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Loki Aftermath Looks Bad

CmdrTaco posted more than 12 years ago | from the something-slimey-going-on dept.

Linux Business 661

einer writes "Things look mighty bad for Loki employees. From this article it appears that some of them haven't seen a paycheck since late 2000. Perhaps the most telling part of the article is contained in a parenthetical near the bottom of the page: "A single employee is listed in creditor filings as being owed almost $350,000 in unpaid salary and in expenses the company incurred using the employee's credit card."" there's a lot of not-so-happy-stuff in this article.

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FASP! (-1)

Ralph JewHater Nader (450769) | more than 12 years ago | (#3143275)

First anti-semitic post! Propz to John Nash!

who is john nash? (0)

Anonymous Coward | more than 12 years ago | (#3143409)

is he supposed to be important?

Greetings.... (-1, Offtopic)

Anonymous Coward | more than 12 years ago | (#3143277)

Kneel before me. You know that you want to.

Dual AMD is a bitch to set up! (-1)

October_30th (531777) | more than 12 years ago | (#3143372)

Goddamn a dual AMD (Tyan Tiger) is a bitch to set up!

Try installing a 64-bit Adaptec SCSI card and you end up trying dozens of different PCI card combinations until it works.

Next time I'll settle with a nice, Intel mobo with nice Intel controller and CPUs...

Ok maybe this sounds strange but... (1)

bliss (21836) | more than 12 years ago | (#3143382)

1. Why is this person(s) still working without a paycheck?

2. How does this person survive? Programming is a demanding job and dosn't work well with 2 jobs+.

FP (-1, Offtopic)

SurgeonGeneral (212572) | more than 12 years ago | (#3143280)

Yes its the FP

but seriously, with a name like Loki u have to expect a few mishaps and tricks. Its creating you're own desitiny!

How Could It Gte This Bad? Enron? (-1, Redundant)

bluemiracle (113916) | more than 12 years ago | (#3143284)

One must wonder how something could go on this long without someone noticing. Is it another Enron scam?

Always get it in writing... (3, Funny)

Buran (150348) | more than 12 years ago | (#3143285)

Could this employee not file a dispute with his or her credit card issuer? Or is there a 'statute of limitations' of sorts in typical card-issuer fine print?

60 days (4, Informative)

wiredog (43288) | more than 12 years ago | (#3143306)

I think. Or maybe 30. Still. The company used his credit card? I think he might want to consider criminal theft charges against the principles. Or would it have been considered a loan?

Re:60 days (2, Informative)

TClevenger (252206) | more than 12 years ago | (#3143325)

Actually, Visa allows up to 12 months, but most issuers put 60 days in the contract to reduce their workload. But if it's enough money (and not reimbursed by a company like this) the employees may be able to file a claim directly through Visa.

Re:60 days (4, Insightful)

al_d (472085) | more than 12 years ago | (#3143326)

"The company used _his_ credit card?"

Not really that unusual for an employee to spend their own money and then claim it back 'on expenses' (e.g. business trips).

Sucks to have the compeny not pay you back though

Re:60 days (2, Interesting)

Jburkholder (28127) | more than 12 years ago | (#3143433)

Our company issues "Corporate" Amex cards to use for business expenses. Guess who American Express calls if the bill isn't paid?

The only thing these cards are good for is the company can issue electronic payments straight to Amex instead of reimburing the employee who then writes a check. This usually works out okay but last year the AP dept was majorly screwed up and 'lost' several of my expense reimbursement forms.

Amex was sending me collection notices and was telling me *I* was responsible for keeping the account paid on time. My credit report took a hit because of these late payments until I went and got them removed.

I had always thought a company card belonged to the *company* and that they would bear liability for payment (of course, unless the employee used it for personal charges). Apparently it doesn't work that way (at least at my company, anyone else have it work different?)

"Corporate Card" (5, Informative)

kawika (87069) | more than 12 years ago | (#3143365)

Wow, I never thought about this scenario, I've been lucky enough to never be there. A lot of companies issue corporate American Express cards to their employees so they can charge company expenses such as airline tickets, small equipment and software, etc. The employee is supposed to then file an expense report and be reimbursed for those expenses. Regardless, the employee is responsible for paying the card balance.

In this case it sounds like the employee was royally screwed by this arrangement. It's also possible that they never got around to filing an expense report. A few years ago I worked with one guy who hadn't filed expense report for eight months and was owed a few thousand dollars; the company sent him a letter saying he had to file by the end of the year or they wouldn't reimburse him.

Re:60 days (2)

MaxVlast (103795) | more than 12 years ago | (#3143408)

You can only file disputes if the charges are not legitimate. If I lose my card and it is used, that can be disputed. If I legitimately use my card for things and can't pay it back (for whatever reason), you're SOL. Otherwise, think about the consequences for the credit card companies!

Re:60 days (2)

realdpk (116490) | more than 12 years ago | (#3143475)

You'd be surprised. The CC companies tend to side with the consumer in this sort of situation. The CC companies don't lose out, anyways - it's the merchants that take it in the ass.

