In stark contrast to the grace, foresight and respect for colleagues and friends demonstrated by Baron Grayson and Sue Stonebinder, another 'business' closure in SL defies all logic and is remarkable by the seemingly deliberate intent to leave as much mess, unpaid bills and confusion as possible. It also raises some interesting points of law. So lets look a little closer at the events generating some interest.
The owner of the 'Runway' magazine published in SecondLife and at the centre of the mess decided to leave SL. Not a particular problem. The magazine had after all, only been operating for 12 months and and it's focus was in no way unique; yet another fash mag among so many. Even the name , 'Runway' was unoriginal.**
Having read the Runway blog and taken all statements into consideration, it seems clear, the ‘magazine’ owner did not follow acceptable business practice. maggie mahoney did not call a meeting with staff and creditors prior to the announcement of their leaving sl. She made no reassurances or apparent provision to wind up her business affairs in a proper manner. She merely stated:
"RUNWAY will not be sold. It has been left to the staff if they desire to continue its legacy;
if not, it will pass along with Maggie and Ocean."
- In short, the owner announced that she had left Sl and made a clear statement that she relinquished the magazine and had in fact, left it to the staff.
- The staff were named.
- There were no statements relating to financial reports, debts and properties including the magazines headquarters, nor were there statements or reassurances in terms of provision for unpaid debts.
- Staff had not been advised of this decision prior to publication in the Runway blog. Indeed, many had their attention drawn to the blog by people NOT connected to the magazine.
In fact to the contrary, it was clear that the focus was the owner's own 'happy ever after' ... as maggie mahoney stated in relation to she and her paramour:
"They both now live happily ever after in real life ".
Pretty clear so far.
Now while it is nice that people live happily ever after and like to share such, that was not really the issue at hand. No amount of flowery sentiment could cover the issue affecting magazine staff and others involved in this 'business venture'. Therefore....
The fallout was inevitable.
Consider the obvious:
- In order for staff to maintain the magazine as so clearly intended by maggie mahoney, they needed more information.. all they knew was what was in the rather sparse ‘runway closes its doors' blog entry.
- All parties. including the owner, agreed that no effort was made prior to and during that ‘media release’ to address significant outstanding issues and in particular, outstanding debts.
- It was alleged by the Editor that 'staff and freelance writers had not been paid for their last month of work, while the owner reassed everyone that they would be paid in a matter of days'(1) Payment was allegedly not received.
- All parties including the magazine owner agree that no provision had been discussed between the ‘owner’ and the creditors.
" If the staff wishes to continue RUNWAY - its yours. We are giving it to you. You have our permission to use the RUNWAY logo and continue it in the nature that it was intended" (presumably as a fash mag)
Staff having been 'given' the magazine, made a decision to try to clean up the apparent mess and sought the assistance of the owner of BOSL. He agreed to pay all debts and incorporate the magazine into his businesses while retaining it’s identity. This was apparently not what the ‘reinquishing owner’ wanted. Belatedly, the ‘owner’ then rescinded the ‘give away’ and resumed ownership of the ‘magazine’ - and it’s debts.
Hopefully now a proper businesslike exit will be undertaken. Time will tell.
I fail to see why anyone other than those that have made such an unfortunate announcement and left such a confusing mess should be vilified. At best the actions of the magazine owner were amateurish, at worst, a cynical attempt to abandon a sinking ship. The latter is borne out by the owner's own rather pessimistic financial statements relating to the 12 month venture into online publishing. On the matter of amount of funds available from the sale of her sim however, she remains silent.
' I have setup a trust fund to pay for the server space for the website from the proceeds of the sale of the sim' ... The funds from the sale of the sim were earmarked and pulled down to be put into a trust account to maintain the cost of the website accounts, domain renewals, and hosting accounts for the staff ...to see that they were paid.
One would assume that people were more important than the website of a financially limping magazine. Perhaps the order in which she specified the purposes for which the 'trust fund' was established says much about the owner's priorities. Notwithstanding this aside, let us look at this statement.....
' I have setup a trust fund to pay for the server space for the website from the proceeds of the sale of the sim' ... The funds from the sale of the sim were earmarked and pulled down to be put into a trust account to maintain the cost of the website accounts, domain renewals, and hosting accounts for the staff ...to see that they were paid.
One would assume that people were more important than the website of a financially limping magazine. Perhaps the order in which she specified the purposes for which the 'trust fund' was established says much about the owner's priorities. Notwithstanding this aside, let us look at this statement.....
' I have setup a trust fund'
As a trust fund is a legal entity which is not merely established under domestic torts law, but also recognised by international law, I feel certain all parties owed will be awaiting further details in order that they may meet with the trustee , submit their accounts and receive their outstanding payments in full. There is no reason why this trust should not have clearly named beneficiaries where those beneficiaries have an interest in any monies available to pay amounts owed. After all, as demonstrated in Bragg, SL is considered a ‘real’ economy and the magazine owners do owe ‘real $USD’ in accordance with the exchange rate.
