@MagicalWingLT
It's quite simple. Ugobe never "made" pleo. They designed it and the manufacturing process, but hired another company to actually do the manufacturing. Likewise, they (for the most part) don't actually sell pleo either. They let other companies like Amazon or Pensonic, etc. do the selling. So before they folded up their shop and went home, they said "Hey, you in China making the pleos, Amazon will contact you when they need more to sell." and "hey, Amazon, when you need more pleos, call these guys in China."
Now, this is only temporary. Ugobe owns the right to pleo. Ugobe has filed bankruptcy. But Ugobe still owns the rights to pleo. They can authorize the company to make them, and the other comapny to sell them. Once the bankruptcy is settled, and the courts sell those rights to pleo, those arrangements are in the hands of the new owner, who might decide to leave them as is, or cancel them.
Think of it as I'm renting my house to you. I decide to sell the house. You can keep living in it while it's up for sale, and you keep paying me the rent. Once the house is sold, you will either start paying the rent to the new owner, or the new owner will tell you to move out, or the new owner may raise the rent.
Now, with Chapter 7, Ugobe says "We owe a bunch of people money. We can't pay them back." The court says 'Fine. We'll take everything you've got, sell it, and divide the money up amongst the people you owe. And whatever we give them, that's all they get. And Ugobe now debt free, but out of business."
With that in mind, the courts hold an auction and offer up the office equipment, the computers, any inventory of pleos Ugobe has in stock, the patents and rights to make and sell pleo, and all the development and programming related to pleo. Now, there's nothing illegal about Caleb Chung and a few of his friends from going to that auction and bidding to buy all that back.
For example, back in the late 70's when the Hunt brothers of Texas tried to corner the silver market, I know a man who had a nice big house with lots of expensive furnishings he bought investing in silver and gold. Silver went from $3 an ounce to $50, and gold went from $32 and ounce up to $800. He made millions. Then the government stepped in and in one fell swoop silver went to $5, and gold down to $200. Suddenly, he was no longer a millionaire, bankrupt, and the courts took his house and all the furnishings to pay off his debt. When the day of the auction came, attendance was almost non-existant, so this friend bid on his own stuff, and bought it back from the courts for a few hundred dollars. he owed hundreds of thousands, but the whole point of bankruptcy is that the courts wiped out his debts. So in the end, he was debt free, but managed to still keep most of his stuff.
Likewise, Ugobe owes $6.5 million dollars. But potentially Caleb and crew could form a new company and buy some or all of those rights back from the courts to form a debt free "Ugobe II" to pick up where they left off.
But then again, Pensonic or Mattel might outbid them and take over pleo sales.
@junkroxy
The info comes from the pleoroom forums. The folks who run pleoroom.com are one of those "authorized distributors." As such they are privy to some info the general public doesn't get.
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Topic: Ugobe is dead (Read 26798 times)