Re:Always get it in writing... (1)

bliss (21836) | more than 12 years ago | (#3143485)

Is it common to allow companies to use your credit card?

This has been said.. (1, Funny)

windex (92715) | more than 12 years ago | (#3143287)

The stink about the credit card was mentioned before on slashdot. It was used to fund payroll, I'd link to the slashdot article but I think it was in comments to another Loki article.

Another happy ending... (-1)

cyborg_monkey (150790) | more than 12 years ago | (#3143293)

to another Linux related company! Good job, Loki, you had it coming.

sucks (0, Redundant)

slardy (29383) | more than 12 years ago | (#3143295)

They proboly won't ever see that money either.

Witness the Aftermath (-1, Offtopic)

Anonymous Coward | more than 12 years ago | (#3143296)

of my first post...

at what point (3, Interesting)

theCURE (551589) | more than 12 years ago | (#3143302)

do you STOP working there and demand some money? In my opinion, about 1 month of not being paid would be the end. Anyone who works longer than that without pay is a sucker, and i have no remorse if they get taken to the cleaners.

Re:at what point (0)

Anonymous Coward | more than 12 years ago | (#3143384)

Two Weeks and I better have promises of the missing funds showing up on that next check!

Re:at what point (2)

MaxVlast (103795) | more than 12 years ago | (#3143429)

When you're in the thick of it, and you feel like you're part of the company, it's easy to put things off (as long as you're able to continue to support yourself.) Often, the 'cause' is seen as worth the empty refrigerator. (Been there, done that.)

Re:at what point (1)

GSloop (165220) | more than 12 years ago | (#3143394)

Sheesh, they may be suckers...

but...I DO feel bad that they got taken to the cleaners.

Are you really that heartless?

[Sheesh]

Cheers!

Re:at what point (2, Insightful)

bsletten (20271) | more than 12 years ago | (#3143486)

You're missing out on the fact that these guys probably really believed in their mission of getting these games to the Linux desktop. They probably also legitimately believed it was a hard thing to do and so were willing to make some sacrifices toward that larger goal.

That goal may not have sustained you (or many folks) through a period of inactivity. Sure, you have to pay the rent and know when to draw the line, but it hardly seems kind/fair/legitimate to lambast someone for having vision and principles beyond making a buck.

Re:at what point (2)

crow (16139) | more than 12 years ago | (#3143489)

It also depends on the job market. If everyone else is laying people off, and I believe in what the company is doing, then why not show up and do what you enjoy instead of sitting around at home bored?

Depends... (3, Interesting)

sterno (16320) | more than 12 years ago | (#3143494)

Really it depends on how much you enjoy the job and how much you can afford to be without pay. If I really enjoyed my job, and could afford to do so, I could be convinced to stay a month or two if I thought the company was about to turn around.

Of course during that month or two some portion of my time at the office would probably be spent actively seeking another job. Somehow I don't think your boss can get to irritated if you take the afternoon off for an interview if you haven't been paid in a month :). If you enjoy the job enough, it's better than sitting at home.

Re:at what point (2, Insightful)

reflective recursion (462464) | more than 12 years ago | (#3143498)

Frankly, it's the Open Source/Free Software mentality that did that. OSS coders already work for free (don't deny that Red Hat and many others make money on other people's work).

This is just more fallout that most of the dot-com companies already experienced. The world does not revolve around wishful thinking.

I will probably get moderated as flamebait because many /.'ers are still stuck in that euphoric state-of-mind. Many can still not accept that it's possible for people, who provide what /.'ers consider a good service, to fail.

But this is the norm at many startups (4, Insightful)

Ars-Fartsica (166957) | more than 12 years ago | (#3143504)

Most startups at some point demand some extraordinary sacrifices of their employees, either in low pay or no pay for some periods.

This is why you don't work for one if you have a mortgage to pay and three kids in college. Look at most start-ups and you see two types - the very young and the very rich.

Credit Card. (0, Funny)

Anonymous Coward | more than 12 years ago | (#3143305)

Visa - Everywhere you dont want to be.

How trusting can you be? (2, Funny)

TClevenger (252206) | more than 12 years ago | (#3143308)

Employees counting on Loki paychecks would experience a long dry spell; as of the end of May 2001, regular payroll payments had not resumed.

So these employees stopped receiving paychecks in December 2000, and some continued to work through May 2001? Talk about falling for the company vision!

Re:How trusting can you be? (1)

rwa2 (4391) | more than 12 years ago | (#3143373)

I dunno, would you leave a company where you get to sit around and "test" computer games all day?

Maybe they had other odd jobs (no pun intended).

Re:How trusting can you be? (1)

Jburkholder (28127) | more than 12 years ago | (#3143461)

I don't know. Perhaps they kept working because they thought the only way they might ever get paid is if Loki stayed afloat and eventually made money?

But I agree, I can't see staying at a place without a paycheck for 2 or 3 pay periods unless there is a clear light at the end of the tunnel (and it's not an oncoming train ;-) )

I wish I had that kind of credit! (4, Funny)

soulcuttr (555929) | more than 12 years ago | (#3143313)

You've got to wonder how a person can keep working so long without a cashflow.

