I needed a few minutes to cool off at work today - unfortunately there was no liquor nearby - so I dove into the Joystiq source
for Matthew Razak's story
on the SouthPeak/Gamecock/owed-monies scandal from the other day. It is
an interesting read, and it becomes more
interesting on page 2
, in an interview with Gamecock founder Mike Wilson. His side of the story is that SouthPeak essentially hired him and fellow Gamecock co-founder Harry Miller, as part of the sale, to convince Gamecock's former development partners to accept (much
) less from SouthPeak than they were owed.
But what really caught my eye was a little tidbit from Mike near the bottom:
The only people we knew [at the time of negotiation] who knew SP were our PR firm, Sandbox, who told us they were generally good guys who paid their bills. So this is what we told our employees and vendors. I have since learned that this has never been the case with any company run by Terry Phillips.
Anyone who's played a point-and-click adventure game knows the term for words like this - HINT
. So I turned to my faithful investigation assistant, Google, for some enlightenment. Google Terry Phillips SouthPeak
There's more than one interesting hit here, but I'll get to that in a moment. Top of the list is Terry's profile on Forbes
, which lays out the following:
- From 1987-91, he was Vice President of Sales at Acclaim (you remember Acclaim
- In 1991, he founded Phillips Sales Inc., which was apparently a big behind-the-scenes player
in video game distribution; the company was sold to its employees in 2003
- Since 1999 he's been managing Capitol Distributing LLC, which sounds like familiar territory for Mr. Phillips
- He's been managing SouthPeak since 2000, as a result of personally purchasing assets from their previous parent company
- He claimed under $60,000
compensation from SouthPeak last year (he may want to ask Bobby Kotick
for a pick-me-up)
- In 2007, Terry Phillips made a formal statement to the Securities and Exchange Commission regarding an incident with Take-Two in 2000-2001--
. Google Terry Phillips SEC 2000..2001
. See the PDF from the SEC website?
In a nutshell - the SEC investigated and filed a formal complaint against Take-Two for fudging their financials, and against Capitol Distributing for complicity. The scheme? Take-Two would sell all its manufactured stock of a game to Capitol, and record the full amount as sell-through, e.g. to consumers - then Take-Two would pay Phillips Land Company
for undisclosed services. Capitol then floated cash from PLC to pay for Take-Two's games, and then sold them back
to Take-Two as "returns" from PLC.
Here's the money shot, from page 3 of the complaint:
Phillips Land Company is a Virginia company 50 percent owned and principally operated by Terry M. Phillips. It has no employees and, in the ordinary course of business, has no involvement in the purchase, sale, or distribution of video games.
Wait! We're not done.
Source-checking, I went back to my original Google search and noticed another hit from Joystiq - leading to this article on Gamasutra
from just the other week:
"SouthPeak Appoints Embattled Ex-Take-Two CEO Eibeler To Board"
Terry Phillips, now chairman of SouthPeak, has seen fit to bring former Take-Two CEO Paul Eibeler on-board. The article notes that Dow Jones financial website MarketWatch named Eibeler the Worst CEO of the Year
for 2005 (in any industry).
To recap, here's what I've learned today about Terry Phillips, SouthPeak chairman.
- Was ordered to cease-and-desist exchanges fraud by the SEC
- Laundered money through a personal front company (leading to above SEC action)
- Hired a former, borderline-unemployable business partner to the board of his new company
- Assisted Acclaim executives in hoarding money a decade before their bankruptcy
- Under-reports his personal earnings
- Is personally involved in the under- and non-payment of former Gamecock partners
- Eats babies
- Cooks books to support his baby-eating habit
Man! I love the Internet.