On 12/18/2009 01:53 PM, Abd ul-Rahman Lomax wrote:
At 10:10 PM 12/17/2009, OrionWorks - Steven Vincent Johnson wrote:
When do they get to eat their cake? More to the point, how can they
get to
the cake without getting the heads cut off?
They are already eating the cake, for some years now, and the cake
continues to be baked and served to them as long as there is positive
cash flow, which there may be. And when the cash flow goes negative, the
corporation goes bust, and those who collected salaries keep the money.
And the directors may be on the hook if there are burned creditors, but
they could easily arrange that the corporation closes down without doing
that. They pay their bills, it's that simple, the directors make sure
that this happens, but they are not required legally to ensure success,
and, I'm quite sure that the investors, who will be the real losers, are
themselves involved in agreements that protect the personal property of
Steorn officers and employees.
The Developer agreement is quite well-laced with clauses that disclaim
any claims of functionality.
Absolutely. I agree completely. The officers are golden, unless
they've done something foolish like lie to their investors with regard
to something material, like how much money the company has in the bank.
BTW, anybody know where Steorn is incorporated? I don't suppose it's
Delaware, USA? (Don't guffaw too much, just because they're an Irish
company -- for years I worked for a tiny Danish company, with corporate
headquarters in California, which was incorporated in Delaware; but all
the real work was done in Massachusetts. And they weren't even trying
to do anything sleazy. It's a weird world out there.)
Just a couple nits:
-- I think it's unlikely that they're cash positive right now, if we
leave cash flow from stock sales off the balance sheet. But, that
doesn't really matter much; with repeated rounds of financing, companies
can go for years in a cash-negative, money-losing state.
-- In the United States, the directors won't generally be on the hook
whether or not they leave a trail of burned creditors. If the creditors
are stupid enough to let a free-energy company go for months without
paying a bill, they get what they deserve, and "what they deserve" from
an incorporated entity that goes bust is a few cents on the dollar. The
only funds in the pot which can be touched are funds owned by the
corporate entity.
-- Also in the United States, there is one creditor which *does* matter:
The U.S. government. A quick way to boost cash flow is to "forget" to
pony up the company's share of social security payments. This
occasionally results in company officers going to jail shortly after the
roof finally falls in.
