Hiring Roger Sharpe as an outside consultant to address the licensing issues was a good long-term move, but the most serious issue for Dutch Pinball (BV and Inc.) at the moment is the entity's short-term viability as a going-concern.

The two Dutch partners would be wise to hire a business turnaround specialist behind the scenes... someone with crisis management expertise, financial skills and contacts, and the ability to raise capital quickly. Regardless of the licensing concerns (which appear to be real), DP is facing a potential liquidity crisis due to the actions of one of its partners and a collapse of confidence amongst its most important stakeholders (i.e., pre-order customers who have been financing this company throughout the development cycle).

If the business can't survive in the short-term, due to liquidity issues, the long-term issues related to licensing are moot.

If Inc. doesn't have enough assets (i.e., cash proceeds) to fully satisfy all liabilities of the estate (e.g., unreimbursed customer deposits, unpaid taxes, unpaid vendors), then Inc. is technically insolvent, and the alleged upstreaming of funds to related entities could be considered grounds for piercing the corporate veil. Of course, that could be cured if the funds were returned to Inc., assuming funds are still available.

Maybe Inc. is reporting on a cash basis?

Perhaps the December 2nd date on the two screenshots below is not purely a coincidence?

Tax Delinquency Notice 12-02-2014.jpg
331945.png

H-hey, this is a private residence, man!

Thanks, Nate. I've been waiting for those to post.

Have fun with the new AMH, you lucky bastard!

I listened to Nate's podcast with Roger, too, and I came away with the exact same impression. Attempted damage control with little substance.

Roger's involvement appears to be strictly as a consultant and focused only on licensing issues. He didn't seem to be aware of specific accusations that Phil had made, and he never once mentioned some of the more critical issues like liquidity, accounting practices, fiduciary obligations, corporate governance, and risk management. He also seemed very quick to dismiss some of the online criticism as jealously by individuals who wish they were building pinball machines and think they can do a better job than DP.

Hey, cool it Walter. Look, pal, there never was any money. The big Lebowski gave me an empty briefcase, so take it up with him, man.

Aurich, I agree with you. I never thought he was doing anything other than consulting on licensing issues, but several of the posts made on this thread after he was hired suggested a much deeper, more impactful role on the lines of a business partner or angel investor (i.e., a white knight riding in to save the damsel in distress). The podcast interview was solely focused on licensing issues, implicitly dispelling those other notions.

