ATTN: Ken and Everyone! New news on Walter Forbes

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    • #25606 Reply
      Unknown,Unknown
      Participant

      I don’t want to spark any animosity or anything…or bring any bad
      memories back to you, Ken, but I was reading some business news and
      came across Walter Forbes. (read the bottom of this message if you
      don’t know who Walter is)…

      ——————————————————

      This is a direct quote from CNN-Money.com:

      Cendant scam case ends in mistrial

      Jury can’t agree for second time whether ex-chairman of firm
      that owns Avis, Orbitz and Century 21 committed accounting fraud.

      February 9, 2006: 3:29 PM EST

      NEW YORK
      (Reuters) – The accounting fraud trial of former Cendant Corp. chairman Walter
      Forbes ended in a second mistrial, and federal prosecutors have yet to decide
      whether to retry him, a spokesman for the U.S. Attorney’s office said Thursday.’  At this time, we are considering our
      options,’ said Michael Drewniak, a spokesman for the U.S. Attorney for the
      District of New Jersey.  U.S. District
      Judge Alvin Thompson in Hartford,
      Connecticut
      , dismissed the
      jurors, who did not reach a verdict after deliberating for nearly a month on
      the securities fraud and conspiracy charges Forbes faced.  An attorney for Forbes could not immediately
      be reached for comment.  New York-based Cendant
      (up $0.58 to $16.54, Research)
      owns the Avis car rental business, online travel agency Orbitz and the Century
      21 real estate business.  Last year,
      former Cendant Vice Chairman Kirk Shelton was convicted and sentenced to 10
      years in prison for his role in a $500 million accounting fraud at one of
      Cendant’s predecessor companies, CUC International.  At that same trial, a mistrial was declared
      in the case of Forbes.  The scandal led
      to a settlement with Cendant investors worth $2.85 billion.  Since then, Cendant has reorganized
      operations and shed noncore units.

      END QUOTE

      http://money.cnn.com/2006/02/09/news/companies/cendant.reut/index.htm

      ——————————————————-

      In case you are not familiar, Walter caused alot of problems with
      Sierra (sort of) when he was caught lying about the amount of money his
      company, CUC (later renamed Cendant) made.  He was basically
      commiting many crimes of fraud. This led to Cendant’s downfall and a
      force to sell Sierra to Vivendi. I don’t know all of the details, and
      Ken may be able to fill in on some of the holes, BUT, from what I know,
      this catastrophie was one of the main plugs that caused Ken to loose
      control of Sierra, for Cendant sold Sierra to Vivendi, and the rest is
      history…

      This has been big since, I guess 1997, because Cendant ran (and still
      runs) many businesses. I thought it was interesting and thought I’d let
      everyone here know. I think Ken mentioned once that the Sierra (to CUC)
      sale happened only a year or so before all of this was uncovered, talk
      about bad timing…if I’m not mistaken, this may have been the single
      biggest case of fraud only surpassed by the infamous Enron scandal.

      Can you fill us in on some of this Ken? Have you heard of this ‘latest’
      news story? What was this like when you heard the news of the fraud?
      You were lied to about the credibility of CUC, right? I mean, this must
      have been huge! Did you have any input on the cendant sale of Sierra to
      Vivendi? Any information would be great…but I don’t want to stress
      you out! Thanks!

      BC

    • #25607 Reply
      Unknown,Unknown
      Participant

      I’m commented on this a few times over the years.

      For those who don’t know the story, here’s the quick version:

