3 Sep
1998
3 Sep
'98
8:10 p.m.
On 3 Sep 1998, Frank McConnell wrote:
Heh. Have you read _Once Upon a Time in ComputerLand_
by Jonathan
Littman (I think)? If not, you should.
At one point (before 1979) Bill Millard was pursuing an
income-sheltering scheme that involved selling IMS to a
south-of-the-border company that would liquidate it, then sell its
intellectual property to yet another company located on the Isle of
Jersey. Said third company would license the intellectual property
back to IMSAI Manufacturing Corp. which would make and sell computers.
IMSAI Manufacturing Corp. would pay a licensing fee; the third company
would pay Millard royalties.
I gathered this was never really completed, but Millard ended up going
to some effort in an attempt to put things back the way they were,
un-incorporating the old IMS Associates Inc. and IMSAI Manufacturing
Corp. to release the names, and incorporating new ones of each. Also
I thought that it was IMSAI Manufacturing Corp. that filed for
bankruptcy and presumably sold its assets to Fischer-Freitas. IMS
Associates was (I think) still the parent of both IMSAI Manufacturing
Corp. and ComputerLand.
In my reading of the book (which you so graciously let me
borrow...thanks...but I haven't been able to locate my own copy yet) I
recall that this is basically correct. Millard was on his way to
completing this strange incorporation in order to avoid paying corporate
taxes in the U.S. But the backing partners freaked out over it and
demanded he cease and desist because the way he was structuring it would
have made the backing partners' share of the company worthless (my memory
is getting a bit sketchy now about the details but that was the gist of
it). After this he started the ComputerLand chain concept, which began to
take off. He then spitefully let IMSAI run itself into the ground so he
could declare bankruptcy, maneuvering to absolve his obligation to the
backing partners of IMSAI (in a nutshell...it was carried out in a
non-obvious manner in an attempt to circumvent the backing partners'
onwership). However, there was one little note that threw a wrench into
his master plan that was later capitalized on in the subsequent trials
over ownership of ComputerLand. Basically the argument was that an
investment into IMSAI at some point legally went towards the financing of
ComputerLand, and therefore the US$6 billion ComputerLand empire was not
Millard's alone, but was shared by the initial backers in IMSAI, as well
as a principal of IMSAI who had purchased the note from the initial
backers and had been selling shares in the note to other people to support
his subsequent hair-brained schemes.
Its as complicated as it sounds. The book is a great read! Not written
all that competently, but a fascinating. An amazing tale of treachery and
deceit. Bill Millard was one of those crooked sons-a-bitches you wouldn't
want to buy an Apple from...sort of like my ex-boss.
Sam Alternate e-mail: dastar(a)siconic.com
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