Your Kid’s Not Going Pro

A Youth Sports Blog

Posts Tagged ‘Terry Drayton

Count him in

with one comment

For the youth sports leagues who lost money trusting it to Terry Drayton’s Count Me In, a savior has emerged… Terry Drayton.

drayton

That’s right, bitches. I’m gonna own 2009 after all.

From John Cook (no relation to your humble blogger) at TechFlash, who has done a great job breaking news on the Count Me In saga:

Let’s call it a comeback. Count Me In founder Terry Drayton is leading a new effort to buy back the assets of the troubled online payment processing company.

The move comes a little more than three months after Bellevue-based Count Me In was forced into Chapter 7 bankruptcy by some of its non-profit customers for losing roughly $5 million in registration fees.

Drayton has now emerged as the leader of an entity called Rainier Software that appears to be in the pole position to buy the assets. It’s the latest twist in a saga that has drawn considerable chatter on this blog. According to court documents, Rainier recently made a $200,000 “stalking horse bid” for Count Me In’s domain names, technology, contracts and other assets.

The owner whose incompetence and/or malfeasance (depending on what league you talk to) led his company to bankruptcy and screwed up the finances of organizations across the country gets to buy Count Me in back for a song? This can’t be legal, right?

Oh yeah, it is, though by the time you get through the ridiculousness of how this can happen, it’ll make sense that the trustee assigned to the Count Me In bankruptcy is named Ed Wood, because the process seems as strange as an Ed Wood movie.

Basically, what happened was. On March 20, about three months after Count Me In was forced into bankruptcy, a company called Rainier Software filed something called a financial statement, or UCC-1. It’s filed by a lender with the state’s secretary of state as a means to secure property owned by the debtor. So Rainier Software was saying it lent money to Count Me In, and that Count Me In put up property as collateral — thus bringing it to the head of the bankruptcy line as a secured creditor. Ed Wood was OK with this because he determined that the youth leagues who used Count Me In, and were still using it, would be out more money if the company shut down than if he allowed it to continue on.

Meanwhile, Ed Wood was determining that he couldn’t find a buyer for Count Me In. Ed Wood “determined that businesses of the type and sophistication of the debtor’s are dominated by a few businesses, including the debtor,” according to the latest bankruptcy court filing. “The Trustee has been in constant contact with most of these companies, but only one company, Rainier, negotiated a purchase and sale agreement.”

The operator of Rainier? None other than Terry Drayton.

So for $200,000, less the approximately $49,000 discount Rainier (Drayton) gets for its secured-debt level on Count Me In (Drayton), Rainier (Drayton) is first in line to buy the assets of Count Me In (Drayton). Rainier (Drayton) has 60 days to give the court a list of contracts from Count Me In (Drayton) plans to assume — meaning the possibility exists that leagues that are owed money by Count Me In (Drayton) not only might never see it again, but that they might be tossed overboard by the new owner, Rainier (Drayton).

Of course, a “stalking horse” deal such as this means that others can bid a higher price and take Count Me In (Drayton) out of the hands of Rainier (Drayton) — as long as Rainier (Drayton) gets a break-up fee of $65,000.

John Cook’s story notes that the Washington Secretary of State has gotten numerous complaints about Drayton. But all of this, while crazy, appears to be perfectly legal. Which means your league could soon be perfectly fucked. And that’s why Drayton is a serial entreprenuer who gets on magazine covers, and you are not.

Advertisements

Terry Drayton’s latest legal trouble

leave a comment »

The beleaguered owner of Count Me In, which was forced into bankruptcy after running up a $5 million in IOUs to youth sports organizations that used it for online registration services, is now extra beleaguered. The Seattle tech news site TechFlash reports that a company called The Active Network has sued Count Me in for patient infringement. (The lawsuit itself is here.)

(By the way, I should apologize for getting to this a few days’ late. Given that Terry Drayton and Count Me In are very popular search terms for this site, you’d figure I’d be all over this at least in the name of giving the [very angry] people what they want.)

draytonIf cruel irony is what you readers want, here it is.

San Diego-based Active claims an affiliate of Count Me In has infringed on its online registration-related patent, titled “METHOD AND SYSTEM OF ELECTRONICALLY RECEIVING AND PROCESSING MEMBERSHIP INFORMATION
OF AN ORGANIZATION.” (Apropos of nothing, it was granted Sept. 11, 2001.) Active is saying that Arena Group, Count Me In’s parent, used this patent as part of its own online registration program — and used the Active registered trademark to boot.

