Fri
Sep 18 2009 9:00am

Cory Doctorow’s Makers, Part 33 (of 81)

 

Illustration by Idiots’Books

Sammy skipped three consecutive Theme-Leaders’ meetings, despite increasingly desperate requests for his presence. The legal team was eating every spare moment he had, and he hadn’t been able to get audience research to get busy on his fatkins project. Now he was behind schedule—not surprising, given that he’d pulled his schedule out of his ass to shut up Wiener and co—and dealing with lawyers was making him crazy.

And to top it all off, the goddamned rides were back up and running.

So the last thing he wanted was a visit from Wiener.

“They’re suing us, you know. They raised venture capital to sue us, because we have such deep pockets. You know that, Sammy?”

“I know it, Wiener. People sue us all the time. Venture capitalists have deep pockets, too, you know—when we win, we’ll take them to the cleaners. Christ, why am I having this conversation with you? Don’t you have something productive to do? Is Tomorrowland so fucking perfect that you’ve come around to help me with my little projects?”

“Someone’s a little touchy today,” Wiener said, wagging a finger. “I just wanted to see if you wanted some help coming up with a strategy for getting out of this catastrophe, but since you mention it, I do have work I could be doing. I’ll see you at the next Theme-Leaders’ meeting, Sam. Missing three is grounds for disciplinary action, you know.”

Sammy sat back in his chair and looked coolly at Wiener. Threats now. Disciplinary action. He kept on his best poker face, looking past Wiener’s shoulder (a favorite trick for staring down adversaries—just don’t meet their eyes). In his peripheral vision, he saw Wiener wilt, look away and then turn and leave the room.

He waited until the door had shut, then slumped in his seat and put his face in his hands. God, and shit, and damn. How did it all go so crapola? How did he end up with a theme-area that was half-shut, record absenteeism, and even a goddamned union organizer just the day before, whom he’d had to have security remove. Florida laws being what they were, it was a rare organizer brave enough to try to come on an employer’s actual premises to do his dirty work, no one wanted a two-year rap without parole for criminal trespass and interference with trade. The kid had been young, about the same age as Death Waits and the castmembers, and had clearly been desperate to collect his bounty from SEIU. He’d gone hard, struggling and kicking, shouting slogans at the wide-eyed castmembers and few guests who watched him go away.

Having him taken away had given Sammy a sick feeling. They hadn’t had one of those vultures on the premises in three years, and never on Sammy’s turf.

What next, what next? How much worse could it get?

“Hi, Sammy.” Hackelberg wasn’t the head of the legal department, but he was as high up in the shadowy organization as Sammy ever hoped to meet. He was old and leathery, the way that natives to the Sunbelt could be. He loved to affect ice-cream suits and had even been known to carry a cane. When he was in casual conversation, he talked “normal”—like a Yankee newscaster. But the more serious he got, the deeper and thicker his drawl got. Sammy never once believed that this was accidental. Hackelberg was as premeditated as they came.

“I was just about to come over and see you,” Sammy lied. Whatever problem had brought Hackelberg down to his office, it would be better to seem as though he was already on top of it.

“I expect you were.” Were came out Wuh—when the drawl got that far into the swamps that quickly, disaster was on the horizon. Hackelberg let the phrase hang there.

Sammy sweated. He was good at this game, but Hackelberg was better. Entertainment lawyers were like fucking vampires, evil embodied. He looked down at his desk.

“Sammy. They’re coming back after us—” They-ah comin’ back aft-ah us. “Those ride people. They did what we thought they’d do, incorporating into a single entity that we can sue once and kill for good, but then they did something else. Do you know what they did, Sammy?”

Sammy nodded. “They’re countersuing. We knew they’d do that, right?”

“We didn’t expect they’d raise a war-chest like the one they’ve pulled together. They have a business-plan built around suing us for the next fifteen years, Sammy. They’re practically ready to float an IPO. Have you seen this?” He handed Sammy a hardcopy of a chic little investment newsletter that was so expensive to subscribe to that he’d suspected until now that it might just be a rumor.

