Gibson and Opcode
Here's the real story. Among my sources is San Francisco Superior Court case #304551.|
When Gibson bought Opcode in May 1998, Opcode was on the brink of insolvency. Opcode projected that it would become profitable again, to such an extent that the acquisition agreement provided for a retroactive increase in the purchase price, if certain performance targets were met (an "earnout").
By December 1998, Opcode was losing more money than anticipated, and Gibson was displeased with having to finance the losses. Opcode's president, Chris Halaby, proposed a spinoff venture, Zero Crossing. Gibson would fund the venture and allow it to take source code, in exchange for being allowed to restructure Opcode and eliminate the earnout. Halaby and Gibson signed a letter of intent in January 1999.
Halaby announced to Opcode that he would be leaving to form Zero Crossing, contingent, of course, on the successful completion of the spinoff agreement. Gibson told him and his engineers to proceed as if the spinoff were happening.
The negotiations dragged on for 5 months. During this time, Opcode began restructuring to become more assimilated into Gibson. The decisions to sell Vision for $70 on the web, recycle Overture 2.03 as Fermata, and stop Vision development beyond 4.5 were made. Halaby continued work on the spinoff. The spinoff negotiations were terminated by Gibson in June.
Halaby tried to reassert his position as Opcode's president. Gibson sued him for doing so, claiming that he had resigned. Gibson also sued the engineers who had been working for Halaby, alleging that they were misappropriating Opcode source code (when in fact they returned everything within a week of the termination of the negotiations). The engineers were dropped from the lawsuit after a few weeks.
Halaby has counter-sued Gibson.
Opcode's board of directors consists of 4 members: Henry Juszkiewicz (Gibson's CEO), another Gibson director, Dave Oppenheim and Chris Halaby. The corporate bylaws say that in the event of deadlock, the status quo prevails. Halaby wished to resume his duties as Opcode's president. Gibson did not want him there. Gibson says Halaby abdicated his position; Halaby says he did so contingent on the successful consummation of the letter of intent.
Gibson has tried to get Halaby and Oppenheim to agree to the appointment of a fifth director, in order to break the deadlock. Halaby and Oppenheim recognize that a fifth director of Gibson's choosing would almost certainly result in their dismissal from the board and from their positions of employment. Gibson is now attempting, in court, to have a fifth director appointed, but this director would be impartial, theoretically.
In late September, Gibson stopped subsidizing Opcode's operations. Opcode was forced to lay off the majority of its staff. Most of those that remained have since given notice or departed, including Doug White, who became General Manager when Halaby left for Zero Crossing.
If Henry really cared about Opcode, I do not believe he would have let these events transpire. Much damage has been done to Opcode's credibility, reputation and its real and perceived future ability to support its customers. Gibson either does not care, or does not understand that much of software's perceived value is the manufacturer's ability to provide service and continued development.
Gibson, as 100% shareholder, will ultimately win control of Opcode, but there is very little left to control. There are three possible futures.
1. Gibson tries to assemble a new development team and revive Vision. I do not think they will succeed if they try. Maybe I am just biased because my advice to anyone considering working for Gibson or any of its subsidiaries is to RUN AWAY! Gibson's actions have illustrated how the company values its intellectual property far more than the individuals who create it.
2. Gibson sells Vision to another company. I think Henry will not allow the possibility of someone else making a success out of something for which he has very little to show right now. As long as he doesn't sell, he can cling to the hope that he can someday get something out of his investment. There's also the cynical view that says, he sees software as something to kill because it is something people buy other than guitars.
3. Gibson adds Vision to its museum of antique technology, along with Steinberger guitars, Oberheim and who knows what else.
Because possible futures #1 and #2 are not realistic, in my opinion, unfortunately, I believe that #3 is the most likely outcome. Vision's survival is really only possible in the hands of a different company, and Gibson isn't likely to sell it any time soon.
Update, November 26, 1999
The court has added a fifth, impartial director.
There was a board meeting with the fifth director. Despite Chris Halaby and Dave Oppenheim having employment contracts, and new director's concern that those contracts should be scrutinized before making decisions, Henry Juszkiewicz has decided to remove Halaby and Oppenheim from the payroll. Any hope of Vision somehow continuing at Opcode because of Dave Oppenheim's continued presence now seems futile.
On the bright side, Dave Oppenheim is probably no longer bound by any non-compete clause that contract may have contained.
Doug Wyatt, one of Opcode's first programmers and the creator of OMS and Galaxy, has started a petition to ask Gibson to make OMS open source (like Linux).
Other companies have inquired about purchasing Vision from Gibson/Opcode, but Gibson seems to be holding out for more money. I wonder if he realizes that the longer he delays, the less valuable the source code becomes.
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