Main Area and Open Discussion > Living Room

Semi-happy ending to 'The Doom that Came to Atlantic City' Kickstarter campaign

<< < (2/3) > >>

wraith808:
My understanding was that was more based on several things he said he had done by way of excuses before he thought better of it - or (more likely) finally got some competent legal advice. I think it's more him realizing he'd better stop being stupid rather him getting smart per se.
-40hz (August 03, 2013, 07:31 PM)
--- End quote ---

Basically he said:

1. That it was understood that the kickstarter was for the formation of a company to distribute Doom.
2. That he had quit his job to run that company.
3. That he had moved to Portland.

Now, from a purely business-related standpoint, when you make over 100K, 1 should be a given.  There are going to be tax concerns, and having those under the Aegis of a company is smart.  But the phrasing was bad, and the timing was bad for him to say such in that manner.  As far as 2 and 3, there's no indication that he was living off of the 100K... but that is the assumption.

The burden of proof will of course be on him, but it's nowhere near a given.  People are mad, and people are speculating.

Not only did he run the kickstarter badly (apparently), but he ended it even worse.  He should have already talked to a lawyer, come up with a post mortem, and phrased it better and talked to the designers beforehand.  Those things compounded to get things where they are.

40hz:
Some dispute about #1 from many involved. Supposedly there was no mention of starting a company. Most involved said they were under the impression (never corrected) that the company was already in existence and the money was just being used to produce the game. I took a look at the Kickstarter page and there's no mention of starting a company. The entire thing reads to me like it's saying the campaign is purely to bring the game itself to market.

Then there's the 800lb gorilla in the room...that $122K which there has yet to be any accounting of. As in nada. Zip.

Strange too when you realize the initial goal was for only about a quarter of that. So...if $35K was what was needed to produce a board game...why did nothing happen even though $122K was collected. And why did Erik feel the need to supposedly do instructional videos and begin setting up tech support for a board game? (Note: on one of his resumes he calls himself a film producer!)

Then you have this new comment up on the Kickstarter project page that has several interesting revelations.

It's kinda long but interesting to read. Missing_small
Andrew Migliore about 8 hours ago

Regarding funds, expenses, and taxes.

I assume Erik has either filed taxes for 2012 and paid taxes out of these funds or has filed for an extension due in October of this year for personal taxes (or September if actually a business).

The Forking Path Co. is not a corporation (e.g. C-Corp, S-Corp, or an LLC) as far as I can tell. It is a DBA (Doing Business As) under Erik's name registered in one county of Oregon. The Public record (only filed in August 20th, 2012 which is a problem in and of itself as it was registered after the fact and is not a DBA of Inari) shows this:

http://records.sos.state.or.us/webdrawer/webdrawer.dll/webdrawer/rec/2483135/view/SOS%20-%20Corporation%20-%20Assumed%20Business%20Name%20Filing%20Records%20-%2087667391.PDF

The self-employment tax rate for 2012 is 12.3% for the first $106,800 and then 2.9% above that.

Self-employment taxes are reported on Schedule SE, which a sole proprietor submits each year along with a 1040 income tax return and Schedule C. See:

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-(Social-Security-and-Medicare-Taxes)

Expenses have to be enumerated. So the worse case would be a $14,574.85 tax bill assuming my assumptions and math are correct. The tax bill would be dependent on legitimate expenses claimed.

So regardless, Erik will soon have to account for his expenses when filing or already has done so.

From the start, the publishing side of this enterprise e.g. The Forking Path does not look like it was run as a business. I could not find any business registration records for Inari, Inc. in Oregon, Washington, California, North and South Carolina, or Delaware, however Inagi's Amazon merchant account was used to receive payments from Kickstarter. The common denominator is Erik.

Again the failure to separate personal and business concerns and the failure to give transparent information during the project and his curious external activities (registering a new business in April is the most concrete of the list... other things like the hiring of models and acquiring expensive camera equipment may be indicators), makes it look very amateur. If he truly did not insulate himself wrt to incorporating his business, Erik's personal assets are at risk.

Erik can you reconcile your statement "Inari was dissolved entirely well before this collaboration was even started..." when you used an Amazon Merchant account under the name of Inari, Inc. to receive funds for The Forking Path your DBA?

Thank you.
--- End quote ---


There's enough in there (assuming the data is correct) to make a pretty good case for co-mingling and fraud.

To my eyes it looks like Erik is hoping to mollify his critics and get as many refunds out there as possible in the hopes people will back off and not pursue legal remedies against him.

I wish him luck. :o

wraith808:
Oh.. I know that there's dispute over 1.  That's why I said that he picked a bad time and a bad way to say that.

As far as the other, industry veterans over at BGG have chimed in that the $35k was never going to get the game made and shipped.

I'll say this... after raising over $40k for Chicken Caesar and $46k for Mars Needs Mechanics, realistically printing Doom with those miniatures was going to cost more than $35k. Shipping from China to the U.S. is $5-6k alone unless you can piggy back with someone else's order. The molding fee is $1,000-$1,500 per model. Depending on the number of copies he was going to print (I'm assuming more than 2k since he had over 1k backers), he was looking at somewhere in the neighborhood of $30-$40k just for printing. I'm pulling these numbers out of my head based on our experience printing with a high quality printer in China. If he was going for cheaper materials, he might have been able to shave up to $10k off that cost. But if it is anything like our experience, this game might have cost him a solid $50-60k to print, ship to the U.S. and then ship to backers.

