digimav-ga,
Whew!
Ordinarily, in the course of a due diligence project, one usually
comes away with a clear-cut sense of a company. They're successful;
they're not successful. They're upstanding; they're a scam. Their
future looks bright....or dim!
Such, alas, is not the case with Y2Marketing. While there are
certainly a good many red flags that came up in the course of my
search, there is also a fair bit of the
American-dream-two-guys-making-it-big aspect to the company. Though
they went bankrupt, who knows whether they will rise from the ashes or
not.
What I have is many pieces of a puzzle, but nowhere near a complete
picture. I will try to make as much sense of it all as I can, in my
answer, below. However, a certain amount of ambiguity is unavoidable,
given the incomplete nature of the available information.
I trust the information below fully answers your question.
However, please don't rate this answer until you have everything you
need. If you would like any additional information, just post a
Request for Clarification to let me know how I can assist you further,
and I'm at your service.
All the best,
pafalafa-ga
===============
As an overview, here's how things look to me:
Y2Marketing and its numerous affiliated operations appears to have
begun on a shoestring by two fellows with some marketing gumption,
experience and a good sales pitch. The business seems to have moved
through three phases: (1) as a fairly conventional marketing company,
planning ad campaigns and the like for a small number of clients (2)
as a marketing training organization, selling their expertise via
training sessions so that others could learn their marketing
techniques, and (3) as a quasi-pyramid-style concern, where would-be
'agents' earn fees by bringing in other would-be 'agents' and so on.
Managerially, Y2Marketing is affiliated with a number of other firms,
though the affiliations are not always clear.
The company ended up in bankruptcy for reasons that are not abundantly
clear. However, part of its marketing activities involved mass
distribution of faxes, which eventually caused them to run afoul of
federal laws against unsolicited faxes, and this aspect of their
operations entered prominetly into the bankruptcy proceedings.
What follows are the many bits and pieces of information that were
gleaned about Y2Marketing, beginning with their website (my own
comments are included in brackets):
===========
http://www.mcaprogram.com/
Y2Marketing's Master Consulting Agent opportunity
Y2Marketing CEO, Rich Harshaw
(817) 310-0013
...In 1996 I signed a client that made coin-operated pool table and
air hockey. They were losing money and considering selling out to
their biggest competitor. Ten months later, I had put $7 million
dollars in profits in the owner's pocket, which he later used to buy
out that same competitor. In April 2003 he sold the company to
Brunswick for $34 million.
[ this seems to be true...more on this later ]
We were a smashing success, but we were virtually unknown, even in our
home marketplace of Dallas, Texas.
==========
I checked the whois record for mcaprogram.com, which shows who the
site is registered to, and which dates the site back to 2001:
==========
http://www.whois.sc/
Y2Marketing
1801 N Hampton Rd Suite 420
DeSoto, TX 75115
US
Domain name: MCAPROGRAM.COM
Administrative Contact:
Harshaw, Rich
1801 N Hampton Rd Suite 420
DeSoto, TX 75115
registration@y2marketing.com
9725725300 Fax: 9725728441
Technical Contact:
Bauman, Bryan
1801 N hampton Rd Suite 420
Desoto, Tx 75115
bbaum@y2marketing.com
972-572-5300 ex 203 Fax: 972-572-8441
Created: 06-jun-2001
Expires: 06-jun-2009
==========
I also checked the Texas Secretary of State's corporation records:
==========
https://direct.sos.state.tx.us/acct/acct-login.asp
[NOTE -- it's necessary to register at this site to view records, and
there is a small fee for each record]
