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Publish Date : 11/15/2004 7:20:00 PM Source : Business News Onlypunjab.com
As of midnight on November 11th Lightningstrike Publishing has officially dissolved as a business, primarily due to a two year financial battle with Canadian bank CIBC.
The closure comes after the break down of negotiations between Lightningstrike and Nordon Collection Networks, who are representing the CIBC. The problem arises from a two year dispute involving a 2002 business investment between the small Canadian publisher, and one of the big five banks of Canada. Lightningstrike launched its successful comic book line, SMASH! Comics, in 2002 with a funding loan from Bizsmart Inc. Nine months after its launch, and six months after funding SMASH! Comics Bizsmart, a subsidiary of CIBC, folded and went bankrupt. When Bizsmart went bankrupt the company’s final act was to demand all payment in full on any outstanding balances that did not meet the re-financing terms set forth by CIBC. Because a small press comic book label was considered by the bank to be very high risk, Lightningstrike was immediately declined for re-financing.
When Lightningstrike was unable to pay the outstanding balance to CIBC immediately and in full, the matter was quickly handed over to collection agency after collection agency, each one continuing to inflate the balance payable. Things came to a head when CIBC enlisted the services of the Nordon Collection Network in summer of 2004. Negotiations broke down between Nordon and Lightningstrike when the collection agency refused to deal with an outside member willing to grant Lightningstrike a private loan to cover the debts, or to accept monthly payments on the balance from Lightningstrike. Nordon’s stance was based on a huge misunderstanding of the comic book industry. Agents from the collection agency repeatedly stated that a small press comic company with a website should easily be able to generate the balance of $10,000 of disposable profit within 30 days.
Faced with Nordon’s unwillingness to deal and unrealistic view of the comic industry Lightningstrike owner Mike Gagnon was faced with a tough decision.
“It all boils down to greed…” Said Gagnon, he added; “…I’d rather make the choice to step out of business myself than be forced out of business by a greedy corporation.” Although Lightningstrike has never gone bankrupt they are now using the services of a financial trustee to resolve any and all outstanding debts with creditors, which includes the CIBC. Several highly publicized projects, studios, and subsidiaries of Lightningstrike, including SMASH! Comics, have already begun to find new homes and will be showing up again in the near future.
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