07-07-2004, 08:17 PM
Posted 07/07/04
Source Newsarama
Continuing with its Chapter 11 proceedings, CrossGen has filed reams of paperwork with the bankruptcy court. First up is the statement of financial affairs, which must be compiled by every debtor. Newsarama has acquired a copy of the papers.
The statement reveals much about CrossGenâs inner working for the past few years, starting with income. The company saw income of $5,293,675.00 in 2002 (from sales and licensing); $5,453,221.00 in 2003 (from sales, licensing, and the sale of MegaCon); and $910,946.00 from the beginning of 2004 until the filing of Chapter 11.
The statement also lists amounts paid to creditors within 90 days immediately proceeding the commencement of the case. Of these creditors, 580 Industrial, the landlord of CrossGenâs space is still owed $130,00.00. Andy Smith, who sued for monies owed, was paid $1,960.00. Worldwide Express, CIT Group, and Zeno Office solutions are other creditors who were paid in the last 90 days, but to whom CrossGen still owes five figures or more.
In the listing of creditors (who qualified as insiders) who were paid in the year prior to filing, amounts still owed are listed as well. Among them:
Mark Alessi â still owed $5,382,665.00.
Jennifer Hernandez (VP, Director and General Counsel) â still owed $38,050.17.
Pam Davies (former VP of production) - still owed $8,207.05.
Chris Oarr (former VP of Sales) â still owed $557.80.
Beth Wider (former VP of Education) â still owed $7,288.47.
Barbara Kesel (former VP Creative Development) â still owed $6,992.41.
William Rosemann (former VP, Publishing) â still owed $930.46.
The filing also showed that CrossGen has had ten suits filed against it in the previous year. Parties suing CrossGen (all for contract dispute) include: ADP Small Business Services (payroll system), American Express Travel Related Services (in discovery process), Andrew Smith (unpaid freelancer), Choicepoint Services (landlord), Coca-Cola, GCO LLC, MV Creations, Oakwood DC, LLC, and Reed Business Information (complaint filed).
Under losses suffered by the company in the year immediately preceding the commencement of the case, four losses are listed:
Original artwork from Way of the Rat #1 (valued at $6,750), about which the filing states: âIt is believed that a disgruntled former employee himself or with other now former employees removed the originals from the offices of the debtor.â The date of loss is listed as summer/fall of 2003.
The previously reported alleged misuse of company credit cards is listed as a loss as well, to the tune of $23,000, with the filing stating: âSeveral now former employees each and together conspired to use the company American Express card for personal charges.â
Petty cash and other financial benefit (at a value of $7,000) is also listed as a loss, with the filing: âIt is believed that the former CFO of the company took cash and other benefit for his own personal use.â
Finally, the theft of a cel phone is listed as a loss, at a value of $1,878.51. The filing states: âA former employee took a company cell phone and made calls after he was laid off.â
Other points of interest:
MegaCon was sold to Beth Widera for $225,000.00.
Listed under property held for another person are the Code 6 properties with a breakdown:
JM DeMatteis owns a 25% interest in Abadazad, Mike Ploog owns a 10% interest in the same. Robert Rodi owns a 25% interest in The Crossovers, and Robert Salvatore owns a 49% interest in both Demon Wars and Demon Wars: Grave Mungo Story.
The last is particularly interesting, as both the Abadazad and Crossovers creators held (or split) 25% of the ownership of the property, as was explained in the Code 6 FAQ; although Salvatore held 49% of each of his.
<!-- m --><a class="postlink" href="http://www.crossgen.com/cgentertain...e%206%20faq.asp">http://www.crossgen.com/cgentertain...e%206%20faq.asp</a><!-- m -->
As the Code 6 FAQ stated under the question of the 75%-25% being negotiable: âNo. All agreements for new Code 6 properties will be based on the same percentage split. Anyone submitting to Code 6 for publication will be expected to accept these terms.â
As part of the filing, CrossGen also listed all parties to whom a financial statement was issued within the last two years prior to filing. While the list is long, and mostly made up of venture capital groups and potential investors, there are some standouts including: DPS Film Roman, former Marvel President Eric Ellenbogen, composer Graeme Revelle, Marvel Enterprises, Spyglass Entertainment, Perot Systems, Sony Pictures, Warner and Brothers.