Definitely a missed opportunity for a relevant movie quote. It should have simply said:

~~~~ dutch (dp) pinball ~~~~
"Nothing is fucked here, Dude."

Just when I thought I was out.jpg

Well, they had to spend a LITTLE more money for the new T-shirt design (rev 2.0).

New T-Shirt Design Rev 2.0-281.jpg

Aurich, there are a couple of notable red flags in this very thread regarding the company's liquidity (e.g., upstreaming of funds to pay for affiliate expenses, some refunds issued while others are still on hold). The latter appears to be in direct conflict with the company's stated policy that customer deposits are fully refundable.

Frankly, the liquidity issue is quite possibly the biggest threat to Dutch Pinball right now, and they may need to address that issue through external financing, an equity infusion from the owners, or a new JV partner, if necessary, to maintain a going concern. Doing so would also provide much needed assurance for the company's stakeholders (i.e., existing depositors, vendors, employees, future customers).

If liquidity is NOT an issue, then they need to break their silence and communicate that message clearly to stakeholders and then reinforce that message with tangible proof (e.g., ALL requested deposits refunded to depositors, new credit line with ______, €________ additional equity infusion from owners, new JV partner named _______).

It's not that simple. Lots of business start-ups fail despite strong commitment from the owners/employees and a clearly defined market of buyers willing and able to purchase a product.

It takes cash to fund payroll, finalize mechanical designs, develop shippable code, purchase parts, manage inventory, ramp up production, man the assembly line, conduct QC testing, process invoices, manage & account for cash receipts, and ship final product.

Cash is the life blood of a business, not the desire of stakeholders. If a business runs out of cash, it dies. That is the essential liquidity test for operating a business as a going concern.

The amount of financing required for the development stage is typically MUCH lower than the amount of financing required for the production stage, so even if they had some outside financing during development, that doesn't necessarily mean that they have enough for production.

The fact that they haven't refunded all the deposits requested could be for a number of reasons (e.g., bad management, poor record keeping, insolvency). None of us know the real reason right now, but people smell smoke and they understandably think "fire".

I'm not arguing that DP has collapsed. I'm simply saying that their liquidity is in doubt, and that is a MUCH bigger issue than the licensing EVER was. DP's management needs to clearly address this concern and either completely dispel it with definitive proof, or acknowledge it and demonstrate what they are doing to correct it. Failing to address the issue with explicit words and actions could very well accelerate the recent "run on the bank".

Dude, Phil is battling stage 4 cancer. This is not a power trip for him. He wants OUT!

There are several possible reasons that he's not refunding the money (e.g., the account may already be depleted, he may not know who the remaining funds belong to because he doesn't have the customer records, he may be under a temporary restraining order preventing him from taking further actions). No one knows right now except the current partners, but the DP management team can clear a lot of these issues up by communicating with their stakeholders. Hopefully that will occur sooner rather than later.

Yeah, you're missing the part where they clearly addressed the company's liquidity issue before asking for more deposits.

The PRIMARY thing making DP seem like an unstable and risky company is the lack of liquidity implied by requested deposits not being refunded.

Good to see that you and Phil are now in sync.

Correction:

Old-fashioned glass
Ice
K̶a̶h̶l̶u̶a̶ Coffee-flavored rum-based liqueur from Mexico*
Vodka
Cream

* Specific contents not yet approved.

The accounting issues should be relatively straightforward, and the CPA that they hired is a tax specialist, which may have been intentional, if some of the issues were tax-related liabilities. Figuring out where all the money went, or how it should be accrued and booked, is not that complicated.

The fact that the Company is still not issuing refunds almost a month later suggests that it's not simply an accounting issue. Liquidity is a finance issue. The business needs cash to: (a) survive (operating cash flows), and (b) refund customer deposits (financing cash flows). If there is not enough cash available to service both demands, they need to get more cash through an equity or debt infusion. This takes time, especially if the principals don't have deep pockets, because then you have to talk to external parties (e.g., banks, investors) who need to conduct their own due diligence and then hire lawyers to document the funding agreements. Due diligence and documentation are time-consuming processes, even for a company as small as DP.

Is that the name of Robin's new Pre-Order forum?

Meanwhile, on the liquidity front... *crickets*.

Dude, you're all over the place. One minute you're going on about talking to Universal and blowing up the licensing deal. The next minute, you're talking to Barry, saying "new shit has come to light" and doubling down with the next payment. Now you're talking about liquidity again (even though that situation has never changed). I wouldn't worry about other people reading too much into your posts, because it seems pretty clear that you haven't even made up your own mind.

May I suggest that you sit down, relax, and mix yourself a White Russian? The Kahlua is sitting on top of the bar. It's the one with the electrical tape over the brand name.

Some of you guys have VERY selective memories...

That's very short sighted. It assumes that capital is fixed and financing is a zero-sum game. "If refunds are processed, the company goes bankrupt. If no refunds are processed, then the games can be made." It all assumes that the amount of cash in the pot is fixed.

The company needs more capital. When they get more capital, they can issue refunds, build the games, make a profit on the venture, and then repay the investors and/or lenders who provided the capital.

Actually, customers who have paid deposits but have not yet received delivery are classified as priority unsecured creditors. For an insolvent corporation -- one which cannot pay its financial obligations as they become due -- there is no value in equity, so the creditors have first claim on the company's assets. The fiduciary duties of directors and officers of an insolvent corporation expand to include creditors as well as equity shareholders.

