Nov 12, 2014
Apr 26, 2014
In 2005 I was told that I needed to exercise a portion of my ePrize stock options due to some financial deal happening with the new Board of Directors. Being the good employee that I was, I checked to see what would be the optimal situation for my employers. Would it be better to exercise the minimum 25% or should I do more? The minimum was better for them so that's what I did. I sold 25% of my options and promptly forgot all about it until early 2006 when -- after having been fired a few weeks after the stock deal -- I got a call from Robb Lippitt telling me that there had been some kind of mix-up and that I would be required to pay taxes on my options.
I had $20,000 in options and owed ePrize $10,000. Having just been fired, I was in no financial situation to pay ePrize any money. The simple solution seemed that they should send me my $20,000 and I'd pay them out of that.
"Oh, no. That's not the way it works."
Not trusting the incredible Mr. Lippitt at all (after having been betrayed by ePrize), I told him that I needed all of the paperwork and proof of this transaction and amount due. I got this a few weeks later and was told that the money would stay in escrow until the taxes were paid off.
In 2007 I received a statement telling me that roughly $1,000 had been paid on the taxes out of the escrow interest on the base $20,000. The same thing happened in 2009, 2010, 2011. Each year I would get closer and closer to having that $10,000 in taxes paid off.
Things changed in 2012 when I got a statement not from ePrize but from "Crackerjack Holdings LLC" which stated that, instead of my base $20,000 that now I had $50,000 and still owed $8,000 in taxes... at least that's how I read it.
ePrize had been sold off at some point and it seemed that $50,000 was my pay out for the other 75% of my options (along with the original 25%, I assumed). It seemed that my options had depreciated significantly if 75% of them only netted $30,000 as opposed to the $20,000 that 25% of them netted in 2005. I could see why the former employees engaged in a lawsuit against ePrize were indignant.
I sent all of the paperwork to my accountant this year in hopes of getting things worked out. Alas, he was as confused as I was when he tried to sort everything out.
"You owe $8,000 on $50,000 that you haven't even seen yet? Is this some kind of Nigerian Prince scheme?"
I finally got in touch with someone at "Crackerjack Holdings LLC" who would take the five minutes to explain things to me.
No, I didn't owe $8,000. I didn't owe anything to anyone. At the same time, however, I wasn't owed anything. There was no money headed my way at all. No $50,000. No wonder my former co-workers were mad and this makes me even more upset that their lawsuit was dismissed.
What about the $20,000 I originally had in escrow somewhere? That has yet to be found. I talked to the lawyer who helped with the brokering of everything.
In related news, it's no big surprise that the "Crackerjack Holdings LLC" paperwork came from rbequity.com which is owned by Dan Gilbert, the same guy who bought out ePrize and the same guy who was on the board back in 2005 when this whole stock thing went down.
I came up in an era of the "dot bomb" when companies went boom or bust. I heard tales of those who owned Microsoft stock options becoming instant millionaires when the stock had it's IPO. I also heard that many options weren't worth the paper on which they were printed. I thought maybe ePrize's would fall somewhere between the two. For the years I worked at ePrize all I ever heard was how good the company was doing so when I made my peanuts but got options as holiday bonuses, I was okay.
"Some day," I thought, "this will all pay off."
The cold hard truth is that it didn't. The options ended up being both a carrot and a stick. I hope they find my original $20,000 somewhere because I really could use it. I'd like to know that somewhere along the line, my heard work and dedication paid off.
In hindsight, I should have sold 100% of those options back in 2005 so somewhere there'd be $100,000 that I'd owe $50,000 in taxes that couldn't be found instead.
I just heard from the lawyer in charge of the stock deal and found out that the original 25% that I sold, that $20,000 I thought I had coming to me, was devalued over the years and -- poof -- went away in 2012. After all these years it's rather a shock to find out that I'm not getting anything at all from either the original exercise of my options or the selling of the company. I don't know what would have happened had I paid that mysterious $10,000 in taxes that Robb Lippitt told me that I owed back in 2006. Would I have been paying taxes on something that I would never get?
