Wednesday, October 15, 2008

Michael Robertson Continues His Shell Game with Linspire's Missing Cash

As I mentioned last month, Michael Robertson and Larry Kettler were sued for mismanagement of the now defunct Linspire. Although I am not a party in that lawsuit, it was my hope that it would help shed some light on what happened with the millions of dollars in missing cash and other Linspire assets.

Robertson and Kettler finally responded to the suit, and I got a copy of their response. From what I could see, what they produced did not provide any meaningful data on the missing cash. It appears that Robertson simply dumped on the plaintiff over 200 pages of misc. bank statements (not even covering the full periods from Aug. 1, 2007 to present). They failed to produce any meaningful financial statements, Income Statements, Balance Sheets, closing documents on the Xandros deal, etc. From the mishmash of evidence that was provided, it IS CLEAR there were in fact millions of dollars in cash when Robertson took over as sole Board member just over a year ago, BUT it is still very UNCLEAR where that cash ended up.

Michael Robertson - What is he hiding?

The lack of meaningful financial documents in Robertson's response didn't surprise me in the least. After having worked with Robertson for over six years, I witnessed first hand all of his legal maneuvers and tricks. One of his favorites was to overload opposing counsel with meaningless discovery documents, forcing them to sift through piles of papers to find the needle in the haystack, rather than just producing the documents which clearly show he is in the right. (This is a tactic people often use when they're NOT in the right.)

If Robertson and Kettler had nothing to hide, why wouldn't they provide HELPFUL documents that show EXACTLY what happened with the cash? If there is a good explanation, why wouldn't they simply provide that evidence? What is Robertson hiding?

According to one of the documents, the new Linspire Board was made up of Michael Robertson, his wife Leslie, and Larry Kettler (Robertson's consummate "Yes Man"). Not exactly what you'd call an "independent" board. Also, I'm not sure how Leslie and Larry could be on the board, considering the shareholders were never notified of these changes. The shareholders WERE properly notified when Michael fired all the other board members over a year ago, but have not been notified of any changes since. Again, why hide this?

So, my questions for Michael Robertson are:

1. If the only financial documents you plan on providing in the derivative lawsuit are bank statements, why not provide ALL the bank statements for the periods of August 1, 2007 through the present? (I would suggest to the plaintiff's lawyers that they subpoena the bank statements for the missing periods and START looking there. If Robertson is going to force you to look for the needle in the haystack, at least make sure all the haystack is there.)

2. Why haven't you held a shareholders meeting since taking over exclusive control of the Linspire Board over a year ago?

3. Why after months of you having sold Linspire to Xandros haven't you shared any details of that transaction with the 100-some-odd shareholders?

4. Why haven't you produced any meaningful financial statements, such as Income Statements or Balance Sheets to shareholders or to the plaintiff and lawyers in the derivative lawsuit?

5. Why are you trying to dissolve the corporation so quickly without explaining anything to the shareholders?

6. What happened to all the cash? Did you funnel it to yourself and/or your father-in-law? Did you squander it all in one short year through incompetent management of Linspire?

7. And lastly... When we had to let some very good, committed, long-term employees go at Linspire, you said you wanted to only give them two weeks of severance. I disagreed, and as CEO, I made the decision to give them more reasonable severance packages. You were so greedy and upset with the CEO's decision, that you filed a bogus police report and called them all embezzlers! Your argument for giving these good employees such piddly severance payments was that you wanted to keep as much money in the company as possible, claiming this would be better in the long run for those employees, the shareholders and the Linspire customers. So, my final question for you Michael: How'd your brilliant plan work out for everyone?

Kevin

6 comments:

jimmershere said...

Kevin, I've been reading about the situation w/ Linspire(AKA Lindows) all day. It caught me by surprise at first; I was a fan of some of the early versions of Lindows and thought (like others)it could be a great product. In fact I contributed money to Lindows through it's website years ago(so in some small way I too am a stakeholder in the now defunct company). I communicated with Michael a couple times via email as well. Wow! I can't believe the guy is such an a$$hole! I've never run nor started my own company (yet), but I have helped other owners with their startups, which taught me that THE MOST important assets a company has are it's reputation and a group of talented employees. I can't imagine what it's like to be so drunk with greed and corruption that you are willing to ruin your employees lives and their own reputations. (What's it like Michael?) Then ON TOP OF THAT, he has likely stolen millions of dollars from Linspire's stockholders and investors. What a despicable bag of sh*t! Kevin, I'm glad you're trying to help get to the bottom of this mess. I despise people devoid of any kind of ethics; they're very self-serving, often-times sociopathic. Please keep us updated on what's being done to expose Michael Robertson as a thief. It would be nice to see justice prevail.

Kevin Carmony said...

jimmershere,

I have never seen Robertson give much value to employees. He berates them, curses at them, looks down on them, patronizes them, and takes them for granted. His view seems to be that because he puts up the "money," that's all that counts. He seems to feel that everyone is replaceable and that HE is doing all the employees a favor by providing them a job. He fails to understand, as you have correctly pointed out, the REAL value in a company are the people (employees).

A company is only doing someone a "favor" by hiring them if they are a really terrible employee. It's the COMPANY that is FORTUNATE to have a GOOD employee. If you treat your employees like you're always doing them a favor, all the really good people will leave and you're left with those who feel just having ANY job is the best they can hope for.

When I first started working with Michael, he told me he didn't have any close friends. All these years later, seeing how he treats people, I can see why.

Kevin

jbloodwo said...

back to posting with my Google account name

The feeling about Michale changed drastically after being at lindows/linspire. once i figured out that MP3.com was for MR like hitting 15 A,K straight at the black jack table and then getting as many spade royal flushes in the poker room. I thought he was a visionary like Steve Jobs. Instead i think he suffers from acute SJE (Steve Jobs Envy) syndrome. MR does have some good ideas however he is not willing to get out of the way and let people that know what they are doing make things work. I would love to work with most of the people from Linspire again. Kevin was cool although I did not interact much directly with him... and i felt the managment team was really trying to make the product work.
I recenty bout one of the Dell Mini 9 netbooks.... and i think dell has done what Linspire was trying... a preinstalled Linux that grandma can use without having the support department at her beck and call to help her get things working. And don't think i am knocking Linspire here I am not. we were close and I think we could have done what we needed to do to get there.
we lacked 2 things
1. the resources dell has to get thins functioning corectly.
2. A founder letting the skilled people to do their jobs and not throw random new ideas at them.

John said...

What a murky situation. I thought Freespire had real potential, so I was a bit disappointed to see it go down the pan like this :(

Out of interest what OS do you use Kevin? Do you have a Macbook? Vista? XP? Ubuntu? Or do you dual/triple boot? Just curious :)

-John

Kevin Carmony said...

John,

I mostly use my Mac Pro tower desktop and my Macbook Air when I travel. I also have a Ubuntu 8.04 PC which I enjoy for keeping an eye on the progress of Linux on the desktop. I use Parallels on my Mac running Vista for testing of our Dating DNA website on the Windows platform.

I'm looking forward to trying Ubuntu 8.10 in 12 days when it's released.

Kevin

Anonymous said...

kEVIN, THANKS FOR STAYING ON TOP OF THIS SITUATION,you are a man on integrity and i applaud that.I have purchased linspire 4.5,5.0 and have loved the OS.Im am so disappointed in what MR has done to use all.I thought in a few short years linspire was going to be the alternitive to windows. Maybe Bill Gates realized that and had xandros pull the plug on linspire thru the back door.maybe someone will revive linspire under a diff name we need compition for windows please keep us informed and God bless you. Dave Bozza