They have every standing to demand information from an insolvent company, and a trustee will fight for their rights every single day over the rights of your so-called "investors" (i.e., equity), who are at the absolute bottom of the totem pole. The right to information doesn't have a damn thing to do with the likelihood of recovery.

I realize that this is not your area of expertise, but please stop claiming that DP's customers have "no standing to demand information" because they are "not investors". This argument of yours, which you've regurgitated from the MMr thread, doesn't work in the Dutch Pinball situation. The companies making MMr (PPS and CGC) are *not* insolvent, and the right to information in this particular situation doesn't have anything to do with your low-likelihood-of-recovery argument.

Dutch Pinball USA, Inc. is arguably insolvent, because it cannot pay its financial obligations when they become due. The angry complaints in this very thread from customers demanding that their deposits be refunded is clear evidence of that, and the only thing keeping Dutch Pinball USA, Inc. out of bankruptcy at the moment is a simple, 2-page form filed in federal bankruptcy court (Chapter 7 Involuntary Bankruptcy petition) and a $335 filing fee.

Petition: http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_1207/B_005_1207f.pdf
Fees: http://www.ilnb.uscourts.gov/sites/default/files/fee_schedule.pdf

Venue could be established in either Illinois (principal office) or Wyoming (state of incorporation).

https://wyobiz.wy.gov/Business/FilingDetails.aspx?eFNum=141190084199124060157201028180106126092020171249

The principal officers listed in the Wyoming public filing are Barry Driessen (President) and Jacob Pieter Nauta (Vice President), with a publicly-listed US address of 350 S Northwest Hwy, STE 300, Park Ridge, IL 60068.

In the event of a bankruptcy filing, Dutch Pinball USA, Inc. would CLEARLY be subject to US bankruptcy court jurisdiction and to the EXACT same reporting requirements of any other company in US bankruptcy court.

Shortly after the petition is filed, the Company's officers would be required under federal law to file a comprehensive Statement of Financial Affairs ("SOFA") and a detailed Schedule of Assets and Liabilities ("Schedules").

SOFA: http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Official_2010/B_007_0410.pdf
Schedules: http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_1207/B_006_Summary_1207f.pdf

Those standard bankruptcy filings would provide the court with detailed information about the company's finances and give the bankruptcy trustee information about recent financial transactions, such as payments to insiders and related parties, payments to trade creditors, transfers of property, and gifts to others. In some circumstances, the trustee would be entitled to take back property or cash transferred to others prior to the bankruptcy filing and distribute the proceeds for the benefit of the unsecured creditors.

Those initial filings must be signed by a corporate officer under penalty of perjury. The penalty for making a false statement is a fine of up to $500,000 or imprisonment for up to 5 years, or both. 18 U.S.C. §§ 152 and 3571.

Bottom line: The possibility of bankruptcy in a situation like this is a serious matter, and people shouldn't be flippant about it. It's very easy to get into bankruptcy (i.e., $335 filing fee and a 2-page form), but it's very difficult to get out. If Dutch Pinball's directors and officers want to continue operating without the oversight and restrictions of a US bankruptcy judge, they would be well advised to do *whatever* they can to raise enough capital to refund deposits and eliminate even the appearance of insolvency.

Neither of us are missing that point.

Claiming that people with pre-orders have no right to financial disclosure actually INCREASES the risk of an involuntary bankruptcy petition, because when creditors are denied financial transparency in situations like this, they subsequently get all of the detailed information that I outlined earlier when they file an involuntary petition. An involuntary petition is initiated by creditors without the consent or support of the company involved. That's why it's called "involuntary".

Denying requests for financial transparency is a dangerous game of chicken to play with creditors, and it can have very serious consequences for the directors and officers if the decision-makers miscalculate.

Really, counselor? I'm going to give you the benefit of the doubt and assume that this was a simple typo on your part, because you're much too smart to think that a corporate debtor can file in Chapter 13.

Let's just say that some Nihilists walked up behind you while you were typing your response, and they caused you to drop your beverage and hit the '3' key instead of the '1'. Perfectly understandable. Happens to the best of us. "Nothing is fucked here, Dude!"

Being serious for a moment, I totally agree with you here. To your credit, you first mentioned the idea of a trustee watching over the funds a month ago, and I gave you a thumbs up for that suggestion at the time. I definitely agree that an escrow account managed by a trustee is the best way to go here. Hopefully, DP management will give serious consideration to that suggestion, especially since it is being repeated a month later.

Good news! Dutch Pinball will be at the Dutch Pinball Open EXPO 2015 in November, and production of The Big Lebowski is scheduled to start soon!

https://pinside.com/pinball/forum/topic/dpo-expo-2015-announced

Well, hopefully Barry is actually trying to raise some capital in the interim.

But if not, perhaps he should at least listen to his new advisor regarding his communications strategy?

Mr. Marchetti has some experience in handling customer complaints, and he has even published some tips about this issue in the public domain.

Marchetti & Company, P.C.
Certified Public Accountants
http://marchetticpa.com/

Business Tip from December 2014 - "How to Handle Customer Complaints"
http://www.planningtips.com/6802/prior1412.asp?Co_ID=55556&Tip_ID=6802

I would hate to see Barry simply trod down the same communications path pioneered by JPop et al, leaving his company exposed to the unpredictable moves of angry creditors who have recourse available, even if those options don't appear logical to Barry. That's a dangerous game of chicken to play with unpredictable opponents, and it could have serious negative consequences for the company if he loses.

Plungemaster, I realize that you have a vested interest here, and it is no doubt affecting your comments, but I have seen you make very thoughtful and constructive comments in one of the Spooky Pinball threads. Can you please ask THAT guy to participate in this thread, too?