13295510 Y2MARKETING.COM, LTD. Domestic Limited Partnership (LP)
Cancelled Legal Inactive
153342000 RICHARD HARSHAW PRESIDENT MONEY SOLUTIONS, INC.
Domestic Business Corporation Forfeited existence
153342000 RICHARD HARSHAW DIRECTOR MONEY SOLUTIONS, INC.
Domestic Business Corporation Forfeited existence
153976400 RICHARD C HARSHAW CEO MSI MARKETING, INC. Domestic
Business Corporation In existence
153976400 RICHARD C HARSHAW DIRECTOR MSI MARKETING, INC.
Domestic Business Corporation In existence
800061098 RICHARD C HARSHAW DIRECTOR MILLENNIUM 2 MARKETING, INC.
Domestic Business Corporation In existence
800224599 Rich Harshaw Manager RHEE MARKETING, LLC Foreign
Limited Liability Company (LLC) Forfeited existence
800228042 Richard Harshaw Manager SKBJ Marketing LLC Foreign
Limited Liability Company (LLC) Forfeited existence
800061098 Richard C Harshaw Registered Agent MILLENNIUM 2
MARKETING, INC. Domestic Business Corporation In existence
800089326 Richard Harshaw Director 24 Talents, Inc. Domestic
Nonprofit Corporation Forfeited existence
800089326 Richard Harshaw Registered Agent 24 Talents, Inc.
Domestic Nonprofit Corporation Forfeited existence
[There are a number of Texas marketing companies registered to Rich
Harshaw (and variants of the name)...note that some companies are 'in
existence', some have 'forfeited existence' and Y2Maketing, itself, is
listed as inactive. Note, as well, that I did not confirm for each
company that this is the SAME Rich Harshaw that ran Y2Marketing, but I
presume that it is. I did check on MSI Marketing, however, and their
record includes this:]
Name: MSI MARKETING, INC.
Address: 6363 N HWY 161, SUITE 600
Irving, TX 75038 USA
ASSUMED NAMES
Assumed Name Date of Filing Expiration Date Inactive Date Name
Status Counties
Y2MARKETING July 21, 2000 July 21, 2010 Active All Counties
October 10, 2003 RICHARD C HARSHAW CEO 4629 DEVONSHIRE
Grand Prairie, TX 75052 USA
October 10, 2003 RICHARD C HARSHAW DIRECTOR 4629 DEVONSHIRE
Grand Prairie, TX 75052 USA
October 10, 2003 EDWARD A EARLE PRESIDENT 970 MOBLEY ROAD
Cedar Hill, TX 75104 USA
October 10, 2003 EDWARD A EARLE DIRECTOR 970 MOBLEY ROAD
Cedar Hill, TX 75104 USA
October 10, 2003 PHILLIP R SETTLES COO 226 LAYMAN DRIVE
Cedar Hill, TX 75104 USA
October 10, 2003 PHILLIP R SETTLES DIRECTOR 226 LAYMAN DRIVE
Cedar Hill, TX 75104 USA
===============
I also checked with the Better Business Bureau in Texas to see what
sort of information was available:
===============
http://www.dallas.bbb.org/qsearch.html
BBB Metropolitan Dallas Database Search
[I searched on the telephone number for Y2Marketing]
(817) 310-0013
[Three company names came up]:
Marketing Strategies
2321 Ira E. Woods Avenue Suite 200
Grapevine, TX 76051
Millennium 2 Marketing, Inc.
2321 Ira E. Woods Avenue Suite 200
Grapevine, TX 76051
Y2 Marketing
2321 Ira E. Woods Avenue Suite 200
Grapevine, TX 76051
[Note the business has a start date of 1989, and a local Dallas area
start date of 1994]
BBB Reliability Report
Y2 Marketing
2321 Ira E. Woods Avenue Suite 200
Grapevine, TX 76051
General Information
Original Business Start Date: January 1989
Local Business Start Date: January 1994
Principal: Mr. Dan Billings, Executive VP
Customer Service Contact: Mr. Dan Billings, Executive VP
Phone Number: (817) 310-0013
Fax Number: (817) 310-0016
BBB Membership: This company is not a member.
Type-of-Business Classification: Advertising Specialties
BBB Membership
This company's membership with the Better Business Bureau was revoked
on June 13, 2005, by the Bureau's Board of Directors due to a failure
to abide by an arbitrators decision, contrary to a previous agreement
to do so.
Additional company management personnel include:
Mr. Rich Harshaw , CEO / President
[Getting tossed out of a BBB is not a common event, as far as I am
aware. You may want to give the BBB a call to see if they can shed
any more light on the situation here]:
BBB telephone: 214-220-2000
===============
Y2Marketing not only got in trouble with the BBB. The FCC got after them as well:
==========
http://www.fcc.gov/eb/Orders/2002/DOC-241074A1.html
FEDERAL COMMUNICATIONS COMMISSION
AUGUST 14, 2002
Y2 Marketing
a.k.a. MSI Marketing, Inc.