      • Sierra was a public company
      • Walter Forbes, of CUC, joined our board around 1992. At the time, Sierra was launching its TSN online gaming network, and I wanted a board member with communications industry and subscription management experience and contacts. Walter was a friend of one of our existing board members
      • Walter was a great board member, and a very creative, intelligent person. He doesn’t get the credit he deserves, but he was the father of modern online shopping
      • In 1996, Walter surprised me after a board meeting, by asking if Sierra could be acquired
      • At the time, Sierra was not for sale. We were doing extremely well, but as a public company, we had to listen.
      • CUC wanted to acquire several game industry companies and combine them into a mega-company. Companies like Lucasarts, Broderbund, Davidson (Blizzard) and others were discussed. This sounded good, because I felt there was an opportunity to create an unbeatable company with worldwide distribution.
      • On the other hand, CUC was discussing having Bob Davidson, of Davidson software (an educational software company) run the consolidated company. I had major reservations about this. Bob was a ‘big company’ guy and very conservative. I couldn’t imagine Bob managing Sierra’s highly creative development organization, or marketing some of our more controversial products; such as Leisure-Suit Larry and Phantasmagoria. On the other hand, Bob had Blizzard, which were doing well, so there was some indication that it could work
      • CUC was offering a price well above Sierra’s current stock trading price. To an extent the decision was out of my hands. As the CEO of a public company, I had an obligation to do what shareholders wanted. That said, I felt there was a risk in the transaction that Sierra could be ruined by becoming part of a larger entity, especially one run by Bob Davidson.
      • Based on my concerns that Sierra would fail if run by Davidson, I declined the acquisition offer. This resulted in CUC negotiating a post-deal working relationship that would keep Sierra’s development group independent of Davidson. There was a software board created, which consisted of Kirk Shelton (of CUC), Bob Davidson and myself. It was specifically agreed that Sierra’s development group would NOT be managed by Davidson.
      • Immediately after acquisition, it became obvious that things weren’t going to work. Plenty of finger-pointing ensued. It was clear that the ‘software board’ was never going to meet, and that neither Davidson nor CUC had an intention of working within the framework that had been completed.
      • I do not blame Bob Davidson. We have never spoken about what occured, but there are indications that he and I were told different stories about how the software division would be managed post acquisition.
      • One of my sayings is that ‘A ship should only have one captain’. Bob and I were trying to co-exist within one software company, and it wasn’t working. I felt betrayed by CUC, but wasn’t ready for retirement, and it was too painful to watch Sierra being destroyed. I thought Sierra’s best chance for survival was to end the adversarial relationship between CUC, Davidson and myself.
      • I asked Walter Forbes if there was something else within the company that I could do. At the time, CUC was heavily involved in shopping by telephone. They had a membership club which provided discount merchandise that was ordered over the phone, and wanted to transform this business to online shopping. I split off a group of developers from Sierra and started running a group known as NetMarket. We had a great run of success at NetMarket, and built a great online shopping service.
      • Meanwhile, Sierra was struggling. Davidson and CUC also weren’t getting along, and Davidson soon resigned.
      • I felt that the smart move would have been to put me in charge of the software business, and was confused when I wasn’t asked. Instead CUC moved one of their corporate vice presidents, with no experience in software, into the leadership position, and I left the company completely.
      • Soon after these events, CUC itself was merged with another company, and it was discovered that CUC had been ‘cooking its books’ dating back to several years prior to acquiring Sierra.
      • CUC’s stock value collapsed, and its senior officers were charged as criminals.
      • Kirk Shelton was sentenced to 10 years in jail.
      • Walter Forbes has been tried criminally twice, and escaped prosecution on both occasions. Both have continued to maintain their innocence.
      • I am frequently asked whether I believe that Walter and Kirk are crooks. I honestly have no idea. In Sierra board meetings, and during the brief period I was on CUC’s board, I never saw anything suspicious, other than their dishonorable dealings with Sierra and Davidson.
      • Two juries have heard far more evidence than I had access to, and neither found enough evidence to convict Walter. So, perhaps he is innocent. I wish it were more definitive than this. A lot of people (1,000 Sierra employees) were hurt horribly by what occurred. Thousands of others who would have someday worked for Sierra will never work there. A brand name that once was amongst the finest in the world, now means little. Games that would have existed will now never be created. Thousands of lives were ruined. Those who were guilty should be hunted down and prosecuted to the fullest extent of the law.

      I hope that someday, someone will write a book about CUC. I’m as curious as everyone else to learn what happened.

      -Ken W

    • #25608 Reply
      Unknown,Unknown
      Participant

      Hey Ken,

      I lost my second post in Safari 2.0.3 on Mac OS X 10.4.5 (it keeps showing up blank!) so I’ve switched to Firefox 1.5.

      The main point of my post was that I know millions of people were impacted by Sierra, probably hundreds of thousands significantly, and we’re all glad that we that time in our lives.  I mean, I like Pepsi, but without it in my life, things wouldn’t be -that- different.  Without Sierra, I would probably be somewhere else completely.

