San Jose Mercury News: U.S. judge opens trial in Nvidia suit to reporters

[Jawed]

http://www.mercurynews.com/business/ci_5500085

Before my time this, but I guess it might interest someone round here.

Jawed

 

[Rys]

Be interesting to see what comes out of the trial in terms of what they tried to stop disclosure of. My best guess is that it isn't about money, rather about IP.

 

[John Reynolds]

We believe the company and its assets were worth only $14m but we paid $70m for them. I'm no legal scholar, but that sounds like a tough sell to make to the court. Yes, there's value in removing your once-primary competitor from the market, but that's still quite a difference. Be interesting to see how this pans out.

 

[Dave Baumann]

I wonder if this actually centers on the multitexturing lawsuit that 3dfx had ongoing before they had to fold.

 

[Silent_Buddha]

Actually it states that the creditors are saying that 3dfx was worth more than 70 million. How much more isn't stated in that brief news blurb.

Nvidia is countering by saying 3dfx was only worth 14 million after they purchased them.

I'd imagine that at the time Nvidia paid a premium in order to remove their chief rival from the scene. However 14 million appears to be too low. That would be like saying they decided that losing 56 million was worth removing a rival that was about to go bankrupt and had no virtually no value on the market. Or in other words 3dfx was about to go out of business on their own but it was worth 56 million to accelerate the process.

I'd imagine the creditors are trying to make the argument that 3dfx's fabs (manufacturing plants aquired from STB) and combined IP from 3dfx and Gigapixel were worth more than 70 million.

Regards,
SB

 

[geekcomputing]

the lawsuit you are talking about is the Trusties lawsuit.

I'd have to go look at my notes but i believe 3 other lawsuits are involved in this case.

At the start it was the landlord of 3dfx vs 3dfx.. to which 3dfx claimed bankruptcy.

Then the trustie sued nvidia

Then an equity committee to represent the shareholders was established since 3dfx shareholders were getting screwed and they offered their version of things and a lawsuit.

and i think 1 more exists...id have to look it up.

its quite complicated.

 

[Jawed]

http://www.siliconvalley.com/mld/siliconvalley/16974103.htmhttp://www.theinquirer.net/default.aspx?article=38486

Jawed

 

[geekcomputing]

I guess i'll explain this in more detail.

Nvidia offered to buy parts of 3dfx. The deal was for 3dfx to talk down the creditors and get a lower price for debt. When all debt was paid off 3dfx would get some nvidia stock. so nvidia paid them some cash and waited for 3dfx to fill its part of the bargain.

sounds good on paper.

untill the 3dfx landlord went batshit and sued 3dfx. so 3dfx HAD to declare bankruptcy and that just threw everything in a funk.

so this case has 0 to do w/ IP.

So fast foward the courts appoint a trustie for the case and it gets very personal for him and hes not really representing the 3dfx shareholders.

So after some 3dfx shareholders got together the courts approved the equity committie , whos goal was to see the 3dfx shareholders got some of the pie. (if any)

somewhere in this time line the judge retired.

so now you have multiple cases , a new judge and lets say someone wins a case (of the 4.) they can always appeal it . This could be in Court for years.

Its FARRRRRRRRRR from over.

3dfx shareholders are the ones getting screwed.

 

[Maintank]

If 3dfx was in bankruptcy doesnt its creditors have to approve the sale of the company? Since they should be first in line to recieve any compensation?

The shareholders get screwed because as owners of the company, they are the last to see any money from the sale of a company in bankruptcy.

 

[Jawed]

It'll be interesting to see how long the Mercury will keep up its reporting - presumably the tactic will be to draw it out so long that everyone who doesn't need to be there gets bored and goes home.

http://www.mercurynews.com/ci_5526587

"We came across as a company that was not taking advantage of them,` Huang said. "All of that contributed to our ability to recruit engineers."

I imagine when the writing's on the wall you aren't necessarily going to be averse to being recruited by your previous competitor.

Jawed

 

[Geo]

If 3dfx was in bankruptcy doesnt its creditors have to approve the sale of the company? Since they should be first in line to recieve any compensation?

The shareholders get screwed because as owners of the company, they are the last to see any money from the sale of a company in bankruptcy.

You seem to have the timing wrong, and some of the terms. NV bought some assets of 3dfx. Then 3dfx declared bankruptcy when a creditor forced them to, which messed up potential follow up items that might have been there if that hadn't happened. So there was no bankruptcy court to stop the sale of assets to NV. Unless that sale hadn't closed yet, of course.

 

[geekcomputing]

We believe the company and its assets were worth only $14m but we paid $70m for them. I'm no legal scholar, but that sounds like a tough sell to make to the court. Yes, there's value in removing your once-primary competitor from the market, but that's still quite a difference. Be interesting to see how this pans out.

This occurs in business a lot. The accounting term is Goodwill. Basically you can look at 3dfx and say ok the assets were worth 14 million and then nvidia paid more than that to make the management want to sell the company. If they did not then they would have little reason to sell it.

The point the trustie is trying to argue is nvidia should have paid a ton more.

This will be in court for eternity and then they (the loser) will appeal it (eternity times 2 or 3)

more on goodwill here..
http://en.wikipedia.org/wiki/Goodwill_(accounting)

 

[Maintank]

You seem to have the timing wrong, and some of the terms. NV bought some assets of 3dfx. Then 3dfx declared bankruptcy when a creditor forced them to, which messed up potential follow up items that might have been there if that hadn't happened. So there was no bankruptcy court to stop the sale of assets to NV. Unless that sale hadn't closed yet, of course.

I see