1801 North Hampton Street, Suite 420
DeSoto, Texas 75115
Attention: Rich Harshaw
Y2 Marketing
a.k.a. MSI Marketing, Inc.
2305 Oak Lane
Grand Prairie, Texas 75051
Attention: Rich Harshaw
RE: EB-02-TC-187
Dear Correspondent(s):
This is an official CITATION and LETTER OF INQUIRY related
to your business's apparent violation of section 227 of the
Communications Act of 1934, as amended, (``Communications Act''),
47 U.S.C. § 227, and section 64.1200 of Federal Communications
Commission (``FCC'' or ``Commission'') rules, 47 C.F.R. §
64.1200. These actions are taken pursuant to the provisions of
sections 4(i), 403, and 503(b)(5) of the Communications Act, 47
U.S.C. §§ 154(i), 403, 503(b)(5).
....and so on.
=====
There's also this one from the FCC, linking Y2Marketing as in business
with Fax.com:
http://www.fcc.gov/eb/Orders/2002/FCC-02-226A1.html
FEDERAL COMMUNICATIONS COMMISSION
File No. EB-02-TC-120
In the Matter of Fax.com, Inc.
NOTICE OF APPARENT LIABILITY FOR FORFEITURE
Adopted: August 2, 2002
As mentioned above, only one of the 489 faxes that form the
basis for this NAL identifies Fax.com in any way. Nonetheless,
Fax.com's various toll-free opt-out numbers appear on each
advertisement. In fact, the wording of the opt-out notices, and
the fact that they are contained on advertisements for individual
entities, clearly convey the erroneous impression that opt-out
numbers are associated with individual advertisers. See, e.g.,
Advertisement from Y2 Marketing to D. Leon Taylor (Oct. 16, 2001)
(``If you received this fax in error and would like to have your
number removed from our database, call toll-free at 800-822-9033;
http://www.fcc.gov/eb/Orders/2002/FCC-02-226A1.html
TABLE 1
Unsolicited Advertisements Transmitted by Fax.com
and Subject to Forfeiture Pursuant to FCC 02-226___
1/6/02 Y2 Marketing
1/12/02 Y2 Marketing
2/10/02 Y2 Marketing
[and quite a few others...]
===============
A search of several newspaper databases turned up a few mentions of
Y2Marketing and/or Harshaw, including one pretty in-depth article from
a Texas newspaper. Since the articles are copyright, I cannot
reproduce them in full. However, you may want to ask a librarian to
get you a copy of this article from the Dallas Morning News -- it is
of particlar interest since it describes their business model, and it
names quite a number of Harshaw's marketing 'agents', both successful
and not so successful:
===============
The Dallas Morning News
August 10, 2003
Ideas at Work Column
IRVING, Texas--REBELS WITH A MARKETING PLAN
...Just who are Ed Earle and Rich Harshaw and why do people fork over
$ 35,000 to join their marketing company?...This pair of
thirty-something mavericks and their Y2Marketing are diametrically
different from the agency pack.
...Mr. Earle, 36, and Mr. Harshaw, 34, command a growing network of
agents who do marketing for clients around the country and in
Canada...The company resembles a national franchise network. But its
agents are licensed, not franchisees.
...Since early 2001, nearly 800 people (75 percent male) have paid
Y2Marketing the $35,000 enlistment fee for five days -- 60 hours -- of
advertising boot camp and the right to sell marketing under the Y2
banner...
...All client revenue flows through Y2Marketing, which keeps 10
percent for its business support services...it helps agents identify
potential clients, markets to those prospects with seminars, reviews
marketing materials and facilitates Web programming, copy editing,
graphic art and media buying.
...Y2Marketing has been astoundingly successful in the last 2 1/2
years, coming out of nowhere to a projected $ 40 million in revenue
this year, the partners say. About $ 18 million of that will be from
training 500 people to think like they think.
...Brian Andrews, an agent in Bakersfield, Calif., is doing
[marketing] for Sport Science Research, a nutritional supplements
company in Ontario....
...Pittsburgh radio host Ron Morris says Y2Marketing makes no attempt
to weed out those destined for failure. Since interviewing Mr. Earle
in May 2002, he's heard from about 75 "humiliated, angry and
embarrassed" agents, many of whom, he says, have spent nearly $
100,000 with nothing to show for it....The Texas attorney general's
office has one complaint filed with it seeking a refund from the
company, which is incorporated as Millennium2Marketing Inc...There are
also 26 complaints for unsolicited faxes...