    • #25609 Reply
      Unknown,Unknown
      Participant

      That’s really interesting, Ken…thanks for the fill-in.

      I HAVE to ask one more thing…you dropped out of the CUC board and left before the HFS/Cendant merger and subsequent fraud unveiling, right? Do you know what prompted Cendant to sell off their software devision? Was it the simple fact that, because they were caught and loosing lots of money, if they sold Sierra (again) off to Vivendi Sierra might…if even only by name, survive? Did Cendant tell you or ask for your advice when they saw that they may have to sell Sierra off to Vivendi/Havas?

      Sorry if I’m overly bugging you…but this is really interesting to me…I try to imagine what would have happened if Cendant was able to keep Sierra, would they have re-grown the software business, or would it have kept running into the ground?

      History, even the ‘bad’ or ‘dark’ stuff is still, in my opinion, interesting to hear. Although Sierra is ‘still’ just a copyright, one never knows what Vivendi may have in store for it…until then…

      Thanks again, Ken,
      BC

    • #25610 Reply
      Unknown,Unknown
      Participant

      ‘I felt that the smart move would have been to put me in charge of the software business, and was confused when I wasn’t asked. Instead CUC moved one of their corporate vice presidents, with no experience in software, into the leadership position, and I left the company completely. ‘

      So then your decision of leaving was based entirely on the move to put an inexperienced person in charge of software?  I would not blame you if that was the case.

    • #25611 Reply
      Unknown,Unknown
      Participant

      I do not know why Cendant sold off Sierra. I was not consulted then, and have not been consulted since – with respect to anything.

      About 3 or 4 years ago, I made a decision to drop back in, and help Vivendi Universal get the business back on track. I wrote to their CEO and tried to meet. I’ll see if I can find the message I sent, and post it here. They responded by inviting me to visit their corporate headquarters for a meeting. I wrote back and said that I live in Mexico, and needed to do it as a conference call. They responded that if I didn’t want to fly to LA, at my own expense, the meeting was off. They could not be convinced to speak to me by phone.

      I wanted no money. My sole goal was to help get Sierra back on top of the industry. It’s certainly possible that they are mad at me for some reason I’m unaware of — but, I don’t think that is it. I think its nothing more than that they are a big company, and they think like big companies. Anything out of the box doesn’t fit their mold. I keep thinking someday one of their corporate folk will read this board and call me. If it ever actually occurs, I’ll post a message here.

      You may have noticed that they did a Leisure Suit Larry without involving Al Lowe. They have never contacted Roberta to speak about Kings Quest or Phantasmagoria.

      Don’t ask me to explain this type of behaviour…

      -Ken W

      PS I just re-read my response, and it sounds like ‘sour grapes’. My apologies for that, but this really is a case where criminal conduct was involved. Perhaps, not with respect to Sierra, although Sierra’s shareholders were amongst those who were harmed by CUC’s criminal actions. And, as I’ve said before, a lot of people I really care about were badly hurt, and a brand name I spent most of my life building was allowed to die. If that doesn’t justify some sour grapes, what does?

      Quote:

      young old gamer, 2006-02-27 14:41:37

      That’s really interesting, Ken…thanks for the fill-in.

      I HAVE to ask one more thing…you dropped out of the CUC board and left before the HFS/Cendant merger and subsequent fraud unveiling, right? Do you know what prompted Cendant to sell off their software devision? Was it the simple fact that, because they were caught and loosing lots of money, if they sold Sierra (again) off to Vivendi Sierra might…if even only by name, survive? Did Cendant tell you or ask for your advice when they saw that they may have to sell Sierra off to Vivendi/Havas?

      Sorry if I’m overly bugging you…but this is really interesting to me…I try to imagine what would have happened if Cendant was able to keep Sierra, would they have re-grown the software business, or would it have kept running into the ground?

