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]

4 thoughts on “Perpetual Litigation”

  1. Heh, talk about being conflicted. The gamer in me finds it distasteful. The business owner, on the other hand, finds it fascinating.

    You’ve really got to wonder who was advising Perpetual mgmt, tho. They had to know this type of thing was going to result, unless they thought they could keep everything under wraps and it all snowballed on them due to the Gravity filing.

    I’m finding I can’t get too down on them, tho (although I haven’t had time to untangle a who’s who out of the mess yet… specifically whether ownership/management is changing drastically)… at present, this seems to smell a lot more like a desperation move to buy time to get to market than any real intent/attempt to rip off creditors and walk away with cash.

    I’d probably be pretty tempted to take some of the same risks in a similar situation, with all the usual self-delusional “I’ll make it up to them later” justifications…

  2. P.S. BTW, I’m not saying it was a proper thing to do, regardless… just (potentially) a trap I could see myself falling into as well lacking solidly impartial guidance. Wanted to clarify that…

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