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Infinium Labs Countersues HardOCP
loftydog writes "Gamespot is reporting that our favorite console manufacturer has thrown down a gauntlet in Florida. Seems they didn't want to play in Texas with HardOCP. Turns out that SCO doesn't have a corner on the lawyer market after all, and we'll see something from Infinium, even if it is an overpaid suit."
Infinium Labs Vs. HardOCP - Round 2
HardOCP Press Release
Infinium sues HardOCP
[UPDATE] Phantom console maker makes good on its threats and initiates legal action in a Florida court.
Shacknews is reporting that Infinium Labs has finally made good on its threats to hardware site HardOCP and has initiated legal action. According to the report, the makers of the yet-to-be-launched Phantom PC game console filed suit in a Florida court this week over a corporate profile the hardware site ran last fall.
As of press time, calls to Infinium president Kevin Bachus had not been returned. However, HardOCP owner Kyle Bennett confirmed the company's legal action. "Yes, [but] I have not gotten all of the paper work yet," he told GameSpot. However, what Bennett has seen does not bode well for a short legal battle. "It seems as though Infinium Labs and [CEO] Tim Roberts personally have filed suit against us," he said.
The legal maneuvering started last month when Infinium sent HardOCP a letter saying they would sue the site for defamation if it did not retract the article, which painted a less-than-flattering portrait of several executives. HardOCP promptly refused, then filed a preemptive suit in a Texas court against Infinium.
GameSpot will have more information on this breaking story as it becomes available.
They have $42 IN CASH!!
t ml
They have spent more money on legal fees than they've spent on development of the console.
See it all right here:
http://biz.yahoo.com/e/040322/iflb.ob8-k.h
In response to the HardOCP lawsuit (http://www.videogamestumpers.com/images/Infinium% 20Motion.pdf), IL claimed that they didn't have a corporate presence.
k .html
Check out the leases section of their 8K filing however:
http://biz.yahoo.com/e/040322/iflb.ob8-
"Infinium leases office space in Sarasota, Florida and Richardson, TEXAS under operating leases that expire in 2009 and 2007, respectively. Minimum future rental payments under these leases are as follows"
No, truth is NOT a defense to libel. There are many other factors involved. It is quite possible for a 100% true statement with absolute proof to still be libel. See a lawyer for more information.
http://biz.yahoo.com/e/040322/iflb.ob8-k.html
"Are you on some kind of medication?"
"No"
"Well, you should be."
--Bean
Courts have a specific jurisdiction. A court in New Jersey cannot litigate over someone who has never been there, for example. Imagine having to defend yourself in a place you have never been. This is just common sense and fair play.
However, nothing really is commonsense in the law. Rendering people immune from suits in a state they have never been makes sense. However, people started to structure their affairs so that they could only be sued in one state despite doing business in many. Eventually, courts adopted a common sense approach to guarantee "fair play". The case is International Shoe. Seriously. Heh.
A NYC lawyer blogs. http://www.chuangblog.com/
Once again, the slashdot editors skew the debate by misstating the situation.
This isn't a "countersuit" because HardOCP DIDNT SUE infinium labs. They requested a declaratory judgement as a way of getting a judge to declare legal threats on infinium's part impotent.
It happens in a courtroom but it isn't "suing".
Infinium Labs actually caused damage in Texas. Their legal threats were on a business in the state of Texas and therefore subject to Texas law. This is similar to what happens when an anti-spammer sues a spammer in the anti's local jurisdiction. The damage caused by the spammer is to the recipient and therefore is in local court's jurisdiction. [H] sued in the right court.
A latest check of the docket shows that the Infinium Labs lawyers forgot to file a Certificate of Interested Persons with the court. It's just a list of people who a financial stake in the outcome of the case. When it is filed on Infinium's part, it could provide a look at the backers of Infinium and who else is financially involved with the company.
In other news, the court ordered a mediation meeting as part of the process to get the two sides to settle. This has to happen by April 23rd. It's intended to be a face-to-face meeting with all parties, but I expect Infinium to go pro se and do a telephone conference. If a settlement can't be reached, then both sides will file a report to the court explaining why.
Until the Certificate of Interested Persons is filed, the case won't progress much until the middle of next month. I've got the docs, but haven't uploaded them my site yet being as they are from the court and none of the parties. If there's a lot of interest, I'll post 'em.