      History, even the ‘bad’ or ‘dark’ stuff is still, in my opinion, interesting to hear. Although Sierra is ‘still’ just a copyright, one never knows what Vivendi may have in store for it…until then…

      Thanks again, Ken,
      BC

    • #25612 Reply
      Unknown,Unknown
      Participant

      Patrick:

      I wouldn’t say that my decision to leave was 100% due to what was happening in the software business, but it was certainly a major ‘straw on the camels back’. There were other factors: 1) Running Sierra was a 16 hours a day, 7 days a week, job for nearly 20 years. I needed some time off. 2) My NetMarket spin-off group had produced a product that was being slowly taken over by corporate. It was going from being a small R&D project to a strategic effort for the company. My ability to work fast and be creative was being impeded as the project was gaining visibility within the company. And, 3) I had a meeting with Kirk and Walter towards the end, to discuss strategic moves I thought CUC should be making in the shopping space. I had hoped there was a way I could have a material impact on CUC’s shopping business, but the pace large companies move at is way different than the culture I had created at Sierra. It was apparent that I was a fish out of water, and it was time to move on. Sierra wasn’t a small company. We had nearly 1,000 employees — but, CUC had many times this, and an ingrained way of doing things. I tend to move at internet speed, and that doesn’t always work in a large company.

      -Ken W

      Quote:

      B, Patrick, 2006-02-27 16:15:59

      ‘I felt that the smart move would have been to put me in charge of the software business, and was confused when I wasn’t asked. Instead CUC moved one of their corporate vice presidents, with no experience in software, into the leadership position, and I left the company completely. ‘

      So then your decision of leaving was based entirely on the move to put an inexperienced person in charge of software?  I would not blame you if that was the case….

    • #25613 Reply
      Unknown,Unknown
      Participant

      Wow. Every time I hear any news about the tragedy I haven’t heard before, it really makes me sad. 🙁

      I think I understand Vivendi’s ‘peculiar behavior’ in terms of
      big-business thinking. The bigger a company gets, the less close-knit
      it becomes and it’s hard for corporate executives to believe that
      someone just wants to ‘help out’ or do anything for the good of the
      company without personal gain. In fact, I wouldn’t be surprised if it
      draws a little bit of suspicion.

      While Ken may genuinely want to help and asks for no money, Vivendi by
      natural instinct has to be cautious and assume the worst — an
      infiltration? a hostile takeover? access to something? — it’s
      terrible, but it’s true.

      I used to work for a movie theater company that started out small in
      the 90s and is now one of the largest chains after being bought, sold,
      split, merged and chopped over the years. With every change came a
      sweeping reform in policies, shuffling of staff, reorganizing of
      locations, etc. Whenever a different person was put in charge, the
      company lost a little more of its ‘soul.’ Much like CUC placing someone
      with no software knowledge in charge of Sierra, most of the people in
      charge of that theater company are real estate, communications, or
      travel executives. Hardly any real theater experience.

      That said, Ken you are a remarkable person, and I think your modesty
      and care towards the people that surround you make all of your
      accomplishments far greater than they would be on their own. One day,
      I’ll sit down and write the letter I’ve been meaning to write since 7th
      grade. Back then, I had to submit an essay about a ‘famous person whose
      shoes you’d like to fill’ and I wrote about Ken Williams. Which is why
      when you said, ‘A lot of people (1,000 Sierra employees) were hurt
      horribly by what
      occurred. Thousands of others who would have someday worked for Sierra
      will never work there.

      A brand name that once was amongst the finest in
      the world, now means little. Games that would have existed will now
      never be created. Thousands of lives were ruined.’ a piece of me died.
      But you’ve made the trail, and maybe if I make enough money selling off
      my Sierra collection, I’ll blaze that trail and start the SECOND
      greatest adventure game company that ever lived. 😉

      Take care!

      -Tom.

    • #25614 Reply
      Unknown,Unknown
      Participant

      Here’s some fun… I mentioned earlier on this thread that I contacted Sierra a few years back, to see if I could help, and they never took me up on it. I said I would post the old emails if I found them. I FOUND THEM!

      Here’s one from 2001: (sent to a gentleman in France who was CEO of Vivendi Software at the time)

      —–Original Message—–

      From: Ken Williams [

      mailto:kenw@seanet.com]

      Sent: Thursday, March 15, 2001 2:35 PM

      I founded Sierra and ran it for 18 years, including 8 as a public company, during which we grew consistently and profitably. I’m happily retired, and doubt that I will ever want to, or need to, work again.

