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Thursday, November 20, 2014

Let's Open our Books to Chapter 7 - Centerstage Miniatures Files for Bankruptcy (No Surprise There)

Our New "Fucked up Kickstarter Mascot" thanks to Jim Magnusson
So, remember they fiasco otherwise known as CenterStage Miniatures various Kickstarters, in particular Tome of Horrors Complete - 28mm Heroic Scale Miniatures. Well, it appears the final shoe has dropped - Chapter 7 bankruptcy has been filed. Now, like true venture capitalists, backers can expect to get back pennies on their dollars - if they are lucky. Woot!

From the comments on the Tome of Horrors Complete Kickstarter from earlier today (not my comments - I didn't back this train wreck):
After filing a complaint with the Ohio Attorney General’s Office last week, I received 2 correspondences from the attorney Matt has retained to file Chapter 7 Bankruptcy. It was clear in the letter, and his response to my questions, that he (the attorney) is still waiting on Matt to provide a bunch of documents so that they can proceed with the Chapter 7 filing. It looks like we are considered “customer deposit creditors” in this case, (but remember, I Am Not An Attorney).  
It was mentioned that there was a review of the possible sale of his business by Mortal Arrow LLC, but the bottom line was that Matt realized it would not resolve all the problems or guarantee that all creditors would be paid (that could mean us, or other businesses/entities). It was emphasized that Matt was not happy going this route, but it seemed inevitable.
So from here (once all the paperwork is filed, court costs paid, etc. , there will be a Court supervised liquidation sale. The attorney indicated that “For the purposes of distribution in the Bankruptcy context, consumer deposits for undelivered services and products have the highest priority under the Bankruptcy Code.  
He also indicated that a business entity might be willing to purchase the inventory, molds, customer list/goodwill of the business for a significant enough sum from the Bankruptcy Estate to warrant a meaningful distribution to creditors  
When the Bankruptcy case is filed, all creditors will receive notice in the mail of the date set for the “debtor’s examination” and other terminal dates. You may attend the Debtor’s examination or you may review the Petition once filed. It is public record and It will disclose all assets and all creditors. 
So, there you have it. A Shit sandwich for all.

The success of the various Kickstarters killed CenterStage Miniatures as they apparently failed the basic math of funding less fees (Amazon & Kickstarter) less additional cost of generous stretch goals must => cost to fulfill and ship rewards.

Again, thanks to +Jim Magnusson for the generous use of his art ;)

6 comments:

  1. The attorney failed to mention that "paying the attorney" has even higher priority than '...consumer deposits for undelivered services and products have the highest priority...'.
    Might have to chop those pennies up alà 'pieces of eight'.

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  2. If I don't get my money back (or even a significant portion thereof), at least the company is (will be) defunct - and deservedly so.

    Hopefully someone will buy pieces of the pile - I don't care who - so I can get a little more of what I wasted back.

    At least the Reaper Kickstarter, the playing card Kickstarters, and the Red Box Games Kickstarter (amazingly enough) all turned out OK.

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  3. I still don't know exactly what a Kickstarter is (twice-brewed Snake Oil, it seems) but I'm becoming increasingly grateful that it doesn't exist in my everyday life. Is it a fantasy version of a junk bond?

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    1. Kickstarter is a crowdfunding site (Kickstarter.com) where any number of projects, not just games or fantasy by a long shot, ask for funding. It's not snake-oil, by any means, but there are plenty of people who abuse the system. However, I've backed several, and have received the reward - the item, game, what-have-you - that was promised for each one. I tend to hedge my bets with it by supporting known quantities, companies or people who have a proven track record, or who can provide proof that something is actually in the works. For example, I supported two of Reaper Miniatures' Kickstarters, both of which generated a ton of money, and received the reward for the first one last year - and it was spectacular. But I didn't expect anything less from Reaper, a well-known minis company with a track record for quality and dependability.

      Erik's analysis in the final paragraph is spot-on; a lot of those who turn to Kickstarter for funding lose track of just how much they promise, and get into trouble when their promises outstrip their funding. Plus there are people who simply flake out and disappear with the money. But the vast majority of projects that are funded do result in something for those who support them.

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  4. Sad. I hope he finds a reputable buyer for the Julie Guthrie molds he bought from Mega Minis. Remember those? They were wonderful minis and I have a metric-ton of them in my bins. I just hadn't gotten around to getting them all before I went quiet for awhile and then MM went out of biz. :(

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  5. @Michael S: I was thinking the same thing. I sure hope those molds see the light of day.

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