Issue # 1 THEWESTENDSAGA
A DUNGEONCRAWLTHROUGHBANKRUPTCY TO REBIRTH
In the beginning… every sad story has a million starting points – if only Hercules and Xena had released on time; if only the Men in Black approvals process had run more smoothly; if only higher management had been paying attention to West End’s cost structure instead of trying to find financing for a dying sister shoe company… however, this is not a modern dress rerun of Richard III – there was a want of a nail and the horse was lost.
It was July. Our financing had been cut off. We had $150,000 in receivables; $1,400,000 in inventory, and $45 in the bank. Your classic liquidity crisis. Stage direction: enter management, fleeing to bankruptcy court in White Plains, scene of their prior shoe bankruptcy.
So where do we sit some two months later:
1. Alive: We have been paying our bills promptly since bankruptcy out of current cash flow.
2. Much smaller: We are down from 30 people to some 7 to 10 depending on exactly who is counted and how. We have the hard core of a creative staff and enough other folks to ship orders and do the court’s paperwork.
3. Licenses: we’ve definitely lost Men in Black. We’ve definitely stopped DC Universe. The rest may be regarded in varying states of limbo.
4. We are still open for business: Jeff Kent, Sue Hartung and Scott Palter are still handling sales. We are still selling the inventory we have (all $1.4 million of it at cost – say $13 million at retail). We have the next Hercules and Xena product: Gazetteer of the Ancient World ready to go – as soon as final negotiations are completed with Universal we will announce a release date. DC Universe, while suspended, is basically ready and may find a new home, or may again find a home here, if any of our many new financing hopes comes through and, DC so wills it. We have several other pending projects that we are not at liberty to divulge.
5. What is the plan?: To sell off the inventory while issuing some new product. We hope to present a plan to the court by mid-October allowing for a substantial repayment to our many creditors over time (there being only so much TORG, Shatterzone, etc. that can be sold per month). The plan would be a 3-6 year payoff followed by a formal reorganization and reemergence from bankruptcy. All this depends on court and creditor approval.
In large measure, our fate is in the hands of a few large financial institutions and our legion of unpaid freelancers. A quick dissolution will leave no one but our main bank with anything. A slow liquidation will get a large chunk of money (say 30% or more on the dollar if everything goes well) to our freelancers. Remains to be seen if we roll enough sixes on the Wild Die to stay alive, but that’s the plan.
h6. Anyone wanting to be on the update list please e-mail me at DSPWEG@HOTMAIL.COM or fax me at 717-253-5104.