The stockholders in the company break down as: Alessi: 72.6%;Jennifer Hernandez: 5%; Nancy Newhouse Porter (entertainment attorney): 1%; Safe Harbor Managed Account 101A 19.4%; and Michael Uslan: 2%.
As of the filing, CrossGen has not taken a physical inventory of its products, stating that it relies on its printer and distributor to track and supply inventory reports. The latest inventory reports are attached, with Bull Dog holding nearly 700,000 CrossGen books; book distributor CDS holding in the neighborhood of 100,000 books, Quebecor holding 217,052 books and related printed products, and Diamond holding roughly 30,000 copies of more recent titles. In a glimpse of the cold hard reality of comic book publishing, Diamondâs inventory lists several of the CrossGen overstock titles, including more recent Brath and Lady Death as product to be destroyed.
In a separate filing of a motion for the court to approve the officerâs compensation, CrossGen requested that both Alessi and Hernandez retain their pre-filing monthly salaries (including benefits) of $10,000 and $5833.33 a month, respectively.
In another filing, CrossGen stated that it supplied approximately 285 comic book retailers with comic series, and is seeking a purchaser for its intellectual property. In the same filing, CrossGen also requested the court instruct local utilities to continue service to CrossGenâs offices.
CrossGen has also requested that the court approve of, in an expedited manner, a post-filing request for financing in order for it to meet its day to day expenses. If it does not receive the funding, CrossGen stated that it would not be able to carry on monthly operations or make lease payments on its facility. The Lender for the infusion of cash: Mark Alessi, who, upon the courtâs approval, loan CrossGen up to $150,000 to continue operating. In loaning the amount to the company, Alessi seeks a lien upon CrossGenâs collateral that is not otherwise encumbered.
The company estimates that its monthly expenses for July will run roughly $91,700, while income during that same period will be $12,200.
Source Newsarama
Continuing with its Chapter 11 proceedings, CrossGen has filed reams of paperwork with the bankruptcy court. First up is the statement of financial affairs, which must be compiled by every debtor. Newsarama has acquired a copy of the papers.
The statement reveals much about CrossGenâs inner working for the past few years, starting with income. The company saw income of $5,293,675.00 in 2002 (from sales and licensing); $5,453,221.00 in 2003 (from sales, licensing, and the sale of MegaCon); and $910,946.00 from the beginning of 2004 until the filing of Chapter 11.
The statement also lists amounts paid to creditors within 90 days immediately proceeding the commencement of the case. Of these creditors, 580 Industrial, the landlord of CrossGenâs space is still owed $130,00.00. Andy Smith, who sued for monies owed, was paid $1,960.00. Worldwide Express, CIT Group, and Zeno Office solutions are other creditors who were paid in the last 90 days, but to whom CrossGen still owes five figures or more.
In the listing of creditors (who qualified as insiders) who were paid in the year prior to filing, amounts still owed are listed as well. Among them:
Mark Alessi â still owed $5,382,665.00.
Jennifer Hernandez (VP, Director and General Counsel) â still owed $38,050.17.
Pam Davies (former VP of production) - still owed $8,207.05.
Chris Oarr (former VP of Sales) â still owed $557.80.
Beth Wider (former VP of Education) â still owed $7,288.47.
Barbara Kesel (former VP Creative Development) â still owed $6,992.41.
William Rosemann (former VP, Publishing) â still owed $930.46.
The filing also showed that CrossGen has had ten suits filed against it in the previous year. Parties suing CrossGen (all for contract dispute) include: ADP Small Business Services (payroll system), American Express Travel Related Services (in discovery process), Andrew Smith (unpaid freelancer), Choicepoint Services (landlord), Coca-Cola, GCO LLC, MV Creations, Oakwood DC, LLC, and Reed Business Information (complaint filed).