Infinium Labs has retained the following legal council in Texas. This is public information from the court docket.
Baxter W Banowsky
Banowsky Betz & Levine
790 Coit Central Tower
12001 N Central Expwy
Dallas, TX 75243
214/871-1300
Fax : 214/871-0038 FAX
Email: bwb@bblpc.com
The latest info on the case can always be found at whereisphantom.com and the Hardforum.
Links to the essential court docket documents:
KB Networks Civil Cover Sheet.pdf
Infinium Summons
Infinium Motion to Dismiss
Does anyone know what the advisory board did
Let's see, their Advisory Board consists of:
4 CEOs
1 Attorney
1 Marketing Specialist
1 Bunny Huang, "Reverse Console Engineer"
Obviously, they're designing the hardware. It's the only theory that explains their progress...
Truth is a defense to libel in the USA, it isn't in the UK but on this side of the pond we have a constitutionally protected freedom of press that allows us to tell the ugly truth about matters of public concern. Infinium is a corporation that hopes to one day sell products to the public and has begun to advertise these products even before they are available. Such companies and their directors are public concerns for the purpose of libel.
Libel, vb. 1. To defame someone in a permanent medium, esp. in writing.
Defamation, n. 1. The act of harming the reputation of another by making a statement to a third person; if the alleged defamation involves a matter of public concern, the plaintiff is constitutionally required to prove both the statement's falsity and the defendant's fault.
And just for fun, lets look at slander:
Slander, n. 1. A false, defamatory statement expressed in a transitory form, esp. speech; unlike libel, damages from slander are not presumed and thus must be proved by the plaintiff (unless the defamation is slander per se). 2. vb. The act of making such a statement.
slander per se. Slander for which special damages need not be proved because it imputes to the plaintiff any one of the following: (1) a crime involving moral turpitude, (2) a loathsome disease, (3) conduct that would adversely affect one's business or profession, (4) unchasity (esp. of a woman.) If the defamation does not fall into one of these four categories, it is called slander per quod and the plaintiff must prove special damages.
Oh how I wish this would all go away (as many of us do) This site has some interesting information on the company that some might find amusing: http://www.whereisphantom.com/ Here is a link to the companies legal representation in Texas: http://www.bblfirm.com/banowsky.html And here is a link to the companies most recent 8K filing which clearly states that they have a measly $42 in cash on hand and over 2 million in debt already. http://biz.yahoo.com/e/040322/iflb.ob8-k.html Read and enjoy a good laugh!
It's in finance-ese. I'll do as best as I can. A bit of background: Infinium is a very thinly traded company on the over-the-counter market. As of early January, shares were worth around $1/share. Currently they are worth about $5/share. They raised $15MM in late Jan, by selling 2,000,000 shares at $7.50/share.
As of January 2004, Infinium needed to come up with some cash, probably to pay their legal bills.
They found someone to borrow money from, and issued a promissory ("I promise to give you money") note. Those lenders are unnamed, but may be original investors, VC types, executives, a bank, or the lawyers themselves. The loan pays no interest.
There are 2 triggering events for the note to be paid. If they win their litigation, and the recieve more that $150K, the note must be paid. If they are enter a merger agreement within 8 months, the note must be paid. The merger does not have to be completed. I'm not sure if the note has to be paid if neither of these events occur, there's not enough information to determine that.
The note can be paid in two ways (cash or stock), and we don't know who gets to pick. The outcome for cash is obvious (Infinium gives lender $100K). Under the "stock outcome" the lender will probably get shares of Infinium at or close to the January Share price (~100K shares at $1/share). Those can then be sold on the open market.
Speculation:
The note was issued by the lawyers, partially in exchange for services rendered.
The holder of the note "gets to pick: stock or cash."
Infinium Labs was awfully short of cash. Like, probably stretching to make payroll. Without that 2nd round of financing, they were probably going to have to close their doors.
At $5/share, with 20+M shares out, this company is worth $100M. To me that seems like a heck of alot for a company with no product, brutal cash flow, and higher expenses on litigation than practically anything else.
Hope this helped.
For the 1% of you scratching your heads, going "wha...?"
here.