[NOTE-- I checked the Texas AG's website but did not find any pertinent records]
Jason Charles, a 41-year-old licensed agent in Laguna, Calif., says
the 10 percent fee Y2Marketing charges for support services is a
bargain....Even though Randy Sumrall in Baton Rouge, La., is eight
months into the program and has no clients, he says he isn't
discouraged. He's getting support from corporate and hopes to land at
least one of several prospects...
Richard Curtis Harshaw, who grew up in Grand Prairie, holds a business
management degree from Brigham Young University...[Harshaw and Earle]
are active members of the Church of Latter Day Saints...They met in
Utah while working as telemarketers...They prospered with clients that
included an insurance agency in Fort Worth, a pool table manufacturer
in Richland Hills and a corrugated box company in Saginaw.
[NOTE...the 'pool table manufacturer' is the company mentioned in the
case study on the mcaprogram.com website]
...During the late 1990s, the duo made money with a highflying (and
now departed) client that trained people to be in the electronic
banking industry. The client had a commission-like structure similar
to the one Y2Marketing uses today.
...When asked how many of the 800 agents Y2Marketing has trained are
still on board, Mr. Harshaw says once an agent, always an agent,
although about 10 percent are dormant.
[Other agents mentioned in the article were:
Debra Baker -- with client Carol Hammonds, regional director of two
Irving child care centers, A Child's Place Development Center and the
Las Colinas Learning Center.
Mark Elliott -- with client, John Kmiecik, owner of Cake Affairs in Houston
==============
[A few other newspaper mentions]:
Fort Worth Star-Telegram
October 14, 2002
BIZ-NOTES
...There are 47 Texas companies on this year's Inc. magazine's latest
list of the 500 fastest-growing small businesses.
...Y2 Marketing, DeSoto, No. 42
The Houston Chronicle
August 01, 2002
...Tye Anthony and Terry Poyner of Y2Marketing will present a Tomball
Area Chamber of Commerce business training and development workshop
entitled 'Monopolize Your Marketplace' from 7:30 to 9 a.m., Aug.
16...There is a $ 5 fee to attend to workshop
[Apparently, not all the agents command a $35,000 training fee!]
The Dallas Morning News
November 8, 2001
Commercial Real Estate Services Firm Tops List of Fast-Growing Dallas Firms
Dallas 100 Awards
...54. Y2Marketing Inc. (MSI), DeSoto
[I also found the story about the coin pool table company sold to
Brunswick -- although Harshaw isn't mentioned, this is the company he
mentions in his site]
PR Newswire
June 10, 2003
Brunswick Acquires Valley-Dynamo, Leader in Coin-Operated Pool Tables
...Brunswick Corporation (NYSE: BC) announced today that it has
acquired the assets of Valley-Dynamo, LP for $34.5 million from
private investment firm Fenway Partners, Inc., and an individual
investor, each of which had owned 50 percent of the company.
Valley-Dynamo is a leading manufacturer of commercial and consumer
pool, foosball and table hockey, particularly for the coin-operated
and specialty retail sales channels...
The Washington Post
March 4, 2004
FACE TIME Local Tech Events
10 a.m. to 3 p.m., AA County Association of Realtors Building, 555
Benfield Rd., Severna Park. Sponsor: Y2Marketing. Cost: $199. Contact:
410-544-7879, mym@marketyourvalue.com. Event Web site:
www.marketyourvalue.com/seminars.htm.
================
The Washington Post article seemed worth digging into, as it was a
non-Texas area reference, and involved a new company name,
MarketYourValue.com. Their website is here:
http://www.marketyourvalue.com/
EVERYTHING You've Ever Learned About Marketing is WRONG.
and it certainly has a familiar ring. A whois search didn't show much:
===============
http://www.whois.sc/marketyourvalue.com
Registrant Contact
Whois Protection Service - ProtectFly.com
Created: 2003-04-14
[In other words, a site created in 2003, and the identity of the
registrant is masked]
===============
A search of the Maryland Department of Assessments and Taxation online
records turned up a bit more information:
===============
http://sdatcert3.resiusa.org/ucc-charter/CharterSearch_f.asp
Name Search: marketyourvalue
(Dept. ID) Entity Name Entity Detail Status
(D07371974) MARKET YOUR VALUE, INC. General Info. Amendments
Personal Property INCORPORATED
Principal Office (Current):
345 MARBA ROAD
SEVERNA PARK, MD 21146
Resident Agent (Current): JOAO MOREIRA
345 MARBA ROAD
SEVERNA PARK, MD 21146
Status: INCORPORATED
Good Standing: Yes
Business Code: Ordinary Business - Stock
Date of Formation or Registration: 04/17/2003
State of Formation: MD
Joao Moreira is also listed as the company executive. My guess would
be that Joao is one of the Y2Marketing agents. You may want to try
contacting him to learn of his experience.
