Pen-Elayne on the Web

Damage Control

Looks like our hero Captain Equinox has been very busy! Maybe it's the time of year, or maybe it's the time of man, but here are updates on two stories I've been following closely:

Two government agencies are now investigating JetBlue, again not in response to CAPPS II (which after all is a government-generated spying-on-citizens program) but because it violated its own policy by giving 5 million passenger itineraries to Torch Concepts - which, while a Defense Department contractor, is still a private corporation. See my entries here and here for more background on this. You know you may be in trouble when even Tom Ridge's boys think you've gone too far.

Via Newsarama: CrossGen Comics spoke with Publishers Weekly about their financial woes. The relevant sentence seems to be the following:

"We're in the process of finalizing a second round of financing," said Chris Oarr, CrossGen's director of marketing and sales. "My understanding is that you will be writing a very different story in about five days."

As the wife of someone who's been owed $1300 from them for months, I sincerely hope this is true. Interestingly, the article says, "In July and August, several CrossGen freelancers went public with complaints that the company had not paid them for their work," but I don't know of anyone who went public before we did on August 13. In any case, Rich Johnston's rumor column contains the following additional info:

MV Creations current imprint/publisher of He-Man comics for CrossGen, are in a slight pickle. There have been allegations from MVC that a previous publisher still owes them money for printing errors on their titles - an allegation a representative of that publisher implies is not correct. There seems to be a definite parting of ways between the companies on this issue.

Either way, the much-reported financial problems at their current publisher, CrossGen, have definitely left them owed payments from that front. And a change in CrossGen scheduling may have delayed certain issues, with a knock on effect on cashflow. As a result, certain freelancers are getting partial payment or delayed payment. Certain titles are currently on hiatus and other titles may be delayed... CrossGen declined to comment. MVC's Val Staples would only add "I think it's fair to add that CrossGen has turned over purchase orders to MVCreations so we can start producing the books on our own while they sort out their current affairs. We're thankful for that, at least.

"We have a lot of books that have been done for months just waiting to make their way to the shelves. Now it's time to get the titles and the payments to creators caught up."

Naturally, CrossGen have been cutting a few corners here and there. Aside from their monumental convention displays of course... So where did CrossGen's financial woes originate?

It appears that CrossGen borrowed a lot of money from a venture capital firm called Blue Ridge Investors II in Atlanta, GA - a company they have worked with a number of times. However, on the 9th of July, Blue Ridge and CG filed documents for an additional loan through to July 2008. Crossgen has also borrowed from IOS Capital and CIT Technology. The IOS capital loan is due to be paid back in 2006, so they need to start generating profits, or IOS can put a lien on their business. This also means that in 3.5 years, they have needed four infusions of venture capital to keep afloat (and are having trouble paying creditors when the fourth backed out).

As of the beginning of this month, CrossGen had not yet found a new source of funding.

Anyone who placed a call to the Crossgen offices on Wednesday the 17th got a message basically saying that the Crossgen staff had taken the day off to celebrate their "new beginning" and would return to normal business hours on Thursday.

Maybe they've got some more cash?

Well, as autumn is the season of turning leaves, let's hope both these stories have positive outcomes!