1. stumble says

    As a corporate attorney I can not imagine that any competent lawyer looked at this. Holding S Corp shares on behalf of a company… how tricking stupid can you get? It isn’t even a believable amount of nonsense.

    Heres the thing, S Corps are primarily used today to devalue the shares of a company in order to prevent the sale without all the current shareholders involvement. In other words a S Corp structure is principally used to PREVENT the sale of the company to 3rd parties without the consent of the other shareholders. Because of this exact situation.

    Snopes may have all sorts of internal issues, but the buyers here were absolutely imbecilic. Had I been the buyers attorney there would have been multiple letters telling them not to do this deal, with exactly this possibility spelled out. Then I would have had all of them sign letters indicating they were advised NOT to do this deal this way, because of the legal malpractice claims that should be following very shortly.

  2. Timberwoof says

    “Mikkelson claims Proper was never supposed to handle the hosting of Snopes:”

    Notably, the GSA did not require or enable Proper Media to host the website or to control its hosting. Rather, the GSA provides that “[Proper Media] shall consolidate [Bardav’s] existing server configuration to use load-balanced Linux servers paired with a MySQL database server and a content delivery network[,]” without granting Proper Media ownership or control over those servers. At all relevant times, the decision of how and where to host the website remained within Bardav’s sole ultimate discretion.

    So except for the minor detail of being hired to actually do all the technical stuff involved in handling the hosting of Snopes, Proper was never supposed to handle the hosting of Snopes. Got it.

    The best outcome now would be that Snopes content is handled by people not directly involved in this interpersonal nastiness. The Sopes detractors are rubbing their hands with glee as they hold Snopes to a much higher standard than they hold their own political heroes.

  3. says

    A lot of businesses fall apart because of this sort of thing. It’s sad – it’s why “good fences make good neighbors” – and good advisors make sure the fences are all right and proper. Unfortunately my experience of going into business seems to teach that good intentions count for nothing.

  4. astro says

    snopes’ gofundme statement is misleading at best, but honestly, the situation isn’t so complicated. or more precisely, unusually complicated.

    lots of corporations use special tricks to prevent hostile control by outsiders. the mikkelsons’ s-corp trick was probably motivated by tax issues, but the control issue probably mattered too. VCs don’t like corp structures that restrict membership/ownership to natural persons, but other than that, they love complex corporate structures.

    lots of tech companies see employees slip between vendors, subsidiaries, the company, and related businesses. especially in california, where non-compete agreements are difficult or impossible to enforce.

    lots of IT people create special roadblocks, kill switches, or other controls to ensure that they, and only they, have access to company data (it’s often illegal, but also often hard to police).

    there really isn’t anything profoundly complicated here. or complicated at all, really, if you distill down the various parties’ interests and disputes. the only real question in my mind, is whether david mikkelson ghost-wrote that article. it’s such a slanted, biased telling of the story.