Active says Seattle-based Count Me In had prior knowledge of its patent before using it, through the lawsuit doesn’t spell out how anyone at Count Me In knew about it. Drayton and Count Me In have not yet responded to the lawsuit.

The Active Network filed this case in federal court in Seattle. A similar lawsuit Active brought in federal court in southern California, was dismissed in February, only a few weeks after filing. That doesn’t speak well for Active’s chances of winning. Even if it won, what would it get out of a bankrupt company that can’t pay the bills it already has?

But that might be beside the point. Active is a Count Me In competitor and has its own competitive reasons for wanting to crush a company already forced in bankruptcy by the some of youth sports organization to which it owed money. Actually, Active has been, um, active on various web sites doing a little grave dancing on Count Me In and trying to sell its own product, which is used by Little League Baseball. (Look at the comment sections here and the last paragraph of this story. Certainly, even a mention on this little ol’ blog will make Active executives smile.

Belated Terry Drayton update

with one comment

Here is a Jan. 28 release from Terry Drayton of Count Me In Corp., which came up about $5 million short in paying back youth sports organizations and others that used its services to collect league fees and such. Drayton continues to assert that everything would have been just fine and dandy had leagues not been so gosh-darn impatient. (Like any reader impatient it took me a few days to get around to this.)

Count Me In Corporation (CMIC) today announced it was unable to prevent an involuntary Chapter 7 bankruptcy petition and expects the court to appoint a trustee to take over the online registration and league management software company and handle liquidation of its assets.

On January 8, three Alaska-based sports club clients asked the Federal Bankruptcy Court to take over CMIC’s operations on January 28 unless the eight-year old organization could show it was paying its obligations as they became due. Those clubs are among 220 clubs and organizations across the country that CMIC owes about $5 million in outstanding online registration fees.

“We’ve been working for months in this incredibly difficult economy to find a buyer for CMIC that would allow us to repay our clients,” said Terry Drayton, CMIC CEO. “We got very close in November and were very close again this week to securing a deal but the immovable deadline of the involuntary bankruptcy petition put us in an impossible position.

“We asked the three clubs to withdraw their petition, as we didn’t think it was in the best interests of all clients, but they refused,” he added.

According to Drayton, CMIC was working with one well-qualified buyer, but the company withdrew their bid on Monday, concluding it could not complete the transaction by the January 28 deadline.

As part of Chapter 7 bankruptcy, the court appointed trustee will now take charge of liquidating CMIC’s assets and distributing the proceeds among the company’s debtors.

Drayton also announced that CMIC’s parent company Arena Group, Inc., which is not part of the bankruptcy filing, will keep all client Web sites up and running and continue to provide technical support, allowing the clubs and teams to continue to function normally while the trustee works to find a buyer.

“At least we can keep supporting the clubs for the time being and minimize their pain, including helping clients process credit card charge-backs,” Drayton added.

“This is an incredibly sad day for our Count Me In Corporation clients,” continued Drayton. “It was my intention to repay every penny we owed to our clients. Unfortunately this involuntary bankruptcy won’t help achieve that, but now it is out of my hands.”

In the company’s eight years of operation, CMIC collected about $175 million for its clients and remitted $170 million, or more than 97 percent.

According to Drayton, the company can account for every penny of the $5 million shortfall, noting the funds went to normal operating costs in incremental amounts such as improving technology and paying staff salaries over the past eight years.

Geez, it gave back 97 percent of the money it was sworn to reimburse. Is that not enough for you jackals?

No.

The Nordic Skiing Association of Anchorage was one of the three organizations that forced Count Me In into bankruptcy. It’s owed $150,000. From the Anchorage Daily News:

“I don’t see this as a victory until everyone gets their money back,” skiing association executive director Dianne Moxness said.

Moxness said the association has not talked to Count Me In, although there have been written communications.

“They sent us an e-mail, later a letter, asking us to withdraw our petition” to force Chapter 7 bankruptcy, Moxness said. The association e-mailed back that Count Me in should “speak to our attorney,” she added.

“And they never contacted him.”

An 8-year-old company, CMI was set up to handle registrations and online credit card payments for sports and youth programs. The company took a percentage of the payments for handling the online bookkeeping and passed the bulk of the money along to the organizations, many of which are — like the ski club — nonprofits.

Up until this year, the system worked fine, said Moxness. But then Count Me In stopped sending checks even as it continued to collect payments.

It has been reported the company was diverting funds that should have gone back to its clients in order to help pay for a pricey new computer system, although it remains for an independent, court-appointed trustee to determine exactly where the money went.

Written by rkcookjr

February 2, 2009 at 4:50 pm