You can have a vested interest without a financial stake in the matter, my good Dutchman.

http://en.wikipedia.org/wiki/Vested_interest_%28communication_theory%29

The Law of Information Flow: Information, like electricity, WILL flow, and it will ALWAYS take the path of least resistance.

If you don't communicate with stakeholders, the grapevine will thrive. If you communicate with stakeholders, you can keep the grapevine in check.

Exhibit A: https://pinside.com/pinball/forum/topic/dp-dutch-pinball-the-big-lebowski-site-visit

Hey, it's Jeff and Don from the Pinball Podcast.

http://www.thepinballpodcast.com/

Welcome aboard, guys!

"Will I get my money back if I want to cancel my order?

Yes, you will receive a full refund if you cancel your order. Please note that since we are shipping on a first-come, first-serve basis, if you do cancel your order, you will lose your place in the production line."

http://www.thebiglebowskipinball.com/faq

One of my friends is a former IFPA champion in Japan, and we discuss the local pinball scene occasionally. Pinball is definitely undergoing a renaissance in Japan. Check out the Silver Ball Planet in Osaka.

http://www.pinballnews.com/sites/silverballplanet/index.html
https://www.facebook.com/silverballplanet

Hopefully, Dutch Pinball doesn't take public relations cues from Rick at PPS, because Rick is his own worst enemy when it comes to PR. Only Rick could snatch defeat from the jaws of a PR victory like fresh MMRs rolling off the production line at Stern!

Rick freely uses Pinside when he wants to hawk new wares or selectively release good news, but he retreats to his controlled, private forum (the "bunker") when he has bad news, wants to limit it's reach, or wants to scrub and delete follow-up comments. I suspect in his own mind, it makes sense, but the reality is, the very existence of a controlled, private forum for public relations is a problem, and that's why it receives little traffic, despite Rick's continual efforts to drive people there, yet the Pinside grapevine, which Rick cannot control, thrives.

-----
The Law of Information Flow: "Information, like electricity, WILL flow, and it will ALWAYS take the path of least resistance."
-----

Question: Does Spooky Pinball have a controlled, private forum?
Answer: No, because they don't NEED one.

Rick's PR problems are easily fixable:

1] Engage with the community.
2] Treat people with respect (actual customers, potential customers, lurkers, and critics).
3] Be open and honest.
4] Under-promise and over-deliver.
5] Apologize when you make a mistake or let people down.
6] Listen to feedback.
7] Try to improve.
8] Make customers happy.
9] Lather, rinse, repeat.

Personally, I'd like to think that Dutch Pinball will be a little more proactive than PPS in the future, and follow the simple guidelines above to build a positive, healthy communication style going forward.

Instead of asking "What would Rick at PPS do?", they should instead be asking "What would Charlie at Spooky Pinball do?"

I truly believe that would bode well for the long-term health of Dutch Pinball.

Hopefully your refund request has been processed, too.

Yes, I disagree, because I think you "achievers" or "strong hands" are being short-sighted by trying to divide the buyers into different groups.

This company still needs financing, and now that management have lost working capital through requested (or unrequested) refunds, they may desperately need those funds to come back into the fold to fund production so the games can get made for EVERYONE. If management is smart, they will throw out the welcome mat to entice those "non-achievers" or "weak hands" to return back home.

Bottom line: You "achievers" don't want to give those former buyers easy reasons to stay away.

JMHO, but speaking from experience. And no, I'm not "in". I'm just spectating, but I don't need to be "in" to voice an opinion.

FWIW, I would love to own TBL someday -- it's on my wish list -- but if/when I do, it will be purchased HUO second-hand. Based on what I've seen so far, I would never pre-order from this company, but I would also never criticize those who choose otherwise.

Now yer talkin! I've been to that distillery. Lived in Aberdeen for two years, and spent many a weekend visiting distilleries throughout the Highlands. Good times!

I'm sure all will be revealed in the upcoming New Shit Newsletter, hopefully to be released sometime this weekend.

Hopefully you can find it amidst all of the Soup Nazi pics Ozno keeps posting every 15 minutes.

Dude, lay off the Nazi shit, OK? No matter how mad you may be at Barry, *NO ONE*... and especially a Dutchman... deserves having a swastika thrown in their face. It is highly offensive, so please just stop.

Yeah, whatever.

You and I both know that I was referring to your comment, since edited, that said "Barry's weekend ride:" followed by the photo of a WWII airship with a swastika on the side. Not cool.

Nevertheless, thank you for editing the post and removing the photo.

Contract manufacturing definitely changes things, but it also means they have to have all parts in hand for at least an initial batch of games before production will begin. Then they would preferably re-supply the next batch of parts before the first batch is complete. A contract manufacturer won't want to start building machines and then have the entire production line go idle or have work-in-process moved off the production line and into storage while awaiting re-supply, because overhead costs are burning every day, whether the production line is active or idle, and somebody has to absorb that cost, either the manufacturer or the buyer. (Stern didn't start production of MMR for PPS/CGC on schedule for this very reason.) This places a premium on timely parts delivery, which requires designs to be complete, purchase orders to be placed, initial payments to be made (if required), and vendors to be cooperative. Suffice it to say that a lot of detailed advance work is required when you use contract manufacturing that isn't necessarily required if you build the machines in your own facility.

I've never understood why some people try to close down discussion threads on Internet forums?

When this thread is closed, another one will spring to life. The same stuff that's being talked about here will be talked about in the new thread, and people will still link back to this thread when they want to dig stuff up and rehash it.

I don't think so. If you look at some of his recent posts, it seems pretty clear that he doesn't like this particular thread and he wants it closed.

Cool! Eggbert promoted Hwawonyu to moderator. Congrats, dude!