It seems to me attention needs to be firmly centred on the owner of this ill-fated 'business' venture. Hopefully the so-called ‘trust’ maggie mahoney advises she has ’set up’ for debtors has indeed been been appropriately and legitimately established and is not a mere term tossed out to mollify those they owe and as a belated attempt at damage control.
After all, the owner of Runway is the architect of this mess and bears sole responsibility for it. Nothwithstanding the obvious mess, subsequent hurt feelings and people alleging they are owed money, the legal issues raised by the fallout from this virtual and www based 'publication' are of interest and I think worth some consideration.
*** please note despite the identical name the 'Runway' magazine and it's associated blog cited in this article is essentially SecondLife based and has no association with the US based Runway Magazine, Runway LA or runway magazine Australia all of which are legitimately incorporated companies.
(1) For further information and references:
11 April
By Thalia Jie – former Fashion Editor of RUNWAY Magazine
In respect of the demise of RUNWAY magazine, I have no obligation to make any comments, however I will state that various blog postings made about Frolic Mills and the RUNWAY/BOSL merger are not factual. The facts are:
• On the 8 April 2009, RUNWAY announced the departure of both CEO’s from Second Life in a blog posting. No prior notice was given to staff. [http://www.runwaysl.com/blog]
• RUNWAY did not pay its employees or contracted writers for their last month of work, while reassuring everyone that they would be paid in a matter of days.
• RUNWAY owners, Maggie Mahoney and Ocean Bates created the impression, right up to the day that the demolition started on the RUNWAY build, that it was business as usual.
• A public statement was issued on their blog that RUNWAY magazine “has been left to the staff if they desire to continue its legacy” however no mention was made of outstanding revenue from existing advertising contracts.
• Neither of the RUNWAY CEO’s replied to emails or telephone calls
I personally would like to thank Frolic Mills for agreeing to an invitation to join myself, EmmZ Tzara and Vera Canning in a meeting to discuss these events. Frolic Mills gave his commitment that all RUNWAY staff would be paid and all advertising contracts honored. The result of that meeting was that the transition to BOSL was agreed to and work proceeded on the May issue of RUNWAY magazine. Designers and advertisers were reassured that everything was returning to normal.
On April 9 2009 a further statement was issued on the RUNWAY blog by the departing CEO’s of RUNWAY announcing that: “RUNWAY will not merge with BOSL” and citing coercion on the part of Frolic Mills.
By Thalia Jie – former Fashion Editor of RUNWAY Magazine
In respect of the demise of RUNWAY magazine, I have no obligation to make any comments, however I will state that various blog postings made about Frolic Mills and the RUNWAY/BOSL merger are not factual. The facts are:
• On the 8 April 2009, RUNWAY announced the departure of both CEO’s from Second Life in a blog posting. No prior notice was given to staff. [http://www.runwaysl.com/blog]
• RUNWAY did not pay its employees or contracted writers for their last month of work, while reassuring everyone that they would be paid in a matter of days.
• RUNWAY owners, Maggie Mahoney and Ocean Bates created the impression, right up to the day that the demolition started on the RUNWAY build, that it was business as usual.
• A public statement was issued on their blog that RUNWAY magazine “has been left to the staff if they desire to continue its legacy” however no mention was made of outstanding revenue from existing advertising contracts.
• Neither of the RUNWAY CEO’s replied to emails or telephone calls
I personally would like to thank Frolic Mills for agreeing to an invitation to join myself, EmmZ Tzara and Vera Canning in a meeting to discuss these events. Frolic Mills gave his commitment that all RUNWAY staff would be paid and all advertising contracts honored. The result of that meeting was that the transition to BOSL was agreed to and work proceeded on the May issue of RUNWAY magazine. Designers and advertisers were reassured that everything was returning to normal.
On April 9 2009 a further statement was issued on the RUNWAY blog by the departing CEO’s of RUNWAY announcing that: “RUNWAY will not merge with BOSL” and citing coercion on the part of Frolic Mills.
My decision regarding the BOSL/RUNWAY merger was not made through coercion or manipulation nor was I forced into any actions in a state of “shock”. I find that implication personally insulting.
My decision to merge with BOSL was made on the following basis:
• Paying RUNWAY employees monies owed
• Paying freelance writers/photographers for RUNWAY projects
• Honoring existing RUNWAY contracts with advertisers up to and including the July issue of RUNWAY
• Acting decisively and promptly as the news of the CEO’s departure had been announced in a public forum
• With full knowledge that despite the RUNWAY blog statement that RUNWAY magazine “has been left to the staff if they desire to continue its legacy”, a blog statement is not a contract, and it is not a legal transfer of ownership.
• Misgivings regarding exactly what “the legacy” of RUNWAY magazine entailed.
On April 9 2009, in the same blog post, CEO Maggie Mahoney stated that she has “decided to retain the branding rights and trademark [to RUNWAY magazine] and let the magazine officially close”
Please direct all inquiries regarding monies owed by RUNWAY to Maggie Mahoney and Ocean Bates.
I have listed the facts as I understand them, and there will be no further comments.
Thalia Jie
11 April 2009
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