This same sort of thing happened at a company I used to work at where all of their projects were overdue, and they hadn't been financially prepared to be able to pay the programmers to finish. So the result was that each successive paycheck that was 'missed', fewer and fewer people came into work. Less and less got done -- they never did finish the products as far as I know. It was sorta sad in a way, and I hate for good companies (and good people) to be dragged down by money problems.

-Sou|cuttr

350k in expenses (1)

warpSpeed (67927) | more than 12 years ago | (#3143315)


Geez, it sounds like this guy should have stopped drinking the kool-aid and started to look for a new job...

WTF? (5, Interesting)

great throwdini (118430) | more than 12 years ago | (#3143320)

Things look mighty bad for Loki employees. From this article it appears that some of them haven't seen a paycheck since late 2000.

What the hell were they living on over those many, many months? Credit? Or were most of the Loki programmers borrowed from the ranks of homeless shelters?

I just don't get this. I see that a number were given advances in lieu of regular payroll, but when the stated figures of missing pay and expense claims starts at $20k and tops out at $350k, you just have to wonder how compelling employment with Loki was to those on the inside.

Re:WTF? (1)

neonstz (79215) | more than 12 years ago | (#3143457)

Or were most of the Loki programmers borrowed from the ranks of homeless shelters?

Only their web designers... :)

Whoa, doesn't the US protect its citizens ? (4, Interesting)

jpbelang (79439) | more than 12 years ago | (#3143321)

Where I come from (Quebec), corporations can't claim bankrupcy protection for salaries: you can sue (personally) the board of directors of a company if you aren't paid your salary.

Don't these people have recourse ?

Re:Whoa, doesn't the US protect its citizens ? (5, Insightful)

turbine216 (458014) | more than 12 years ago | (#3143359)

only problem is that Loki's board of directors is as broke as its employees. A lawsuit would have very little effect, if any.

This never should have happened at all. Loki and its employees were obviously working under some promise of eventual financial gain, or they would not have been there. Which means that someone at the top was either "blinded by the open source light" or was lying through his teeth. It's shit like this that makes working for Microsoft seem like a good alternative.

Re:Whoa, doesn't the US protect its citizens ? (3, Interesting)

MrFredBloggs (529276) | more than 12 years ago | (#3143396)

"working for Microsoft seem like a good alternative"

I`ve heard nothing to suggest that working for Microsoft is anything other than good. Have there been some horror stories i`ve missed out on (whiny stock-racism complaints on behalf of temporary workers doesnt count)?

Re:Whoa, doesn't the US protect its citizens ? (0)

Anonymous Coward | more than 12 years ago | (#3143424)

>I`ve heard nothing to suggest that working for Microsoft is anything other than good

Google for "permatemp lawsuit microsoft". That should explain it for ya better than I can.

And that's just half of it... also seach for "noncompete agreement microsoft".

Re:Whoa, doesn't the US protect its citizens ? (4, Funny)

turbine216 (458014) | more than 12 years ago | (#3143481)

I think you missed the point. I'm not saying that working for Microsoft would be bad at all - except for the fact that your morals have to be slightly skewed to be comfortable with such employment.

And if you want a horror story, I got one word for ya: Ballmer.

Re:Whoa, doesn't the US protect its citizens ? (4, Insightful)

dirty (13560) | more than 12 years ago | (#3143383)

This is funny???

You make a really good point though. I can't figure out how it's legal in the US that management can walk away from a dead company with millions of dollars in their pockets, while the employees walk away thousands in the hole. Maybe the US should look to Canada and follow its lead (in just one of many places).

From what I understand the employees almost always get screwed in these situations because the way the creditors are paid off is the ones who are owed the most get their money first and then it works its way down. IMHO it should be exactly the other way around, FedEX can afford to lose $100,000, Joe Programmer probably can't afford to lose $20,000.

Re:Whoa, doesn't the US protect its citizens ? (3, Interesting)

eXtro (258933) | more than 12 years ago | (#3143445)

This should be a criminal action. If I steal from my employer they can file charges against me. If I steal enough, say a nice color copier or something, I could actually be charged with grand theft. The converse should also be true, if a company knowingly defrauds or financially harms its employees then the company should be criminally liable. It won't reset things for the employees, but at least nobody would have to be concerned with the particular executives mismanaging a company for 20-30 years.

Re:Whoa, doesn't the US protect its citizens ? (1)

Oswald (235719) | more than 12 years ago | (#3143385)

Um, no.

Does knowing that make you wonder what they were thinking when they kept working without a paycheck?

Re:Whoa, doesn't the US protect its citizens ? (3, Insightful)

javatips (66293) | more than 12 years ago | (#3143421)

I aslo came from Quebec. I was working for Sanga just before they stop paying their employee. I've not stayed long being upaid. However they still owe me 6K CAN.

At first we went to the "Office des Normes du Travail" and filled a complain, along the other Montreal employee. They was some legal proceeding going on. Up to the point were the Sanga employee in Ontario decided to file a class action suit. The "Office des normes du travail" decided to give control to the lawfirm that was suing for the ON employee.

