For those of you who aren't in the US, here is some detailed info. on what Chapter 11 Bankruptcy means.
Peter Adkinson has stated on the Gencon forums that the reason they are filing for Chapter 11 is to keep them going while they work out payments to everyone they owe.
You need to log in to see his post, so here's the full text:
Friends:
Today Gen Con is filing for Chapter 11 Bankruptcy protection.
Essentially what happened is that we lost a lot of money this year running a licensed non-Gen Con event. We owe several companies money from this show and it’s going to take time to pay them off. To protect ourselves from the more aggressive companies we have been forced to seek protection from the courts.
While this is certainly an unfortunate development it will not impact our ability to operate Gen Con Indy, nor should it affect our licensed Gen Con events in the UK, Paris, and Australia.
The way a Chapter 11 works is that we negotiate a long-term payment plan with our creditors with the assistance of the US judicial system. The courts will closely oversee our business affairs to make sure we are running the company prudently and that we have a reasonable plan to pay everyone off. Which we do. The courts also protect us from aggressive creditors so that we can continue operating.
Gen Con LLC will get through this strong at the other end. Our fundamental revenue generating asset is our Indianapolis show, Gen Con Indy. This show is profitable enough to cover our direct costs, our overhead, and have some funds left over to pay off the debts from the licensed show. It will take some time, but this is one of those situations that the Chapter 11 filing was designed for, to help good companies get through a rough situation. Everyone will eventually get paid and business will return to normal. In the meantime, Gen Con Indy carries forward without interruption. Heck, if the airline companies can do it, why not us!
I’ve learned some hard lessons about the event business over the last few years. After trying to get Gen Con So Cal to work, and then losing money on this non-Gen Con event, I’ve learned how difficult it is to run a “big show” and make money. It’s a highly speculative affair where you’re never quite sure until the show’s over whether you made money or lost, mainly because you just don’t know how many people are going to come and for how long.
So, going forward our organization is going to focus on what we do best: managing Gen Con Indy, a healthy, vibrant show that has been growing nicely ever since moving to Indianapolis.
Here is a link to the press release we are issuing today describing this filing:
http://gencon.com/2008/corporate/news-pr/releases/2008/2008.02.15.Press.aspx
As you can probably guess, there’s not a lot I can say about this publicly, due to it being a sensitive legal matter and all. I’m traveling this coming week to New York Toy Fair, so my access with be spotty, but I’ll be sure and check in at least once a day to field questions best I can.
Peter D. Adkison
CEO, Gen Con LLC
doesn't sound like Indy will be affected, good thing too, as I am planning on going to my first gencon this year!
ReplyDeleteIf the Chapter 11 is approved, Indy won't be affected - Chapter 11 basically says, "We can pay our debts back, but not as quickly as our creditors want it."
ReplyDeleteIt means that GenCon will be working with the court system to set up a payment plan (and trim the non-profitable parts of the business). If Indy actually is profitable (and I don't doubt that it is), then it won't be trimmed - it'll likely be their core income source for the bankruptcy.
If you go to GenCon, stop by the Asmodee booth and say "Hi." I'll be one of the Erics. :)
Cool, I will remember to do that, a good friend and I are kicking around the idea of going this year, should be fun
ReplyDelete