Powerscreen Problem - Alan Hacker Vs Stan Star

SITUATION

 HackerStar Inc. formed 6 years back, 50-50 partnership, Stan Star invested $65,000 6 years back and another $30,000 with 9% interest 4 years ago.

 Alan Hacker is a working partner who is also President and General manager

 Produced 2 products - Resource Controller & PortaWord (6 years and 4 years old respectively)

 Stan Star very conscious of balance - profit /loss and keeping expenses under budget

 Alan Hacker upset that not enough budget for "Resource Controller" when it was launched, that caused to decreased sales and revenues.

 Stan Star wants Alan to concentrate more on marketing than R & D.

 Alan wanted to develop a new product "PowerScreen", but Stan didn't like the idea and repeatedly told him not to work on new product and concentrate on marketing the current ones. Alan went ahead anyway worked on his off-time but used HackerStar's IBM computer to debug the code. Alan also found an investor(Gates) who was willing to market "PowerScreen" for royalties.

 When Stan knew about this, he claimed that "PowerScreen" was HackerStar's property since Alan used its computer and some 'work time' to develop it. Stan is Ok about using Gates to market the product. So Stan wanted all the royalties to be given to HackerStar and split equally. This upset Alan, because he worked on it on his own time and Stan didn't want to do anything about it till now. Alan and Stan had a very bitter argument and they both accused and insulted each other.

 HackerStar's lawyer Dale Levinson suggested both have their own legal representatives to sort out the issue

 Dale pointed out that both parties had issues with how Alan's contract was written about rules of developing software during personal time and its profits. Also if they sue each other they would have to recognize income as long term capital gain etc. and also due to the fact that official records and meeting minutes were not kept in order to prove each other's points or argument.

GOALS

Mine (Alan Hacker's Attorney)

 Short term - Release "PowerScreen" with Gates and get Alan all the royalties and recognition

 Long Term - Avoid Litigation - Keep company intact

 Long term - Solve all issues with Stan Star - including getting Alan to devout most of his time in R & D and develop new products and hiring someone to of the marketing and promoting of the products.

Their (Stan Star's Attorney)

 Short Term - Release "PowerScreen" with Gates and HackerStar to get all royalties and be split equally among Stan and Alan.

 Long Term - Avoid Litigation - Keep company intact

 Long Term - Make Alan focus on marketing and promoting their products or come to a better agreement on how to achieve increased sales.

 Long Term - Redo contract agreement with Alan to make sure that he doesn't do another 'PowerScreen' on Stan. Stress on openness, trust and partnership between them.

INTEREST

Mine (Alan Hacker's Attorney)

 (P) Release "PowerScreen" with Gates

 (P) Get 100% royalties for PowerScreen

 (P) Concentrate on R & D - Develop new products and technology and not Marketing.

 (P) More capital for R & D, advertising and marketing a new product

 (P) Making Stan understand the importance of market share and initial product launch advertising

 (I) Better understanding between Alan and Star - Knowing the market and how to react when they launch a product with aggressive advertising and promoting

 (I) Apology from Stan Star

 (I) Hire new Marketing manager or a separate entity concentrating on advertising & marketing

 (E) Mend feud with Stan Star and make HackerStar successful with new products and proper

Theirs (Stan Star's Attorney)

 (P) Release "PowerScreen" with Gates & Get 100% royalties for HackerStar and split equally among Alan and Stan.

 (P) Concentrate on existing two products - Marketing

 (P) Reduce advertising budget - increasing profits

 (P) Getting Alan to listen and follow Stan's style of management and work more on marketing the current products with same or lesser advertising budget

 (I) Better understanding between Alan and Star - Knowing the market and how to keep within the budget with balanced advertising

 (I) Make Alan work more on promoting his products and calling customers individually

 (I) Get his investment paid off

 (I) Apology from Alan Hacker for his outburst

 (E) Replace Sparks or get him on a commission basis depending on sales of software

 (E) Increase sales by mail-order or adding more dealer representatives

 (E) Make sure Alan's contract is rewritten with clearer understanding of do and don'ts including using company property ect.

OPTIONS

 Opt 1: PowerScreen marketed by Gates, Alan Hacker gets 85% of royalties and Stan Star gets 15% for letting Alan use the company computer

 Opt 2: PowerScreen marketed by Gates, Alan Hacker gets 100% of royalties

 Opt3 : PowerScreen marketed by Gates, HackerStar gets 100% of royalties and split equally

 Opt 4: Gates invests in HackerStar for 20-30% share, buys out the $30,000 debt of Stan Star and takes care of advertising, marketing and distribution of HackerStar.

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