===============
Some regular old internet searching on the various company names and
executive names also turned up some interesting tidbits.
=====
http://www.pnl.gov/edo/newsletter/backissues/Feb03.stm
Marketing, advertising, and sales strategies ~ ~
"Monopolize Your Marketplace" is February 20.FEBURARY 20.
Y2Marketing, a national marketing consulting firm, is offering a free
seminar, "Monopolize Your Marketplace," on February 20 from 1 to 3 pm
at the Red Lion Hotel, Pasco. Attendees get CDs on marketing
strategies plus a one-on-one 45-minute session of personalized
consultation. There is no cost to attend, but you must register by
contacting Steve Talbot at (509) 542-9355, (866) 764-5023, or
stalbot@y2marketing.com
[You might want to try contacting Talbot about his experience]
=====
=====
[the y2marketing site itself leads to another, apparently
re-incarnated version of the company]
http://www.y2marketing.com/
Our site has moved to a new location....Click Here to go there now.
[clicking leads you to]
http://www.mymessentials.com/
Monopolize Your Marketplace
Message From MYM Founder, Rich Harshaw
[sound familiar...?]
=====
=====
[the wonderful Internet Archives site has old versions of the
y2marketing sites, which are worth a look...here are some excerpts
from 2003]
http://web.archive.org/web/20031226040444/http://www.y2marketing.com/
Everything You've Ever Heard, Everything You've Ever
Tried, And Everything You've Ever Done Is All Wrong!
Most people don't get this simple marketing truth:
...Marketing's job is to facilitate the prospect's decision-making
process and cause them to say...
"I would have to be an absolute fool to do business with anyone else
but you...regardless of price."
Do your advertisements, brochures, websites, etc.,do that? Do you want them to?
http://web.archive.org/web/20031203171148/www.y2marketing.com/services.htm
...At Y2Marketing, we truly live up to the full-service label. We've
assembled a complete range of services to handle all of your marketing
and advertising. We not only provide you with marketing and strategy
consulting through one of our Master Consulting Agents, but from there
we can build your identity, collateral materials, web development,
national or regional advertising campaign, AND handle distribution and
media placement on all counts.
...We research market trends, maintain an extensive list of national
media contacts, provide mail house services and go the extra mile to
ensure that your printing and production is handled and supervised
through one of our Y2 pre-qualified production facilities in the
Dallas market.
...Our web services go beyond the normal development company as well.
We not only provide the highest caliber custom web development
services, but we offer the cost effective Techmark e-commerce package,
an e-commerce website on par visually with Fortune 500 level
companies. We provide advanced search engine packages, mass e-mail
capabilities, and multi-media presentation development - all based on
the latest technologies.
http://web.archive.org/web/20031210204832/www.y2marketing.com/comp_history.htm
...Y2Marketing is one of the nation's largest and fastest growing
marketing services agencies. The business was started in 1994 by
partners Richard Harshaw and Edward Earle and was known as Marketing
Strategies Inc. From that time to 1998, the company worked with over
9,000 different businesses in over 350 different industries through
seminars, workshops, one-on-one consulting, and individual
consultations.
http://web.archive.org/web/20031212010106/www.y2marketing.com/comp_success2.asp?case_id=22
...I talked to Rich in a pre-seminar consultation about how to
cost-effectively communicate with my huge database of customers. He
asked me if I'd ever considered sending a fax out to them to keep them
informed of specials and educate them on how to more effectively
retail the products. I had heard about fax broadcasting before, but
had never pursued it. Well, I got everything ready to go by the time I
showed up for the seminar. The only thing I was lacking was the actual
piece that I would send out. Rich took the time at one of the breaks
to go through the headline bank with me and help me sketch out a
letter. I went back to the office that night and typed up the letter
really quickly and sent it out to everyone on my database that we had
a fax listing for (only about 1,100 businesses).