I received many legal document telling me that thing were going well. Up to the point were the company filled for bankrupcy. At that point, the lawfirm (can't remember which one) decided it was not worth the trouble and drop the charges.

So did the Quebec laws protected me... Not at all, it just gave me the illusion of being protected for some time. Sure I can decide to sue, but it will cost me a lot more that what they owe me.

The point is that the law may be protecting you, but if the system fail to help you being protected, there is not point in having these laws.

sucks to be loki (0)

Anonymous Coward | more than 12 years ago | (#3143324)

Dang, and i thought dot bombs were bad. At least they died in early 2001, and not now.

I've said it before, and I'll say it again (4, Interesting)

DNS-and-BIND (461968) | more than 12 years ago | (#3143328)

I work for one reason, money. The second I don't get a paycheck, I'm out the door. I'm especially not giving a company that can't pay me, more of my money!

Don't think that this is a mercurial or bad way to think. What would your employer have to say if you reneged on your half of the employment agreement, and then you had the nerve to demand six months of living expenses?

Re:I've said it before, and I'll say it again (2, Interesting)

FalconRed (91401) | more than 12 years ago | (#3143360)

Yeah, I'm having a hard time feeling bad for these Loki employees. In fact, I think they're pretty stupid.

It's one thing for your company to bounce a paycheck or two here or there and pay up the next week or month. If you're committed to the company, you stay. But to not have been payed for a year? How many weeks in a row does it take for you to realize you're never going to be paid? At some point the blame for this situation falls on the employees, who didn't have the guts to stand up and tell Loki to shove it.

Re:I've said it before, and I'll say it again (5, Funny)

szcx (81006) | more than 12 years ago | (#3143416)

It's not about the money, man. They were working for the power and the glory of Linux. If Microsoft didn't control the low-rent housing industry, they could have paid their rent with peer respect and bought their groceries with good will.

Re:I've said it before, and I'll say it again (2)

Proaxiom (544639) | more than 12 years ago | (#3143422)

"The second I don't get a paycheck, I'm out the door."

Yes, when your pay falls into arrears you have every right to walk out until they catch up.

However, in some circumstances it may make sense to stay. If you really believe that the company will catch up in the near future, then it can be reasonable to keep working for them to help them get into the black.

It would be interesting for someone to do a study on how many companies fall into that kind of trouble and later recover to become successful. Can you figure out at what point the risk surpasses the expected reward, in a struggling company? (Assuming to begin with that the company's business plan is viable)

But any way you slice it, six months is ridiculous. As many have been asking here, how did these people live?

"I work for one reason, money."

I work for money, too. But I certainly don't work for "one reason." Job satisfaction and a desire to improve myself rank up there as well.

A shame (5, Insightful)

Violet Null (452694) | more than 12 years ago | (#3143332)

During that period, however, the Draekers took almost $92,000 out of the company, according to court filings; in counter filings, Loki claimed that the funds went chiefly to pay employees, though it did note that Scott Draeker was paid $46,504 in salary during the period from January 15 to July 31, 2001, with Kayt Draeker receiving $18,643.52 during that time; the company paid medial insurance premiums for both during that period.

And it's this sort of thing, boys and girls, that causes me to never trust management. The real shame is that you've got employees who are going without their pay, ostensibly because of loyalty to the company, and then getting shafted in the end.

Moral of the story: When the company asks if they can stop paying you, don't agree to let them use your credit card.

Re:A shame (2)

JimPooley (150814) | more than 12 years ago | (#3143363)

I thought the moral of the story was that when the company asks if they can stop paying you, you tell them to fuck off!

I really can't believe anyone put up with that shitty treatment from the Draekers, who look from this article like a pair of crooks!

Well... (3, Insightful)

DrEldarion (114072) | more than 12 years ago | (#3143334)

You can pretty much say goodbye to most (if not all) Linux ports in the future. Game companies will look at this and think, "If it didn't work for them, why would it work for us?", and not even bother putting a port out.

Keep that Windows partition.

-- Dr. Eldarion --

Re:Well... (1)

rhizome (115711) | more than 12 years ago | (#3143352)

So your point should hold, all other facets being equal, right? Are you then saying, if in fact game-porting can only be done one way, that all of the other companies who might consider making game-ports would also have criminals running those companies?

Re:Well... (0)

Anonymous Coward | more than 12 years ago | (#3143388)

As much as I want to figure out what this post means, it makes absolutely no sense.

Go earn yourself some english.

Re:Well... (2)

Kefaa (76147) | more than 12 years ago | (#3143375)

It did not work for them because they were focused in the game migration not creation business. In order for their business model to work, far many more Linux desktops are necessary.

This would have been a Catch-22. If more desktop purchasers are available, the original maker will create the Linux port and again their model is in trouble.

While these are good people, good people are not enough to overcome small revenue.