To say that I'm upset right now doesn't even begin to touch how I'm feeling. Over the last few weeks I've had imagine sums snatched away from me, including one that's been in my head since 2006 as a nice little payday for all the hours I put in at ePrize. Now, it's all gone.
|Total Exercisable Options||120,000|
|Percentage of Options Exercised||100.00%|
|Number of Options Exercised||120,000|
|Percentage of Options Sold||25.00%|
|Number of Options Sold||30,000|
|Number of Options Rolled||90,000|
|Strike Price / Vested Option Exercised||0|
|Ordinary Income Recognized||64,309|
|Total Cash due at Closing (Pre W/H)||14,845|
|Cash Attrib. to Option Units||14,845|
|Cash Attrib. to Existing Units||0|
|W/H Calc'd on Cash Rec from Sale||$ 2,420|
|"Phantom" W/H Calc'd on Stock kept||$ 20,739|
|TOTAL TO BE W/H||$ 23,158|
|Net Pay Calc'd||$ (8,313)|
|Net Pay Actual (DD + 401k)||$ 2,227|
|Amount owed to ePrize||$ (10,540)|
Jan 17, 2014
Here's the full "Hello World" story from the Detroit Free Press.
And, I didn't publish this before but here's the scoop on the "frivolous lawsuit" and when it was dismissed: Crain's Detroit
I tried to get in on the suit but was told by the lawyer in charge that they weren't interested in including other plaintiffs at the time (probably because I have such an ax to grind about ePrize).
I'm still stuck with a big tax bill on a paltry amount of money from what probably should have been beaucoup bucks in stocks. Thanks, Josh, Dan, et al. Something tells me that you made out like bandits.
May 17, 2013
Shortly after being fired from ePrize I received a call from Robb Lippitt telling me that there was a screw up in the paperwork and that I had to pay taxes on my profits from the sale. 50% of the amount netted was due! Rather than paying, I've been allowing the interest from the amount in escrow.
Every year since then I've gotten a statement saying that I was just a little closer to paying off that insane tax bill and claiming the net of what I sold.
This year, however, I got a very strange email. Rather than my usual statement I got a cryptic email that talked about all of ePrize's stock being sold off and that I'd get a payout but that there could be another huge amount taken out in taxes.
I hadn't heard about ePrize being sold last August. Despite being a stock holder, I guess I don't need to know these things. According to Xconomy, "the company’s backers, including Quicken Loans' Dan Gilbert, scored a healthy return on their investments."
However, those healthy returns don't seem to be "trickling down" to those who hold stock options in the company. Instead, we seem to be getting the shit end of the stick. I just read that there's a lawsuit against ePrize by my fellow disgruntled employees.
According to Crains:
Suing are former ePrize Executive Vice President of Business Development Ivan Frank, former Senior Vice President of Production Jeffrey Dwoskin, former Senior Vice President of Product Development Phil Jacokes, former associate creative director James Brunk, former controller Blake Atler, former sales associate Matt Kovaleski, Roy Krauthammer and Frank's investment company, IJF Holdings LLC.
Most worked at ePrize more than four years ago, according to employment histories at LinkedIn. The lawsuit alleges they each owned shares of ePrize and received nothing for them in the sale, though the company allegedly issued recent Schedule K-1 statements to them for tax purposes, indicating they'd received a distribution from the sale.
The lawsuit seeks unspecified damages above $25,000, along with a full accounting of the sale transaction plus attorney fees and "recoupment of all sums ill-gotten" by ePrize and the other defendants.
Linkner and Hermelin said in a statement: "There is zero merit to the claims made by these former ePrize employees, most of whom are disgruntled about being terminated years ago. The sale of ePrize was completed according to the letter of the law. We intend to fight this frivolous suit with all available resources afforded under the law."
Meanwhile, Dan Gilbert doesn't seem to be taking the lawsuit well. In The Detroit Free Press he's quoted as saying:
"This is a just a frivolous lawsuit by disgruntled ex-employees who are trying to take a shot and hoping somebody writes a check to them and goes away," Gilbert said in an interview. "It's not going to happen because we never settle, ever, if we're right."
"I don't think it's news," he added. "Lawsuits get filed all the time."
I'm going to call on Monday to see if I can take part in this suit. Wish me luck.
Apr 1, 2011
I'm proud to announce that the ePrize: No Limits blog has been nominated for Best Cultural Blog by the Webby Awards (www.webbyawards.com). The official announcement comes out on April 12 but I wanted to let folks know now so they can spread the word when it comes to voting. I know that I've got a lot of enthusiastic readers here and that everyone loves the blog so be sure to vote early and often! In the past the Best Cultural Blog has gone to behemoth blogs like Mashable and 1000 Awesome Things. I know it's cliche but I'm just honored that ePrize: No Limits has been nominated! Thanks to everyone who nominated us!
Feb 18, 2011
Jan 18, 2011
Maybe you haven't been keeping up on current events but we just got our asses kicked, pal!