      I keep hearing mixed reports on how Sierra is doing, and just heard that Greno is leaving the company. My only interest in contacting you is to see if there is anything I can do to help (which I doubt). If you ever want someone to bounce ideas with about Sierra, or to have someone who can play devils advocate in setting product strategy, call me. I’m not looking for compensation. My only interest or goal is that I would like to see Sierra returned to its former dominance.

      Merci d’avance,

      Ken Williams

      —————————-

      I received no response, so I tried again in 2004, with the next regieme: (this was sent to a senior VP who had worked for me at Sierra, and who passed it on to Vivendi’s CEO — who never called returned a call)

      It was very good to speak with you. Please accept my deepest apologies for having disappeared for so long. After nearly 20 years of building games, I had burnt out on the industry and made a decision to focus my attentions elsewhere. Also, I knew that the new owners would have a different vision than I for the future of the games business, and that to watch what they were doing would be very frustrating. It would be like watching someone else raise your child, something which would be impossible for me. It was better to not think about it. As I mentioned, I have not purchased a computer, or video game, of any sort during the last seven years, nor kept up with the industry in any way. 99% of my life has been focused on golf, and on a small non-game programming project I’ve been doing (more of a hobby than a product – I just wanted to keep my technical skills up to date).

      Here’s why I called:

      Sierra, during my 17 year tenure, grew 25-50% per year, every year, and consistently turned in 15-30% pretax earnings. We consistently had titles in the top 10, and dominated the retail shelves. Recently, I was sent a press clipping by someone talking about poor financial performance at VU Games, and that people at Blizzard were leaving. I have no idea how true any of this is, but can sense, even without monitoring the industry, that Sierra (and Blizzard) have less momentum today than when I left the company.

      I would like to help, if I can. I am not seeking, nor would I accept, a job. I am not seeking a way to make money. I have money. What I am seeking is two things: 1) Retirement gets old after a while. I’d welcome some intellectual stimulation. And, 2) I have nearly 20 years of my life wrapped up in Sierra. Standing by and letting it die without offering to help isn’t my style.

      The question is ‘what could I do?’ If VU Games were a public company, I would ask to join its board. I do not see myself in any kind of operating role. I have no interest in living in Los Angeles and going to work everyday. One idea I’ve had is that I could be a ‘person to talk to’ for whoever is the CEO of the games business. We could try talking once per month via phone, just to discuss strategies. That person would be free to ignore me or listen, or even hang up. Perhaps nothing would come of it, or perhaps I would be able to kick in some decent ideas. Alternately, or, additionally, I might be able to play a role with the development teams and in forming product strategy. I have a good eye for when a product is in trouble. I also have a good mind for how to get a development project back on track. I’ve managed over one thousand software development projects, and a strong track record of bringing hits to the market. I have some specific ideas on how I could be effective in this area.

      My contact information is:

      Ken Williams

      US Cell phone (which finds me anywhere) +1-206-xxx-xxxx

    • #25615 Reply
      Unknown,Unknown
      Participant

      Ken,

      Looks like your buddy Walter Forbes will be doing 12 years in the clink. 

      http://money.cnn.com/2007/01/17/news/newsmakers/cendant_forbes.reut/index.htm
      http://www.usatoday.com/money/companies/management/2006-10-16-forbes-usat_x.htm?csp=34

      That dude sure left a path of destruction wherever he went.

    • #25616 Reply
      Unknown,Unknown
      Participant

      Hey Chris and Ken,

      Chris: thanks for posting that information about Forbes, I read the news on CNN recently and am glad to know that that whole case is finally finished.  Funny that, 10 years ago, that had a big impact on Sierra, interesting….

      Ken: Those letters are really interesting.  Too bad you haven’t heard back from them, but, then again, they have their ways of working. On a brighter note!! Vivendi Universal Games has sort of “reverse merged” their name into Sierra.  In other words, though Vivendi itself has not really changed, the “Sierra” name, logo, and the “Half Dome” Yosemite cliff are more-than-ever prevelant in all games VU is now churning out.  In addition, “Sierra Entertainment” as a name, now oversees quite a few other game studios. These game studios plus Blizzard (which is famous enough not to be put under the Sierra umbrella) make up, pretty much VU games.  I’m happy about that!

      Here are the current studios under the Sierra Entertainment name: Massive, Radical, Swordfish, and High Moon

      I’d be interested in hearing everyone’s opinions. Does anyone else have any new news concerning this?

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