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id Turns Down Activision, Gets Sued
Gamespot is reporting on an article from the WSJ, stating that id software turned down a takeover bid by Activision earlier this year. Former employee Adrian Carmack, who was let go around that time, now states that his termination from the company was the result of a subtle ousting by the other owners. From the article: "... it is Carmack's contention that the other id owners deliberately rejected all of Activision's offers so they could then fire him, thereby acquiring his shares for a fraction of what the publisher would have paid for them. He claims that his fellow co-owners, which control a combined 59 percent of id, began a death-of-a-1,000-cuts-style approach to force him out--closely monitoring his hours, stripping him of privileges, and denying him access to board-related documents. The other board members also ceased redistributing profits as dividends in 2004 (for the five years prior to that, Carmack had received approximately $3.5 million per year)." Coverage also available from Gamasutra.
You guessed wrong:
According to the financial daily, Carmack--who is not related to id technical director John Carmack--is claiming that he was forced to resign his position as a director of and artist at the studio earlier this year.
It's equally possible that this is a fued over whether they should sell. After all, activision did low-ball the buy out price of the company. AC may have upset the other owners by being eager to accept the activision offer.
The policy of the United States is worse than bad---it is insane. -- Ludwig von Mises, Economic Policy(1959)
He tried to sell out the compagny in order to get 40M$ in the process, he didnt succeed, then the others didnt trust him anymore, tried to buy his shares for 20M$, he refused, got spit out and from his contract he just can get 11M$ instead of the proposed 20M$.
He now tries to get the contract broken to get more than 11M$.
Sucker.
Good point. Esp. since they are having another company do that art and game design for Quake4. It may be that they decided to take Gabe's advice and just focus on engine design....
The policy of the United States is worse than bad---it is insane. -- Ludwig von Mises, Economic Policy(1959)
The real question is whether the contract in question is valid or not, and if it is, is it applicable to this particular series of events. It's likely that AC will contend that he was fired without cause and that the contract was only meant to require him to sell if he did not perform. Id will probably counter by trying to show that he did not perform his job acceptably.
Right now there is no way to tell who is right. The guy could be compleately incompetent. He could have been fired for abusing employees. He could have been fired because he back-stabbed the other owners durring negotiations. It could be that the other owners are greedy bastards. There are plenty of reasonable explainations for both sides. That's why a court is going to have to work it out. If it was clear-cut, it would be settled out of court.
The policy of the United States is worse than bad---it is insane. -- Ludwig von Mises, Economic Policy(1959)
Like most people who maximize spending to the capacity of their income (or speculative future ability to pay interest), it was his choice to do so. There was no dire necessity for housing, food, clothing, etc which would require him to spend in excess. If he's in dire need of continuation of these funds then he should seriously think about liquidating his assets and clearing his debts, unless, of course, he thinks he can make another 3.5 million a year somewhere else.
Imagine the wealth he would have if he'd spent/saved his money wisely? Or the piece of mind he could have if he let go of the trappings of social pressure to consume? Hell, he could've funded his artistic passion for the rest of his life if he'd been frugal with his money. I suppose, though, if it wasn't his real passion, and greed alone drives his lust for income, then id is better off without him.
Given the history of the situation this situation reads like a self-spoiled over-spender having their gravy train ripped from them after sorrowly disappointing their business partners. He gambled that he could hold out for more, and got bit in the ass as a result. Now he's trying to back out of a contract he agreed to and negotiated himself.
Stabbed in the back? Hardly. He's a greedy disappointment.
If Activision offers $200M for your company, and you reject it because you consider it too low of an offer, then buying out Adrian for $11M is clearly underpaying him for his shares if he has anything more than 5% of the shares. If he's been receiving $3M+ in dividends, chances are he owns more than 5%. Note: Just because the rest of the owners have 59% doesn't mean that Adrian has the remaining 41%. Many of the remaining shares can be owned by the company in order to give away as employee stock options, sell to investors, or various other situations.
think 1.25 million in income tax, plus state income tax if you don't
So he's left with a measly $2M per year after taxes. If he put just one years worth of net into an average mutual fund he could easily be looking at $200+k per year in dividends. That's over twice what my family lives on, and we're doing just fine.
And I very much doubt the CPA told him to just piss his money away. It might not be liquid, but it's still there, invested in something that could be liquidated if he needed it.
Sorry, but he's only going to be bankrupted if he's a complete fucking idiot, and that certainly won't get him any sympathy from me.
Under capitalism man exploits man. Under communism it's the other way around.