Re:Well... (2)

yakfacts (201409) | more than 12 years ago | (#3143381)

You can pretty much say goodbye to most (if not all) Linux ports in the future. Game companies will look at this and think, "If it didn't work for them, why would it work for us?"So you are saying that game companies will not
release a Linux version or allow a game to be
ported for fear some sleezeball lawyer (repeating myself) will suddenly start a company, steal what he can, then close up shop? Sorry, I can't follow the
argument.


That's like saying nobody will ever walk into any building because some terrorist might fly an airplane into it.

Re:Well... (2)

Gaijin42 (317411) | more than 12 years ago | (#3143428)

If there were only 3 buildings in the whole world, and 2 of them had terrorists fly into them, then yes, nobody would build buildings anymore.

There are a handfull of linux companies. None of them are doing particularly well. Redhat would be the one exception. Sun, IBM etc don't count, because linux is not their revenue stream - hardware is.

Write a game that makes people NEED linux (2)

xtal (49134) | more than 12 years ago | (#3143465)

Sorry, but I don't feel the sympathy for the no-more-ports-for-us crowd. People weren't buying them, there's loads of evidence to support that, and I don't know about you, but NOBODY that I know plays games on Linux. I'm sure some of you play games in linux.. but in every lan party I've been too, it's the domain of microsoft and directX. Even our fearless leaders *chuckle* make a mess in their shorts trying to get Diablo II installed as fast as they can.. in windows.

If someone wants to prove linux gaming is viable, write the next-biggest-thing in gaming and make it only available on linux. Make people NEED linux the way I NEED that URL at microsoft for the latest directX update to work, or the way you NEED a PSX2 for GT3, Metal Gear, or GTA3. No, TuxRacer is a sad joke. A native killer project is about the only thing that's going to make this happen - or out of the box DirectX emulation.

Linux isn't the best tool for gaming. When all you have is a hammer...

Re:Well... (2)

StarTux (230379) | more than 12 years ago | (#3143482)

Not necessarily if one buys the games that are slated for Linux:

NeverWinternights and X-Plane are two that pop into my head.

Makes me wonder if Loki's demise may possibily have been management related rather than completely market related. Although it might all boil down to missing the real size of demand from the Linux use base.

Well (1)

motox (312416) | more than 12 years ago | (#3143335)

If they had employees pad 125000$ per year i bet they failed...

Re:Well (1, Funny)

Anonymous Coward | more than 12 years ago | (#3143386)

Only the president had that salary. The programmers were in the 40-50k range. In Orange County. Which is not much above poverty, just for the record.

Re:Well (2)

swb (14022) | more than 12 years ago | (#3143440)

The programmers were in the 40-50k range. In Orange County. Which is not much above poverty, just for the record.

That is below poverty in Orange County. Can't imagine where you'd live for that kind of money in OC -- probably waaaayyy inland or some nasty place in Santa Ana. No groovy oceansides in Newport or cozy bungalows in Corona.

Re:Well (0, Redundant)

motox (312416) | more than 12 years ago | (#3143495)

"single employee is listed in creditor filings as being owed almost $350,000 in unpaid salary and in expenses the company incurred using the employee's credit card."

Wow (4, Insightful)

loraksus (171574) | more than 12 years ago | (#3143338)

Jesus fucking christ. As cool as the project is, don't these people have any common sense? You don't get paid for a year, you jump ship. I'd be gone after 2 bounced [or not received] paychecks. The market is shitty, but I'm sure that someone could hire them. Of course management got paid, this was a friggin sweatshop.

Re:Wow (1)

Kefaa (76147) | more than 12 years ago | (#3143452)

Not being on the inside of Loki, I can only guess, but lets give them the benefit of the doubt that they believed "this" was the month that would pull them out of it.

Not being able to live without two paychecks merely identifies the level of risk you are willing to accept. I have worked for clients with 90+ day payment cycles, so my level of risk is higher. The Loki people apparently were far less risk adverse than either of us. Maybe they wanted it to work and saw a big pay day if they could just pull it off in the end.

Or if you want to be cynical, consider people buy lottery tickets too. Which leads to my favorite bumper sticker: Lotteries are a tax on people bad at math. But people well educated, well rounded and grounded people do it anyway.

Perhaps a Loki lurker would care to comment.

Poor Loki... (1)

xZAQx (472674) | more than 12 years ago | (#3143340)

They just can't catch a break. What happened is very unfortunate...but at least those employees got to work on one HELL of a project.

What?! (0)

Anonymous Coward | more than 12 years ago | (#3143342)

If you work for a company who has not paid you in 6 months, what the hell are you doing letting them run up the balance on your personal credit cards? I hate to see these folks put in this position by their employer, but you have to use your fucking brain, too!

If you believe in something so much as to allow your employer to go 350,000 dollars in debt to *you*...maybe you should seriously consider opening your own company!

There are no more heroes (5, Insightful)

Toodles (60042) | more than 12 years ago | (#3143345)

I had always wanted to consider Loki one of the "good guy underdogs". A company to root for. I mean, c'mon. They helped bring Quake3 to Linux, how could you NOT like them? But then I read this:

Instead of sending them W-2 income tax forms, they were sent 1099s, meaning that they are left to pay taxes on income for which the company was already supposed to have -- but hadn't -- paid federal withholding.