--- End quote ---

And from my personal experience, if he did the right thing in regards to getting the C&D from Hasbro and had a lawyer to handle the correspondence and such... that could easily run a pretty penny right there.  Just from doing due diligence on a venture that I was in on, we ran up about 10k in lawyers fees.

This isn't to say anything one way or another, but just to say that things aren't as clear as they may seem.  Up to, and including the fact that the Forking Path could have been incorporated in *any* state.  Amateur night in the investigation business isn't going to be conclusive in court, and there's a lot that has not and is yet to be revealed.  And if he's smart, he'll realize that there are people that are really out to get him no matter what happens, and have already made their conclusions, so he'll not reveal anything until such time as he has to, and will treat this matter as adversarial.

But yeah, he has a hard road to slog ahead no matter what.

wraith808:
Oh... another post on a BGG thread... very interesting look at the other side, and it seems that what I was saying is true... he's clamming up under legal counsel.

Wow, doesn't this Erik guy have any friends around here at all? I mean, people who know him? He is a board game enthusiast in a major metropolitan area after all....

... Oh wait. That's me.

Yes, I'm a friend of Mr. Chevalier. In fact, I'd go so far as to say I love the boy. I imagine my presence and words are dead to most of you after saying that, but my friendship with Erik is more important to me than popularity. With so much vitriol tossed around about him these days, it would be smarter (well, safer) to just sit idly by. However, after biting my tongue these last few days out of respect to Erik's privacy, in good conscience I can no longer stay silent. Erik is a good man--just a man who makes some pretty poor decisions from time to time.

I'm a little uncomfortable speaking on Erik's behalf, so let us be clear here: I am not. I did not work at Forking Path, and I can't speak to the details surrounding reimbursement. I am a little annoyed he hasn't spoken out publicly in defense of his own name, but I can appreciate that too. Erik isn't one to court conflict--he's a relatively reserved and shy fellow. From what he has told us, he is worried his situation will exponentially worsen if he says the wrong thing at the wrong time. Hedging his bets, he has been seeking legal counsel before moving forward.

His detractors will be happy to know he hasn't been in a good place lately. It's not lost on him that his name is tarnished, that future projects aren't promising, and many wish him serious harm. He has been hounded by the press, and is mortified about the damage he has contributed to Kickstarter's reputation (he is a big proponent of democratically rooted, grass root efforts like Kickstarter--a means of bypass the traditionally corporate control of funding which mollifies artistic expression into bland, tasteless convention).

Many of you are angry, and rightfully so: Erik promised something and failed to deliver, in a rather spectacular way. This failure, however, wasn't born from a willful intent to defraud. He didn't see a payday without strings--every word he communicated to his backers about issues (from legal to printer concerns) were rooted in truth. His heart was (and still is) sincerely in the right place. He wanted to deliver on the Doom, which only stands to reason since he would have little reason to establish a game company (or, as some are claiming, looking into Knizia licensing options) unless he foresaw a positive future for Forking Path. He never went into this with the intent to fail. Fraud was never an intent.

I am *very* close with Erik. We've been roommates, and I speak with him regularly. I've seen him on top of the world, and I've seen him emotionally broken. He is just a person who got in over his head--nowhere near the villain he is being made out to be.

I know a lot of the story, but I've intentional avoided addressing any of the misconceptions being aired in this forum. That is Erik's place, and responsibility. However, two points I will address:

1. Inari was under no obligation to repay any of the money Joystiq Labs incubated it with. I can say with 100% confidence that not a penny of the backers' support went into that. The troubled incubation of Inari had more to do with personnel than a desire to misappropriate funds.

2. I'm no expert on the details surrounding the Hasbro injunction, but I believe Erik contests whether the art assets he was provided in late 2012 appeased the issue.


I don't hang around here much, but if you have anything to ask, I will respond sometime tomorrow.

--- End quote ---

40hz:
Forking Path could have been incorporated in *any* state
-wraith808 (August 03, 2013, 08:59 PM)
--- End quote ---

True. But that's fairly easy to run to ground. You check via the SoS for the state it's present in, plus the states it could rationally be expected to be incorporated in, plus Nevada and Delaware.  99.9% of the time you'll spot the registration if one exists. You can also drop about $125 and get a basic D&B report on most businesses that will give you that along with other useful information about the company.

But the simple fact there's no Corp., Inc., or LLC being used tells me this isn't a registered corporation anywhere. You can't put that "alphabet soup" after your legal business name if you aren't registered. And if you are, you must use it when issuing any 'official' communication in the name of  the firm.

Regarding amateur investigation - true - what they dig up likely won't ever get used in court. But enough of it may attract the interest of a state attorney enough that his/her office decides to look into it. Because, truth be told, it will usually take a lot more than $122K of potential fraud (at least in most places) to attract their attention unless there's major public outrage or some favorable "big press" might come of it. (Elections coming up soon!)

Navigation

[0] Message Index

[#] Next page

[*] Previous page