...The next morning when I came in to the office, we had already taken
orders worth $9,400 and that was before 10:00 a.m. Within a week, that
one fax generated $34,700 in sales and we still get calls on it now.
Here's the best part: The product we promoted on the fax has a 55%
profit margin and we don't even carry it in inventory. We drop ship it
from the manufacturer. That's a gross profit of $19,000 in a week.
That makes the decision to go to the 2-day workshop a real no-brainer.
Needless to say, we're very excited about these results."
Van Walker,
President
Blue Sky Inc., A National Distributor of Gifts And Stuff
http://web.archive.org/web/20031212005839/www.y2marketing.com/comp_success2.asp?case_id=24
Video Production and Duplication
"I Increased My Response Rate To 82% Using A Strategy I Got From Rich
& Ed's Newsletter..."
Gale Corely,
Regional Manager
Allied Digital Technology, A National Video Production and Duplication Company
===============
I tried checking up on the Blue Sky Inc, and Allied Digital Technology
stories, but searches only led me to other y2marketing and related
sites. The results of my Blue Sky search are here:
://www.google.com/search?q=%22blue+sky+inc%22+%22van+walker%22&num=100&hl=en&lr=&c2coff=1&rls=GGLD,GGLD:2003-43,GGLD:en&filter=0
and some of the individual links seem to lead to agents:
http://www.deason.y2agent.com/nationaldistributor.htm
http://www.deason.y2agent.com/About.htm
Dan Eason
143 E. Nopal
Uvalde, TX 78801
Tel: 830-278-3009
Fax: 830-278-3234
deason@y2marketing.com
Other hits from the search are similarly-themed marketing sites:
www.y2marketingagency.com/info/nationaldistributor.html
www.marketyourvalue.com/ case%20study%20national_distributor.htm
www.freemymbook.com/page/page/1869297.htm
www.y2consultants.com/comp_success_nation1.htm
www.mymcoach.com/successstories/nationaldistributor.htm
www.techcopywriter.com/ Archived%20Files/Testimonials1.htm
Notice that there's no hit for an actual company, Blue Sky Inc, whose
CEO is someone named Van Walker.
Similarly, the search results for [ "allied digital technology" corely ] are here:
://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLD,GGLD:2003-43,GGLD:en&q=%22allied+digital+technology%22+corely
and once again, the results all lead to other marketing sites using
the same stories, with no sign of an actual company by that name with
an executive named Corely:
www.merchantibss.com/casestudy_clients2.asp?case_id=24
www.y2consultants.com/comp_success_video1.htm
www.xyz-furnitue.y2webbuilder.com/page/page/1373260.htm
www.techcopywriter.com/ Archived%20Files/Testimonials1.htm
www.z10marketing.com/successes.html
Here's some search results looking specifically for sites with y2agent
in their url:
://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=GGLD,GGLD:2003-43,GGLD:en&q=inurl%3Ay2agent
===============
I also conducted a search of lawsuits and court records, and here, a
great deal of information turned up. The documents from the bankruptcy
are online at:
https://ecf.txnb.uscourts.gov/cgi-bin/login.pl
U.S. Bankruptcy Court
Northern District of Texas
Official Court Electronic Document Filing System
I can link to some of the documents from the bankruptcy, but for the
best ones, one must have a special registration with the courts to
retrieve them -- I have excerpted from some of these documents, and
provided links to copies that I downloaded.
===============
The attorney representing Y2Marketing (MSI Marketing) is listed as:
Richard G. Dafoe
Vial, Hamilton, Koch & Knox
1700 Pacific Ave., Suite 2800
Dallas, TX 75201
(214)712-4650
rdafoe@vialaw.com
Assigned: 06/06/2003
LEAD ATTORNEY representing MSI Marketing, Inc.