Under losses suffered by the company in the year immediately preceding the commencement of the case, four losses are listed:
Original artwork from Way of the Rat #1 (valued at $6,750), about which the filing states: âIt is believed that a disgruntled former employee himself or with other now former employees removed the originals from the offices of the debtor.â The date of loss is listed as summer/fall of 2003.
The previously reported alleged misuse of company credit cards is listed as a loss as well, to the tune of $23,000, with the filing stating: âSeveral now former employees each and together conspired to use the company American Express card for personal charges.â
Petty cash and other financial benefit (at a value of $7,000) is also listed as a loss, with the filing: âIt is believed that the former CFO of the company took cash and other benefit for his own personal use.â
Finally, the theft of a cel phone is listed as a loss, at a value of $1,878.51. The filing states: âA former employee took a company cell phone and made calls after he was laid off.â
Other points of interest:
MegaCon was sold to Beth Widera for $225,000.00.
Listed under property held for another person are the Code 6 properties with a breakdown:
JM DeMatteis owns a 25% interest in Abadazad, Mike Ploog owns a 10% interest in the same. Robert Rodi owns a 25% interest in The Crossovers, and Robert Salvatore owns a 49% interest in both Demon Wars and Demon Wars: Grave Mungo Story.
The last is particularly interesting, as both the Abadazad and Crossovers creators held (or split) 25% of the ownership of the property, as was explained in the Code 6 FAQ; although Salvatore held 49% of each of his.
<!-- m --><a class="postlink" href="http://www.crossgen.com/cgentertain...e%206%20faq.asp">http://www.crossgen.com/cgentertain...e%206%20faq.asp</a><!-- m -->
As the Code 6 FAQ stated under the question of the 75%-25% being negotiable: âNo. All agreements for new Code 6 properties will be based on the same percentage split. Anyone submitting to Code 6 for publication will be expected to accept these terms.â
As part of the filing, CrossGen also listed all parties to whom a financial statement was issued within the last two years prior to filing. While the list is long, and mostly made up of venture capital groups and potential investors, there are some standouts including: DPS Film Roman, former Marvel President Eric Ellenbogen, composer Graeme Revelle, Marvel Enterprises, Spyglass Entertainment, Perot Systems, Sony Pictures, Warner and Brothers.
The stockholders in the company break down as: Alessi: 72.6%;Jennifer Hernandez: 5%; Nancy Newhouse Porter (entertainment attorney): 1%; Safe Harbor Managed Account 101A 19.4%; and Michael Uslan: 2%.
As of the filing, CrossGen has not taken a physical inventory of its products, stating that it relies on its printer and distributor to track and supply inventory reports. The latest inventory reports are attached, with Bull Dog holding nearly 700,000 CrossGen books; book distributor CDS holding in the neighborhood of 100,000 books, Quebecor holding 217,052 books and related printed products, and Diamond holding roughly 30,000 copies of more recent titles. In a glimpse of the cold hard reality of comic book publishing, Diamondâs inventory lists several of the CrossGen overstock titles, including more recent Brath and Lady Death as product to be destroyed.
In a separate filing of a motion for the court to approve the officerâs compensation, CrossGen requested that both Alessi and Hernandez retain their pre-filing monthly salaries (including benefits) of $10,000 and $5833.33 a month, respectively.
In another filing, CrossGen stated that it supplied approximately 285 comic book retailers with comic series, and is seeking a purchaser for its intellectual property. In the same filing, CrossGen also requested the court instruct local utilities to continue service to CrossGenâs offices.
CrossGen has also requested that the court approve of, in an expedited manner, a post-filing request for financing in order for it to meet its day to day expenses. If it does not receive the funding, CrossGen stated that it would not be able to carry on monthly operations or make lease payments on its facility. The Lender for the infusion of cash: Mark Alessi, who, upon the courtâs approval, loan CrossGen up to $150,000 to continue operating. In loaning the amount to the company, Alessi seeks a lien upon CrossGenâs collateral that is not otherwise encumbered.
The company estimates that its monthly expenses for July will run roughly $91,700, while income during that same period will be $12,200.
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