galaxy of different planets, each with different zones, cultures, economies, etc. and adventure there? Toss in asteroid mining, salvage, interplanetary trade and ship-to-ship combat and I think you’d have a winner.

One of the things I see missing from this mix though is meaningful character differentiation. Sure, you could be a merchant or a pirate or stay land/planet-bound, but fundamentally, everyone’s a captain. You’re either a solo captain or a member of a fleet of captains, each with their own ship.

If I recall correctly, Lord Nelson didn’t really have heavily armored ships in front engage the enemy while lightly armored but high damage dealing frigates pummeled them from afar. Nor did they have chippie tenders running about repairing hull damage, dousing fires, repairing sails and healing wounded crew members. From what I can tell, PotBS wont either which brings me (finally) to my point: Whither group play in these multi-modal MMOs? (I can’t think of a better term for them, so since you are basically playing either as a ship or a traditional avatar, I’m considering each a modality.)

Are encounters simply the equivalent of two full parties of mages frost bolting each other into oblivion from afar? Not that I’m against that sort of thing, but I’m a zealot for small, tactical group play. I like having to depend on and adapt to the different strengths and weakness of each of my differentiated group mates. In a multi-modal MMO you are either the ship or the avatar. Why does everyone have to be a captain? Why not a ship and crew members who contribute their differentiated skills toward the group effort in ship-bound mode?

As you can imagine, this raises lots of design problems. Not the least of which is who owns the ship, if anyone. However, that doesn’t seem like such a huge hurdle if player progression allowed new recruits to crew on navy ships (NPC) or privateers (player owned) to gain experience and the gold necessary to ultimately buy their own ships and hire a crew.

Engage

Star Trek Online (slated for release in Q1 2008) appears to be tracking in this direction, but sounds like it will stop short of having truly independently owned and directed cooperative ships. According to StarTrek-Online.net, the largest ships which will require multiple players/professions to command will be fixed player “hubs.” Its still a little unclear how this is supposed to work, but it could be conceptualized as a moving instanced zone once all grouped players are on board.

This mobile instance model would work for many missions, but still wouldn’t give players the kind of freedom of action that Eve does. Everyone needs to be able to climb aboard and set a course for an adventure of their own choosing in a fully populated space environment (Roll 1d6 Space Pirates!).

It seems a natural that in a game affording cooperative ship-based play that through collective action, guilds could build and increase the strength of their fleets which would require the contribution of junior members to man and operate them. What a concept. Noob guild cabin boy can stand shoulder to shoulder with guildie Admiral Uber N3lson instead of only hearing in guild chat how 40 1337 level 70 members just took down Cthulu.

I’d join that navy in a heartbeat. What a great way for new players to literally learn the ropes, advance their character, get loot and contribute to the advancement of the guild.

Not enough peeps to ship out? Hire a crew. Plenty of able bodied crew members hanging around every port. Note to devs, better create a ship’s payroll/loot system native to the game or you’ll get keel hauled.

Shiny

To me, collaborative ship-based play would seem to be the be all end all for an MMO like Firefly (expected in 2008). To really live in the ‘verse you really have to have the group ship model down. Navigator, Engineer, Gunner, Marine, etc. all contributing to the group effort planetside and in space. We can only hope that Multiverse doesn’t do what every other company has done to the Firefly franchise: screw it up and piss off its fans. Still, hope springs eternal and I’m hoping that this one will help usher in a new crop of games.

Next Gen Ho!