1801 N. Hampton, 400
DeSoto, TX 75115
(Debtor In Possession)
===============
===============
The bankruptcy opinion is online, here:
http://www.txnb.uscourts.gov/opinions/saf/03-35822_20050411.pdf
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
CASE NO. 03-35822-SAF-11
[You might want to look over this entire document. Much of it focuses
on the faxing issue, and provides some details of the company's inner
workings]:
On June 6, 2003, MSI Marketing, Inc., the debtor, filed a
petition for relief under Chapter 7 of the Bankruptcy Code. On
July 1, 2003, the court converted the case to a case under
Chapter 11. On November 3, 2003, Debra Hicks, now known as Debra
D. Colabrese, filed a proof of claim on behalf of herself and all
others similarly situated for damages for violations of the
Telephone Consumer Protection Act, 47 U.S.C. § 227, relating to
the sending of unauthorized facsimile communications.
On July 15, 2000, and July 22, 2000, Hicks received two
facsimile communications she asserts had been sent or caused to
be sent by MSI. One fax solicited people to operate a medical
billing business for an entity known as American Billing
Services, and offered a free seminar. The other fax headlined a
success story in the medical billing business, solicited
participation, and provided a pass for the seminar. Hicks did
not give permission to MSI nor to any other entity to send the
facsimile communications.
Phillip Settles, MSI?s
chief operating officer, testified that MSI did not send the
faxes to Hicks and did not send facsimile communications in
Pennsylvania. He conceded that MSI had sent facsimile
communications in Texas. He testified that MSI prepared
advertising for ABS, and arranged the services of Fax Source to
send the facsimile communications for ABS.
MSI had also invoiced ABS on February 22, 2000, for 4,369
facsimile communications sent to Harrisburg, Pennsylvania, on
February 18, 2000, and on February 29, 2000, for 6,507 facsimile
communications sent to Harrisburg on February 25, 2000.
MSI had been a marketing service agency. Doing business as
Y2Marketing, in 1999 MSI advertised that it could broadcast by
computer-generated faxing documents to many destinations
virtually simultaneously. On its web page, Y2Marketing addressed
who should fax broadcast and why. Y2Marketing represented that
it had a ?giant database of over 6.2 million fax number[s]? in
230 of the biggest markets.
===============
The testimony of Phillip Settles at the bankruptcy proceedings is
particularly revealing about the company's workings, and interactions
with other companies, but there is no direct link to this file. Some
relevant excerpts are below:
[Note: the name Harshaw is mistyped as Horshaw, throughout the document]
1 Q Mr. Settles, how are you employed?
2 A I work for Y-2 Marketing.
3 Q And Mr. Oney in some of his remarks had talked about
4 you refer to that often as M2M or ever refer to OM2 Marketing
5 as M2M?
6 A Yes.
7 Q That would be the same group that's called M2M on
8 occasion?
9 A Yes, sir.
10 Q What is the nature of the business of Millennium 2
11 Marketing?
12 A Marketing, advertising, consulting company.
13 Q Now, who is MSI Marketing Inc., the debtor?
14 A MSI Marketing Inc. was a company that's similar in
15 business as us, marketing, advertising, consulting firm.
16 Millennium 2 Marketing purchased the leases and a few things
17 that they had that they owed money on back in January, I
18 believe, of 2002.
20 Q All right. Were you an officer in the debtor?
21 A Yes, sir.
22 Q Are you still an officer of the debtor?
23 A Yes, sir.
24 Q And are you an officer of M2M?
25 A Yes, sir.
1 Q Are there other people who serve as officers or
2 directors in MSI and M2M?
3 A Yes, sir.
4 Q Could you name those people and what their positions
5 are?
6 A Edward Earl who was president of MSI Marketing and
7 also president of Millennium 2 Marketing and Richard Horshaw
8 (phonetics) who was CEO of MSI Marketing and also CEO of
9 Millennium 2 Marketing. When Millennium 2 Marketing purchased
10 MSI they brought four or five employees over from the old
11 company. And these are some of those people.
12 Q How many employees did MSI Marketing have?
13 A Had about 22.
18 Q And how many employees does M2M have?
19 A Approximately 82 employees.
20 Q How many of the employees who worked at MSI Marketing
21 now are working for M2M?
22 A Probably five people.
Q Now, both of these, MSI and M2M both corporations?
4 A Yes, sir.
Q Do they maintain corporate books and records separate
9 from each other?
10 A Yes, sir.
11 Q Do they have board of directors meetings on a regular
12 basis?
13 A Yes, sir.
14 Q Now, who is the owner of MSI? And I'm referring to
15 the debtor.
A The owner of MSI would have been Richard Horshaw and
17 Edward Earl.
Q Who owns the stock of M2M?