HOW DO YOU GET RID(E) OF A BILLION?

The Kodacell experiment recognized one fundamental truth: it’s easy to turn ten thousand into two hundred thousand, but much harder to turn ten million into two hundred million. Scaling an investment up to gigascale is so hard, it’s nearly impossible.

But a new paradigm in investment that’s unfolding around us that might actually solve the problem: venture-financed litigation. Twenty or thirty million sunk into litigation can bankrupt a twenty billion-dollar firm, transferring to the investors whatever assets remain after legal fees.

It sounds crazy, and only time will tell whether it proves to be sustainable. But the founder of the strategy, Landon Kettlewell, has struck gold for his investors more than once—witness the legendary rise and fall of Kodacell, the entity that emerged from the merger of Kodak and Duracell. Investors in the first two rounds and the IPO on Kodacell brought home 30X returns in three years (of course, investors who stayed in too long came away with nothing).

Meanwhile, Kettlewell’s bid to take down Disney Parks looks good—the legal analysis of the vexatious litigation and unfair competition charges have legal scholars arguing and adding up the zeros. Most damning is the number of former Disney Parks employees (or “castmembers” in the treacly dialect of the Magic Kingdom) who’ve posted information about the company’s long-term plan to sabotage Kettlewell’s clients.

Likewise fascinating is the question of whether the jury will be able to distinguish between Disney Parks, whose corporate citizenship is actually pretty good, from Disney Products, whose record has been tainted by a string of disastrous child-labor, safety, and design flaws (astute readers will be thinking of the “flammable pajamas” flap of last year, and CEO Robert Montague’s memorable words, “Parents who can’t keep their kids away from matches have no business complaining about our irresponsibility”). Punitive jury awards are a wild-card in this kind of litigation, but given the trends in recent years, things look bad for Disney Parks.

Bottom line: should your portfolio include a litigation-investment component? Yes, unequivocally. While risky and slow to mature, litigation-investments promise a staggering return on investment not seen in decades. A million or two carefully placed with the right litigation fund could pay off enough to make it all worthwhile. This is creative destruction at its finest: the old dinosaurs like Disney Parks are like rich seams of locked-away capital begging to be liquidated and put to work at nimbler firms.

How can you tell if you’ve got the right fund? Come back next week, when we’ll have a Q&A with a litigation specialist at Credit Suisse/First Boston.

<<< Back to Part 32

Continue to Part 34>>>

  

 

 

As part of the ongoing project of crafting Tor.com’s electronic edition of Makers, the author would like for readers to chime in with their favorite booksellers and stories about them in the comments sections for each piece of Makers, for consideration as a possible addition to a future edition of the novel.


Doctorow’s Makers will be released in print by Tor Books in October. You can read all previous installments of Makers on Tor.com on our index page.

7 comments
Marcus W
1. toryx
What goes around comes around, Sammy.
Craig Moynes
2. retinaburn
I am really enjoying the change in forms of story telling within the novel. The Freddie articles, the investment newsletter, etc.
Onions
3. Onions
This one made me giddy with glee. I love reading about Sammy.
Onions
4. Overwatch
What's frightening is how utterly PLAUSIBLE that pamphlet is. This story is quickly shaping up to be my favorite of Cory's novels. And now I have to wait until Monday for the next part...

Hurry up, November.
Onions
5. Leon Wolfeson
To some degree it's allready happening. Certain companies which are little more than patent trolls have been bankrolled by venture capital... not least SCO.
Onions
6. kerobaros
'But a new paradigm in investment that’s unfolding around us that might actually solve the problem: venture-financed litigation. '

Either the second 'that' should be removed, or a 'there is' should be added in the middle of 'But a...'.

Cory, you are awesome.
Ethan Glasser-Camp
7. glasserc
What I love about this is how even Sammy is sabotaged by the "parasites and bullies and middlemen" that haunted Perry in the other chapter.

Ethan

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