On February 19th, it was reported in an official statement that Cheyenne Mountain Entertainment, behind the long awaited MMORPG Stargate Worlds, had filed for Chapter 11 Bankruptcy.
Like many corporate tales, however, there’s a lot more to the saga in Stargate Worlds current state than a simple motion for bankruptcy.
Days before the announcement of bankruptcy, FireSky and Cheyenne Mountain Entertainment announced that they were entering litigation against Gary Whiting, having removed him as CEO and Chairman. Per the announcement to the press:
The Company also became aware a few months ago that Mr. Whiting, was named in a complaint filed in Utah County, Utah, (Case No. Civil 0904022438), and that he has caused the Company to be named in that same lawsuit, and he has allegedly obligated the Company for monies paid to Garvick Properties, LLC, a limited liability company controlled by Mr. Whiting (“Garvick”).
Mr. Whiting and Garvick purchased various securities from the Company and its subsidiaries and has failed to honor the terms of these purchases and has failed to pay the payments when due; therefore, the Company and its subsidiaries have foreclosed on the collateral securing Mr. Whiting’s and Garvick’s obligations including all shares and units owned by Garvick and Garrick Enterprises, LLC.
On February 24th, it was reported that the bankruptcy filing was submitted by Gary Whiting, and as such, had been dismissed.
Mr. Whiting continues to represent himself as CME and CMG in an attempt to confuse the court. The bankruptcy that Mr. Whiting filed was dismissed yesterday. The attached minute entry was notification of the assignment of a receiver which is what the plaintiffs (which is us) requested. The denial of CMG’s motion to dismiss was not CMG but Mr. Whiting’s request. Mr. Whiting and his attorney continue to represent to everyone that he is still the chairman and CEO of CME and CMG. The court has not removed Whiting but the board of directors removed Whiting and Whiting is fighting that.
And yet, further court documents from the 18th indicated there was insufficient reason to remove Whiting from the Board of Directors:
As to Plaintiffs’ request for a TRO, the Court finds insufficient grounds to remove Mr. Whiting and Mr. Safiulla from the board of directors; the Court similarly finds insufficient grounds to appoint independent directors to the board of directors.
No official statements have confirmed or denied that Whiting has officially been severed from the company, or whether the bankruptcy filing is still being pursued or is in attempt for dismissal.
However, the story gets deeper. On February 26th, some anonymous tips (confirmed by some members of the SGW community) indicated that there were massive layoffs at CME/Firesky. However, a week after these tips were submitted to the community, there is again no official word or denial of layoffs, other than the continued presence of CME/FireSky staff in the SGW and Stargate: Resistance forums.
Move to today, where a public complaint was filed by (if the identity is to be believed) Clyde Clifford, one of the members of Firesky’s Board of Directors. This complaint isn’t against Gary Whiting, however – it’s against Tim Jenson, president and CEO of Cheyenne Mountain Entertainment.
The complaint alleges that Tim Jenson, who was previously investigated for corporate takeover by the SEC, has taken action to complete corporate takeover of Cheyenne Mountain Entertainment, transferring assets to Knowledge Relay, of which he is the CEO. “Clyde” claims that Jensen’s plan was to:
1. Anonymously defame the officers of the company you need to remove months in advance.
2. File a suit against the officers Tim needs to remove and accuse them of investment fraud.
3. Use a restraining order to prevent those officers from entering the premise of the company and remove relevant investment paperwork.
4. Remove old Board of Directors and file investment fad lawsuit. Create a new Board of Directors that are loyal.
5. Become majority shareholder.
6. Devalue the company so that lawyers will advise investors there is no value and no money to sue Cheyenne Mountain/FireSky.
Encourage investors to sue the removed officers creating enough time an distraction.
7. Sell devalued preferred shares and transfer assets of Cheyenne Mountain other Tim Jenson companies such as Knowledge Relay, Blue Springs LLC.
Sell shares at a preferred value to Knowledge Relay investors and Blue Springs clients.
8. Once ownership of assets have been moved to Knowledge Relay, fire new Board of Directors and file suit for securities fraud and file restraining orders.
9. Sell Knowledge Relay assets obtained from Cheyenne Mountain and Firesky for low price.
10. Compensate the majority investor (Tim Jenson) from Knowledge Relay and Blue Springs LLC and honor financial commitments with MGM who provided the license for the game title.
The complaint also alleges that Tim Jenson provided false documentation to Arizona courts that the Chapter 11 filing was removed, and that the entire staff has been laid off outside of one loyal employee. The claim appears not to be true, as several developers have posted on the message boards after the claim was made (although skeptics may argue that these are simply being posted from by the same single individual).
Unfortunately, the entire mess is officially being kept behind closed doors from the public, with only the notes from the court case in Arizona providing any sort of official capacity of news. Everything else that has come to the public’s eyes could simply be part of a large smear campaign on either side of the fence.
Keep tuned here for any new developments in the Stargate Worlds saga.
Further Developments: Because of a misunderstanding of the words “his company”, I have clarified that Tim Jenson is the CEO of Knowledge Relay. Please also read a follow-up from Steve Mauss, President of Knowledge Relay, about the allegations made in regards to Knowledge Relay.
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