It's like Sweepstakes Express but smarter... I'm talking about the Wildfire Promotion Builder that looks and acts like Caffeine on caffeine. The best part? It's all about the Facebook, baby. This is a definite game-changer.
Okay, ePrize... what'cha got?
Aug 19, 2010
Thanks to a reader of the blog who tipped me off to the TruTV show, Hardcore Pawn. It stars none other than Ashley Gold who's known in some circles as Ashley Gold-Broad. As in Jordan Broad--as in his wife. Maybe Jordan will have a cameo on the show sometime. We can only hope.
May 13, 2010
Looks like our new ePrize CEO Matt Wise proved his namesake when he finally lowered the boom on ePrize EVP of Delivery, Jordan Broad, yesterday. This was one of a few firings and a couple of demotions yesterday -- all of them at the top of the house from where most of the company's problems stem.
I don't know what ePrize will do without Jordan. His input and work has been an invaluable part of the last decade at the company with all of the things he did such as... well... um... scoping out pictures of his female coworkers on FaceBook? And, um.... looking important in his office? And then there was this one time when... wait... what the hell did Jordan do for the last ten years at ePrize other than collect a fairly fat paycheck?
Keep up the good work, Matt. That was probably the best first step you could have taken.
Apr 8, 2010
This was pointed out to me today. The Qatar diplomat who just grounded a flight because he had to catch a smoke sure looks familiar...
Mar 11, 2010
ePrize is featured in an article about "cool companies" in metromode. Oddly, what metromode calls out as "cool" is what I found the most annoying at ePrize: "Multiple floors all done up in greens and purples, with a contemporary design and an open floor plan conducive to conversation and paper football.".
Despite rumors of a real management cleanup at ePrize, Jordan Broad is still listed as Executive Vice President, Delivery on the ePrize website. The title is as nebulous as the work he does.
Feb 8, 2010
Mirror mirror on the wall... is Josh Linkner the greatest CEO of all?
Josh, you are fair, 'tis true, but there is another fairer than you.
Today Josh Linkner announced officially that he's stepping down as the CEO of ePrize, LLC. His replacement, Matt Wise is coming in from Chicago's Q Interactive to take over the reigns. Though Josh will stay on as "chairman" -- focusing on innovation and sales -- it'll be interesting to see how he interacts with Wise. Will he chafe under Wise's "full operational control" or will he take a back seat? Or will he only he be a figurehead? The details of the deal Linkner made with the Board of Directors has yet to be revealed.
I find it very difficult to believe that Linkner went to the Board and humbly told them that the mirror told him he couldn't cut it as the CEO of the company he wanted ePrize to be. I find it much easier to swallow the the Board finally put an end to his rampant spending and maybe even curtailed the skirt-chasing.
Despite the claim that only one offer had been made for the CEO position, inside sources say that a big baller from the East Coast, George Russel, was the first person to whom the CEO offer was extended. Brian Hermelin (CEO of Active Aero in Belleville) and Gary Shiffman (CEO of Southfield-based Sun Communities) begged Russel to take the job. His response? "There's no value in trying to save this company." Zing!
Apparently, Wise must feel that there's still life in the old Purple, Red and Green monster. He'll be officially taking over on March 1st, the start of ePrize's eleventh year. Good luck, Matt, you'll need it!
Feb 2, 2010
The rumors have been confirmed, long time leader of ePrize, Josh Linkner, has been asked to step aside by the company's board of directors.
There has already been one offer made to a potential CEO (who subsequently turned down the position -- perhaps after scrutinizing just how poorly the company has been run in the last few years) and another set of negotiations ongoing with a new suitor.
With any luck, Josh will stick around until March 1, 2010 to see the eleventh anniversary of the company he founded before strapping on his golden parachute and taking a giant leap out of ePrize.
In related news, Ivan Frank recently turned in his resignation. This has been a long time coming. It was always a puzzler how Frank got into his position and maintained it for so long.
This only leaves Jordan Broad as the Questionable Employee of the Decade. Working with Broad never fails to leave people flailing to figure out just what he does at ePrize other than take up space.
More news to come.
Jan 30, 2010
At least at ePrize the upper management did their evaluations via emailed spreadsheets - not public boards. I mean, it's deplorable, just not as much so.
Oct 20, 2009
Big ups to Josh Linkner for being named the Detroit Executives Association's Executive of the Year.
In other news, the sinking ship of ePrize continues to bleed out talented employees into the Detroit market. The churn rate climbs with the Interface Developers taking a major loss recently of one of their longest-term developers.