21 A There is a trust company called New Millennium Trust
22 that owns Millennium 2 Marketing.
23 Q Do you know what, if any, ownership of that trust Mr.
24 Horshaw and Mr. Earl or yourself have?
25 A I have none. And my understanding is neither do
1 either of them.
Q Okay. Do you know who is behind that trust?
5 A No, sir.
6 Q Okay. Where does M2M maintain its business?
7 A In Irving, Texas. You need the address?
8 Q Yes.
9 A 6363 North State Highway 161, Suite 600, Irving,
10 Texas.
11 Q Have they ever maintained their business in DeSoto,
12 Texas?
13 A Yes, possibly. I think so. I would think that yes,
14 possibly so. At some point there may have been because of the
15 time when M2M was buying MSI they needed to register in Texas.
16 And I assume that would be possible.
Q Okay. Do you know who is behind that trust?
5 A No, sir.
6 Q Okay. Where does M2M maintain its business?
7 A In Irving, Texas. You need the address?
8 Q Yes.
9 A 6363 North State Highway 161, Suite 600, Irving,
10 Texas.
11 Q Have they ever maintained their business in DeSoto,
12 Texas?
13 A Yes, possibly. I think so. I would think that yes,
14 possibly so. At some point there may have been because of the
15 time when M2M was buying MSI they needed to register in Texas.
16 And I assume that would be possible.
18 A Well, at the time for several years MSI has not made
19 a profit of any significance at all. So Rich and Ed had about
20 given up hope that it ever would. The idea was to create a
21 nationwide marketing company. And because of the profitability
22 it seemed like a low end. After two or three years it started
23 working out. And so they were approached -- My understanding
24 an offer was made to sell out their idea to another company
25 which was purchased by M2M, their idea was.
And that's pretty
1 much it. There wasn't really any assets tangible because most
2 of the material things were leased. M2M Marketing picked up
3 lessons on those items prior to the Chapter 7, Chapter 11
4 filing. And I guess that's really about it.
===============
Checking again with the Texas Secretary of State on Millennium 2
Marketing, we find:
Filing Number: 800061098 Entity Type: Domestic Business Corporation
Original Date of Filing: February 25, 2002 Entity Status: In existence
Formation Date: N/A
Tax ID: 17316313059 FEIN:
Duration: Perpetual
Name: MILLENNIUM 2 MARKETING, INC.
Address: 2321 IRA E WOODS AVE STE 200
GRAPEVINE, TX 76051-8632 USA
REGISTERED AGENT
Richard C Harshaw
MANAGEMENT
June 11, 2005 RICHARD C HARSHAW DIRECTOR 2321 IRA E WOODS AVE STE 200
GRAPEVINE, TX 76051-8632 USA
Assumed Name Date of Filing Expiration Date Inactive Date Name
Status Counties
Y2 MARKETING June 27, 2003 June 27, 2013 July 7, 2003 Abandoned
All Counties
Y2 MARKETING June 27, 2003 June 27, 2013 Active All Counties
Y2 MARKETING July 7, 2003 July 7, 2013 Active All Counties
Y2MARKETING July 7, 2003 July 7, 2013 Active All Counties
[Note that the name Y2 Marketing was both activated and abandoned in
June/July 2003, perhaps involving different people moving in and out
of the organization in a fluid situation]
===============
In the course of my research, I came across a number of documents that
are not available through a direct internt link. I saved and uploaded
these to these links below. You may wish to download them, save them
to your local system, and look them over at your leisure:
http://home.ripway.com/2005-3/279856/y2marketingbankruptcyfaxissue.pdf
This is the full transcript of Settle's testimony that I excerpted above
http://home.ripway.com/2005-3/279856/y2marketingbankruptcyfiling.pdf
The company's initial filing for bankruptcy, partly of interest for
how little information it actually reveals
http://home.ripway.com/2005-3/279856/y2marketingm2mincorporation.pdf
The company's original incorporation filing
http://home.ripway.com/2005-3/279856/y2marketingnameabandonment.pdf
The name 'abandonment' file, which contains individual names I hadn't
come across elsewhere.
I've thrown an enormous number of bits and pieces of information at
you, and I hope they are well-enough organized to be useful to you in
your investigation.
As I mentioned at the outset, if there's anything more you need, just holler.
All the best,
pafalafa-ga |
