From: Jason Mulligan <[s--li--o] at [test.com]>
Newsgroups: rec.games.frp.misc
Subject: Further news about ICE and Tolkien Enterprises
Date: Tue, 31 Oct 2000 13:40:56 +1100

Another missive appeared on the RM list regrading the ICE Chapter 7 deal.

From: [H H Huggins R M] at [cs.com]
Message-ID: <[c c 915203 272 f 801 c] at [cs.com]>
Date: Mon, 30 Oct 2000 20:53:32 EST
Subject: On Tolkien Enterprises and ICE--Howard H. ex-ICE

 I have been following the swirling speculations and planning on the 
list. I believe I am on firm ground in clarifying a few things that have 
come up; I have checked my info where I could. Having protested the "Dark 
Lord's" treatment once I feel much better about repeating my effrontery; 
I may have some "Took" blood in me like the Baggins family. This needs 
stating at least once; although I do not anticipate posting repetitious 
rantings on this topic.
 
 It is entirely factual to say that Tolkien Enterprises has acted 
consistently throughout the Chapter 11 process to shut ICE down -- for 
whatever reason. They repeatedly tried to restrict our use of our most 
basic assets which would immediately kill us and done all they were 
allowed to burden us with incessant demands  -- often delivered Friday 
with a demand that they receive them Monday.  They routinely would send 
notice of things around midnight our time and claim they were from the 
previous day and say we had three days from when they sent it. 

We repeatedly went to court over these issues trying to get enough room 
to function. If I am informed correctly the judge at one point instructed 
them to work with us to sell the Tolkien inventory and come to some sort 
of deal. They ignored this.  So we could not sell the Tolkien inventory, 
but they would not let us destroy it and forced us to pay to insure and 
store it. They did everything they could to make our 11 unworkable in 
other words.  I think you get the picture.
 
Why? That is speculative. There are many theories. (A) We're jerks and 
deserve it; naturally, we don't think that would be entirely fair. (B) 
Perhaps they just feel like it and anyway they treat everybody this way; 
check out John (Creedence Clearwater Revival) Fogerty's experience with 
Sol Zaentz Associates which owns Tolkien Enterprises. (C) Perhaps they 
hope to make a quick-killing (how appropriate) and a windfall profit 
taking over the ICE properties and reselling and licensing them. (D) More 
persuasive is the notion that some of the Middle-earth IP ICE has created 
may pose them a legal and financial problem if other licensees have based 
some of their products, films etc. on material created by ICE rather than 
Tolkien. Ironically I don't think it would occur to anyone at ICE to sue 
for $ if this were the case and we were in a normal relationship with TE 
and the other licensees participating in "the Tolkien thing;" perhaps in 
our place they would and figure we're no different. 
 
 No one knows really. If they wanted us to survive to pay them they might
have allowed us to sell our huge inventory of Tolkien material. I 
answered several emails, letters, phone calls a day asking to buy the 
stuff every day for the last year. We only owed them money for the right 
to produce and sell those products, but they refuse to allow us to sell 
them. They are within their legal rights but you can imagine our 
frustration. If sold for normal wholesale amounts those products would 
almost eliminate what we owe them -- at least what we think we owe them. 
They double the figure by adding interest, TE mistakes in calculation, 
demanding royalties on all sales to the book trade even if it was 
returned, and demanding their 65% on foreign royalties receipts whether 
or not they were ever paid.  The bankruptcy code lets them add their 
legal fees, however ...... You see where this inevitably 
goes.

Our legal fees were about $12,500 during the 11 process.  They are 
apparently trying to claim over 10 times that amount just to attack us.  
We handled their attacks and the entire rest of the process for about 
1/10th what they spent to kill us?  Makes you wonder why?  Why was it so 
important to them that ICE die?  They claim ICE is nearly worthless and 
should not be allowed to operate and yet they spend an enormous amount of 
money to kill us?  This is one reason why we find reasons (C) and (D) 
above so persuasive.  Needless to say we will be watching the movie and 
the liquidation process with great interest.  Other TE licensee are using 
our material without permission already.  Of course, TE claims that 
everything to do with Tolkien is theirs. I think our poor abused authors 
may have something to say about that later.

To us it seems like being compelled to dig our own grave and then they 
bill our families for the services of the execution squad and the cost of 
the ammunition used to kill us. That nearly triples what we think we owe 
them. Surprisingly, an investors group wanted to start a new company and 
wanted to use our Tolkien material and services to create a multi-million 
dollar Tolkien publishing program.  They received rejections and vetos 
from TE both to direct and indirect approaches; we could have paid TE 
everything we owed and become financially prosperous from the sale of 
assets and studio services to the new company and the new company would 
have paid them additional millions in royalties.  This company could have 
become a reality as it was backed by two high-level investment bankers in 
New York.  TE found out we were involved, even peripherally, and promptly 
killed the deal and then made sure New Line Cinema did as well.   

By the way, over the years ICE has paid them around three million 
dollars.  They always demanded 12.5% of sales because they were going to 
have a movie and then now that there is truly a movie, we no longer even 
exist.   The irony is immense.
 
Again, I think you see where all this is heading. In the end we had to 
agree time limits to get enough room to function. We expected an advance 
from a licensing deal to be with us in time. It wasn't and TE wasn't 
going to give us any extension. So we died. It was a close one but we 
missed our saving throw. It happens.
 
A few miscellaneous clarifications. Contrary to some reports on the list 
our sale of our building was not blocked and is not subject to the 
Chapter 7. The $60,000 "sale" price for RM was an advance against a much 
larger (up to $2.1 million) licensing agreement for online use. There are 
numerous companies interested in the IP and it will be used.  Most of 
them are in electronic entertainment and have money and know the value of 
the Rolemaster IP. 
 
There. I've said it. Those are the facts as I know them. Amazing what 
reading The Lord of the Rings will do for your backbone. By the way 
standing up is much more satisfying than kneeling.
 
 
 Howard Huggins 
 ex-ICE