The question here is, did Loki without the taxes/FICA, etc. out of the paychecks? If they withheld, didn't deposit it, and then sent out a 1099, then the company should immediately be investigated for tax evasion and any other criminal charges that are relavent. This is fraud, and the victims are the employees. If the taxes were NOT withheld, then this is a non-issue. Yes, it sucks having a large tax amount due all at one, but thats life.

Who wants to take bets that this gets publicized as FUD that Linux does not a viable company make?

Re:There are no more heroes (1)

llamalicious (448215) | more than 12 years ago | (#3143371)

Even if it isn't publicly ostracized as anti-Linux FUD, you can bet that Microsoft is eyeing this information as a potential weapon for their sales arsenal.

Re:There are no more heroes (2)

turbine216 (458014) | more than 12 years ago | (#3143417)

Who wants to take bets that this gets publicized as FUD that Linux does not a viable company make?


I'm not really sure you should call this FUD, no matter how it's spun by the media. This is real life. There is no dishonest or biased journalist/advertiser who could make this story any worse. This is BAD FUCKING PRESS for the OSS development community, plain and simple. Sure, Microsoft will have a field day with this. A lot of other companies will as well...but that's what happens.

It's pretty well known at this point that in general, business models that are based around the development of Open Source software typically DO NOT SUCCEED (with very few notable exceptions). This is one very good example of that. The fact that the company's management only made the situation worse is just gravy for Microsoft and its kin. It makes the whole event look very, very evil, and that's how it SHOULD look.

So to summarize...it's only FUD if it's not true. This, unfortunately, is very true.

Re:There are no more heroes (1)

grinwell (138078) | more than 12 years ago | (#3143420)

The question here is, did Loki without the taxes/FICA, etc. out of the paychecks? If they withheld, didn't deposit it, and then sent out a 1099, then the company should immediately be investigated for tax evasion and any other criminal charges that are relavent. This is fraud, and the victims are the employees. If the taxes were NOT withheld, then this is a non-issue. Yes, it sucks having a large tax amount due all at one, but thats life.


Unfortunately for the Loki employees, it sounds like the company "paid" them by "advancing" them loans on salary due. So your latter scenario is probably correct. I doubt they advanced the "full" amount of salary due, so the employees did get *screwed*. But of course, we knew that already.

Re:There are no more heroes (1)

lpevey (115393) | more than 12 years ago | (#3143450)

The article states that the earnings Loki sent 1099's on were paid as cash advances. Therefore, Loki didn't withold taxes from the payments, even though the checks were for the employees' net pay. Loki can't be charged with tax evasion, because Loki technically didn't pay the salaries to their employees. But the employees still have a right of action against Loki for the additional amount of unpaid salary. (Which the employees would then have to pay as taxes.)

Re:There are no more heroes (2)

kawika (87069) | more than 12 years ago | (#3143460)

I'm not an accountant but run my own business. Here's my understanding.

Loki can send a 1099 and say these guys were contractors, but the IRS may claim otherwise. If they were employees in 2000 then they most likely were employees in 2001. Loki should have paid 1/2 of the social security and medicare taxes.

If the 1099 status holds up these guys should be somewhat thankful. That will let them file a Schedule C and deduct their out-of-pocket expenses from income, although it sounds like they'll have to cough up taxes on the net after these expenses.

Self-employment tax (0)

Anonymous Coward | more than 12 years ago | (#3143480)

There's one big problem with being paid via 1099 instead of W2: you have to pay your own half of the social security taxes, instead of having your employer pay it. Take a look at that FICA section of your paystub, and that's what you personally end up paying again.

So even if Loki did not take out Federal and state taxes, the employees still got shafted for almost 10% of their pay. This is why consultants charge more when they work under a 1099.

Not to mention that 1099 recipients usually have to file quarterly taxes, and the employees may well be in for some nasty penalties for missing filing for almost a year.

Just proves the old addage (-1, Troll)

Anonymous Coward | more than 12 years ago | (#3143346)

Linux is a FREE alternative to commercial software. There's no money in giving things away for free.

I post anonymously, because the truth hurts.

Website for overworked and underpayed employees (2)

Dino (9081) | more than 12 years ago | (#3143348)

www.texasemployees.org [texasemployees.org]

Of course, Loki is not in Texas so it doesn't help their employess much :-(

Be wary of ANY check an employer writes to you: (3, Informative)

llamalicious (448215) | more than 12 years ago | (#3143357)

Even if you are a paid employee, be cautious about receiving any type of compensation by check from your employer. Even bonuses and advances.

Undoubtedly, you will receive a 1099 at the end of the year, this is standard accounting practice (and the law [in the States] for the company writing the check)

You are left holding the bag on taxes, so make sure you account for any mileage or other costs associated with making that extra money.

Bottom line: companies are keeping records, you should be too.

