Pop Culture Shock Lawsuit Update!

[ZenLogikos]

Am I reading this right?

Sounds like ignorant, irresponsible, unethical behavior at best? And only dismissed because of a technicality? Because of the distinction between "PCS" and "Culture Shock Toys"? So the case in NC will have better standing?

Also interesting is the section revealing the financials surrounding Shao Kahn. (EDIT: Wasn't factoring in total costs in profit margin calculation)

[dao2]

Originally Posted by ZenLogikos

Am I reading this right?

Sounds like ignorant, irresponsible, unethical behavior at best? And only dismissed because of a technicality? Because of the distinction between "PCS" and "Culture Shock Toys"? So the case in NC will have better standing?

Also interesting is the section revealing the financials surrounding Shao Kahn. (EDIT: Wasn't factoring in total costs in profit margin calculation)

Jerry's terrible behavior aside I don't think it strengthens the NC cause but not sure, we'll see. I think essentially what happened is while the company was run terribly it didn't hurt anybody since Jerry was the sole stockholder.

I think for them to have a case they have to show that stuff was hidden from them while purchasing and they were damaged financially by it. If they bought it full well knowing the poor situation PCS I'm not sure how they'd have a case. However none of us are lawyers and while I've been involved in some cases personally nothing related to this so I can't really comment with a lot of confidence.

[Westhelle]

Originally Posted by worstgamerever

"Culture Shock was spending customer deposits on Macaluso’s personal expenses before the factories manufactured the products or the customer had received the products

30. Although Culture Shock used an accrual accounting basis, under Macaluso,
Culture Shock treated customer deposits as if they were earned upon receipt. Culture Shock’s
balance sheets and profit and loss statements were therefore inaccurate, with Culture Shock’s
actual financial condition.

31. The effect of misclassifying pre-order liabilities as revenue is that it made the
company appear more valuable than it actually was. The misclassification made Culture Shock
appear as if it had higher revenue and fewer liabilities than it actually had."

(page 5 of court records)

And this same individual comes here to tell us, the ones funding his spending habits, that he has won? I can't imagine I was one of those funding this habit since SOTA Toys

Morality has hit an all-time low in 2020

I'm an accountant in Germany and now that I have read the whole report I'm furious about the verdict. How is Jerry not facing jail time for mishandling funds, accounting fraud and tax evasion??

I thought Jerry was just a bad businessman and stole only a few thousand of dollars at best, but this douchebag took almost a million for personal expenses and left Ant with massive debts in refunds.

Mad respect for Ant to at least given store credits for Jerry's scammed customers.

[ukshaun]

So, does Jerry have to hand over the statue?

[Westhelle]

Originally Posted by ukshaun

So, does Jerry have to hand over the statue?

No, but then again, would you really want a statue from Jerry now?

[ukshaun]

Originally Posted by Westhelle

No, but then again, would you really want a statue from Jerry now?

They paid for it. He should hand it over. If pre_orders amounted to enough, then i'd imagine it would get the go ahead.

Failing that, Ant might choose to unleash his anger on the statue in some for of retribution, and video it!
'This One's For You Jerry!..' (swings baseball-bat).

[candyrocket786]

Sounds like a complete clusterf**k.

[ZenLogikos]

Originally Posted by Westhelle

I'm an accountant in Germany and now that I have read the whole report I'm furious about the verdict. How is Jerry not facing jail time for mishandling funds, accounting fraud and tax evasion??

I thought Jerry was just a bad businessman and stole only a few thousand of dollars at best, but this douchebag took almost a million for personal expenses and left Ant with massive debts in refunds.

Mad respect for Ant to at least given store credits for Jerry's scammed customers.

See, that's what I thought, but my legal-eze is subpar. So yeah, how isn't he liable?

It reads like, just because he admits to having no financial acumen, things are 'all good'.

So we're back to what dao2 said - that Ant and Mark must have known the situation before buying?

[Westhelle]

Originally Posted by ZenLogikos

See, that's what I thought, but my legal-eze is subpar. So yeah, how isn't he liable?

It reads like, just because he admits to having no financial acumen, things are 'all good'.

So we're back to what dao2 said - that Ant and Mark must have known the situation before buying?

No, it says in the document, that the finances and accounting were inaccurate. I mean this is crazy, how did Jerry pay taxes if he doesn't even record his finances accurate?
My best bet is that Ant and his business partner acquired the shares with it's debt without their knowledge, WHICH IS WHY IT'S ILLEGAL IN THE FIRST PLACE TO HAVE FLAWED FINANCIAL BOOKS.

The verdict should be re-phrased into "Jerry is too freaking dumb to be held liable".

[dao2]

Originally Posted by ukshaun

So, does Jerry have to hand over the statue?

No but he has to pay 270K + interest

Seriously wow on jerry posting these like it cleared his name or something though :|

There is 2 claims brought though from this document:

1) The Court limits its ruling to the breach of contract/conversion claims related to the statue (the Fourth, Fifth and Sixth Claims for Relief)
This is the Shao Kahn statue I believe

2) Breach of fiduciary duty/wrongful distribution claim (First and Third Claims for Relief).

The statue is relatively clear so here is the answer to the first claim

66. As Macaluso was the sole officer and shareholder at the time Culture Shock made
the distributions complained of, the claim for fiduciary duty fails.
67. Given that he was the sole officer and the sole shareholder, all of his conduct
certainly inured great benefit to, himself, the sole shareholder.
68. No one that owned shares before the Closing Date was harmed or impaired by
Macaluso’s conduct.
69. Judgment on the fiduciary duty claim, therefore, is entered in favor of Macaluso
and against Culture Shock.
72. This claim can only be brought by “creditors of the corporation whose debts or
claims arose prior to the time of the distribution to shareholders” or by holders of shares having
preferential rights “to the extent the applicable shares with preferential rights were outstanding at
the time of the distribution.”

Basically from what I understand, and this is basically repeating what I said before, while it is a terrible job he didn't hurt any other shareholders cause he was the only share holder. Since they aren't suing because the company was misrepresented during the sale (maybe it was or wasn't I have no idea).

This bit is also interesting:

"While PCS has the ability to challenge these financial transactions, which apparently it is challenging in North Carolina, on this basis Culture Shock does not."

So more on this is going to be in the NC case. Just in terms of the charge of breaching his fiduciary duty to the company they did not win (because he had no fiduciary duty cause no one else had a stake).

Also in regards to tax evasion and stuff that's not going to be related to a civil suit with PCS. That's the IRS, state tax department, whatever's job. I'm pretty sure an individual can't sue another individual for tax fraud only the government can. Nor is there jail time in a civil suit from what I know, it should just be monetary.;p