Loki Employees should retain thier code (0)

MrJerryNormandinSir (197432) | more than 12 years ago | (#3143362)

Maybe the Loki Employees should regroup and
bypass the management. Hopefully make some money
on thier own. Maybe they should go after Loki,
$350k.. that's criminal. I wonder if the employees
would win a cival case. I hate lawyers.

Here's a word to the wise, If an employer owes you a week's pay, cut your losses and move on!
Or sit there, do nothing but search for another job.

Long and WIDE (-1)

by FortKnox on (563942) | more than 12 years ago | (#3143390)

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.gimprc .grok .holiday .hotjava .jazz .kde .kermrc .lyxrc .muttrc .nc_keys .pgp .pinerc .profile .seyon .signature .ssh .stonxrc .susephone .tex .uitrc.console .uitrc.vt100 .uitrc.vt102 .uitrc.xterm .urlview .vimrc .xcoralrc .xfm .xim .xinitrc .xserverrc.secure .xsession .xtalkrc.Xdefaults .Xmodmap .Xresources .addressbook .addressbook.lu .bash_history .bashrc .dayplan .dayplan.priv .dvipsrc .emacs .exrc .gimprc .grok .holiday .hotjava .jazz .kde .kermrc .lyxrc .muttrc .nc_keys .pgp .pinerc .profile .seyon .signature .ssh .stonxrc .susephone .tex .uitrc.console .uitrc.vt100 .uitrc.vt102 .uitrc.xterm .urlview .vimrc .xcoralrc .xfm .xim .xinitrc .xserverrc.secure .xsession .xtalkrc.Xdefaults .Xmodmap .Xresources .addressbook .addressbook.lu .bash_history .bashrc .dayplan .dayplan.priv .dvipsrc .emacs .exrc .gimprc .grok .holiday .hotjava .jazz .kde .kermrc .lyxrc .muttrc .nc_keys .pgp .pinerc .profile .seyon .signature .ssh .stonxrc .susephone .tex .uitrc.console .uitrc.vt100 .uitrc.vt102 .uitrc.xterm .urlview .vimrc .xcoralrc .xfm .xim .xinitrc .xserverrc.secure .xsession .xtalkrc.Xdefaults .Xmodmap .Xresources .addressbook .addressbook.lu .bash_history .bashrc .dayplan .dayplan.priv .dvipsrc .emacs .exrc .gimprc .grok .holiday .hotjava .jazz .kde .kermrc .lyxrc .muttrc .nc_keys .pgp .pinerc .profile .seyon .signature .ssh .stonxrc .susephone .tex .uitrc.console .uitrc.vt100 .uitrc.vt102 .uitrc.xterm .urlview .vimrc .xcoralrc .xfm .xim .xinitrc .xserverrc.secure .xsession .xtalkrc.Xdefaults .Xmodmap

What more needs to be said? (3, Funny)

TheAwfulTruth (325623) | more than 12 years ago | (#3143391)

From the article:

"Founded by California intellectual property lawyer..."

worked for an outfit that didn't pay staff on time (2, Interesting)

peter greaves (462409) | more than 12 years ago | (#3143393)

in the late 80s early 90s in the UK. the excuse was always that BACS (Bank Automated Clearing System) had "failed" - yeah, right. they would usually pay late - and usually a few days up to a couple weeks late, and often after some maintenance revenue came in, just coincidentally. one of our people took particular exception to this and checked her rights (this is late 80s UK remember) - apparently they could pay you up a month late and not get any flak for it legally. o'course it turned out that making waves about it got you put to the back of the queue next month, so no one ever did that twice. of course the irony of the thing was we were an accounting software company with BACS payroll modules - we knew exactly that BACS is like a rock, and so was the software...sympathies for those folks.

Bummer for the geeks (1)

pyxl (7689) | more than 12 years ago | (#3143397)

Looks like a bunch of folks learned a very hard lesson in financial management.
What surprises me is that the corporations who invested in Loki didn't check things out more closely - they should have known better.
I think it would be a good idea if the folks who are owed salary sued the holders of the copyrights of the games they worked on for individual unlimited derivative work and distribution rights at very little or no cost in perpetuity - that way, they could get revenues from selling the games they worked on but didn't get paid for, and the folks that screwed them over would get very little or no money from it.
But that's just my view of fairness here.

Hang the bastard (-1, Flamebait)

Anonymous Coward | more than 12 years ago | (#3143398)

Hang the bastard and FUCK his wife. He made sure HE got paid. She needs to bear part of the responsibility if she WAS a secretary. I say pull down her panties and FUCK her. Hang the bastard tho.

Give me the games (2, Interesting)

terminal.dk (102718) | more than 12 years ago | (#3143400)

Suse / VA Linux should get the games, release them cheap / for free to get people to switch over to Linux.

Not sure what the agreements with id Software, Bungie, etc says. But I would be more than willing to pay the original came companies their $2 royalty for each game I could legally download.

Latest News! (0)

mteichrob (151747) | more than 12 years ago | (#3143402)

"Loki to offer food settlement deal... Employes who have gone: 8 to 12 months without pay recieve 3 large 2-topper pizza's, 4 to 8 months with no pay recieve $25 in food voucher coupons from Safeway, and 1 to 4 months a free cup of coffee from... you guessed it, the COMPANY STAFF ROOM!!"

Mod me off-topic if you will, but... (1, Troll)

PHAEDRU5 (213667) | more than 12 years ago | (#3143404)

When a company switches to Linux (AOL, for example), the Linux bigots in the office broadcast the message to all in a loud voice.

When a Linux company goes out of business (Loki, for example), the Linux bigots remain completely silent.

Re:Mod me off-topic if you will, but... (0)

Anonymous Coward | more than 12 years ago | (#3143477)

What the hell is a "Linux bigot"? Someone that doesn't like Windows or FreeBSD?

Re:Mod me off-topic if you will, but... (2)

scorcherer (325559) | more than 12 years ago | (#3143503)

Of course, the only reason why Loki went bust is Linux. Had they chosen any other geek platform to port non-geek games into, they would definitely have succeeded. Right?

Open Books! (5, Interesting)

zulux (112259) | more than 12 years ago | (#3143412)

The key to not having your suppliers/employees leave at the first sign of trouble is having open accounting in your company. I'm run a small consulting firm - and had a cash crunch a few years ago, and *nobody* cared because all my books were open. Everything. Salary, expenses, capital items, AP, AR. Even contracts for all/upcoming jobs. Everything. If you looked at the books you could see that I just planned improperly - I ran out and got a personal loan, and all was well a month later.

The gratest thing about open books, is that you don't have to lie. And you can't fool yourself into thinking things are better than they are.

AMISH VIRUS!! (-1)

Alan_Thicke (553655) | more than 12 years ago | (#3143413)

You have just received the Amish Virus!
Since we do not have electricity or computers,
you are on the HONOR SYSTEM!
Please delete ALL of your files....




Thank Thee.

Loki had good products (0)

Anonymous Coward | more than 12 years ago | (#3143415)

In fact, I own three of them.

But really, working without pay? Must've been one hell of an office.

Lesson learned (5, Insightful)

estoll (443779) | more than 12 years ago | (#3143435)

Without naming names, I worked for a company that experienced a similar downfall; however, not as extreme. I was a college intern at the time and the company employeed about 70 people. At the time, the sky was the limit. The company had a great reputation for open communication with its employees and an excellent working environment. We had monthly status reports from the executives on how well the company was doing and then one day, they just said they had no money left. It came as a shock to everyone. They said they had enough money to keep everyone employed for 6 months and would not have to lay people off if we got new business. Since the company had such a great environment and the employees were really happy there, people started taking salary cuts and some voluntarily gave up their salaries. No more than 2 months after the bad news, the 6 months they promised turned out to be a lie. They laid off almost 30 people in one day. Since I was just an intern, I finished my semester and left. I had big eyes on working for this great company but got quite a reality shock instead. I am now happily employed for a competitor of my old employer and I still see a couple resumes from people who work there or used to work there come across my desk every month. I think the economic bubble we lived in taught everyone a big lesson and for me it was, don't ever trust your employer when things seem even the slightest bit wrong.

Why did they stick around so long? (1)

darkbuns (541875) | more than 12 years ago | (#3143438)

If I were those guys, I would have left the company the first time they didn't make payroll. When a company doesn't make payroll, it's only a matter of time before the company goes down the tubes anway. Why did they let tens of thousands of dollars of money owed to them rack up when they should have just cut their losses and walked out after the first time they got stiffed.

$350,000 credit cards? one person? (1)

gamlidek (459505) | more than 12 years ago | (#3143446)

I'm curious how they were able to get that much credit? I wonder what kind of things Loki management did to persuade creditors that this employee had an income worthy of that much credit. I bet more was going on here than we see... I would bet these employees were being strung along by management somehow, and this particular employee was being told a lot of things to make him believe getting this credit and using it to help the company would benefit him in some way.

This mess is unbelievably disgusting. Little Enron, indeed.

-jp

Hard to feel sorry... (1)

sterno (16320) | more than 12 years ago | (#3143453)

I don't know about anybody else, but I barely trust my employer to handle compensation of plane tickets let alone hundreds of thousands of dollars. If they stole his credit card, then he can file a dispute with his credit card company and criminal charges against his employer. If he willingly let them do this, then that just seems extrordinarily naive.

Seems like a little bit of economic darwinism to me...

Mr. Draeker... (0)

Anonymous Coward | more than 12 years ago | (#3143455)

... was positively idolized by many a /. editors and readers. Anyone care to roll the accolades into a thin tube and stick them up yer ass? Thought so.

Yet another failed free/open/Linux/whatever company. Golly gee whiz, what a surprise.

Thankyouverymuch.

_____
Hey - was that an emu? hmmm....

linux viable? (0, Troll)

h4x0r-3l337 (219532) | more than 12 years ago | (#3143469)

Anyone who still thinks you can create a viable business selling linux software, raise your hand...

Thats life in a start up folks (2, Redundant)

Ars-Fartsica (166957) | more than 12 years ago | (#3143483)

Its not all free massages and BMWs.
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