Wargames Factory responds

By tgn_admin
In News
Mar 29th, 2011
43 Comments
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The new majority shareholder of Wargames Factory has sent a letter responding to public comments made about his acquisition of the company.

Public Statement from Wai Kee Hui regarding Wargames Factory

It has been a little more than 2 months since Tony Reidy posted his “Open Letter to Wai Kee Hui” on The Miniatures Page website. I was aware of this “letter” at the time of posting and although I was annoyed at his unprofessional tone and angered at what amounted to many outright lies, I decided that my best course of action was to stay out of online politics and instead focus on trying to get the company I had recently become majority shareholder of into functional order.

The past 2 months have been extremely busy with trying to figure out what orders had been placed and paid for before I took over, inventorying product that was still in stock at Triangle and setting up a new order platform and shipping facility. These goals have now been accomplished, with all outstanding orders shipped and our web store reopened.

Throughout this process I was cognizant of the defamation of character my associates and I were receiving in Cyberspace at the hands of Tony Reidy and Howard Whitehouse. Even though at many times the temptation was strong for me to jump in and tell my side of the story, I refrained from doing so while we were struggling to put Wargames Factory back on track. Now that we are on the road to recovery, and in lieu of increasingly slanderous postings being made by Tony and Howard, I feel the time has come for me to set the record straight.

I became majority shareholder of Wargames Factory along with all its’ intellectual properties on October 13th, 2010. This acquisition occurred because over the course of the previous 2 years Tony Reidy had run up a bill of more than $250,000 with my manufacturing company in China and had failed to make a single payment on his bill during this time. Despite rumors to the contrary, I am not an immensely wealthy man and this is a huge sum of money to me. When it became evident that Tony was unable and unwilling to pay his debt to me, I had to consider my options. Option 1 was that I cease making product for Tony and call in the debt I was owed, which would effectively put Wargames Factory out of business. Option 2 was that I assume 51% ownership of Wargames Factory in return for the $250,000 I was owed . The intention behind option 2 was that I would gain controlling interest and help manage the company into some sort of financial health, where I might be able to recoup the monies owed me as well as make money for the rest of the shareholders. When both options were presented to Tony Reidy he chose option 2 and signed the paperwork transferring majority ownership to me on October 13th, 2010.

What occurred next is that Tony Reidy felt he should still be able to continue to manage Wargames Factory as he saw fit, with my only input being to proceed to produce product as before. This was not a scenario I was comfortable with, for obvious reasons. As a point of fact, before I signed the paperwork transferring the 51%, we had a forensic accountant look at the company’s financial health and it was discovered that the company had been running in the red for its’ entire existence under the management of Tony. While Tony is passionate about wargaming and the wargaming community, it was clear that he was completely unsuited to running this business. It was evident that for Wargames Factory to have any chance of financial success it would need to have a new business model.

The months following my acquisition of majority stock were rocky and tumultuous as I attempted to form some sort of working relationship with Tony Reidy. Many months were spent trying to get Tony to release access to the web store, company records and company bank accounts so that I could start to get a picture of what we were dealing with. In addition to the constant struggle to simply gain information regarding the company I now owned 51% of, more and more vendors and individuals started coming out of the woodwork claiming that Tony Reidy/Wargames Factory owed them money and they had never been paid.

I need to make something very clear. The agreement that Tony and I signed has a clause that states that he had fully apprised me of all debts the company owed before I became majority stockholder, and that any debts not disclosed were the responsibility of Tony, not Wargames Factory. I will not go into the long list of debts to both vendors and individuals undisclosed by Tony that have come to light over the past five months, but I am going to tell you about one specific debt.

When I took over the company I decided that we would need to move our operations and shipping out of the Boston area. This decision was based on the fact that my associates are based in the western United States and it made the most sense for our new business model to relocate there. When we told Triangle that we would regrettably be moving our shipping operations elsewhere, they informed us that before we could remove the Wargames Factory merchandise from their facility I would need to pay them the $5,000 that was owed to them for back salaries for their disabled shipping employees. This came as a big surprise to me, especially when I asked for a copy of their bill and discovered that Tony Reidy had not made a payment to the employees of Triangle for almost 2 years. In light of Tony and Howard’s recent posts claiming I cheated Triangle out of their money, I find myself most dishonored by this blatant lie.

There is not enough time for me to address all of the accusations and falsehoods about the new Wargames Factory team that have spun out of control over the internet for the past months, but I feel that I needed to shed a little light on what has actually transpired behind the scenes. For everyone’s information, between the $250,000 I was initially owed by Wargames Factory and the amount of money I have put into the company over the past 5 months to keep it afloat and get it back on its’ feet, it will be a long time before I possibly see any return on my investments. I am not a villainous, foreign millionaire doing a shady hostile takeover of a poor American company to make a fast buck. I am simply a business man who is making the best I can out of the difficult situation that is in front of me.

With that out of the way I want to let you know that while I am new to the wargaming world I am dedicated to providing the highest quality and most innovative product in the market and to listening to how you, our valued customers, would like to see Wargames Factory evolve. I thank you all for your patience during what was a very rocky transition and look forward to smoother sailing ahead.

Sincerely, Wai Kee Hui

  • Interesting, I’ve been hoping for a measured response from Wargames Factory, mainly just to hear the other side of the story. I’m a little surprised it happened!

  • supervike

    Egads, what a soap opera. Hopefully, this is the last of the dirty laundry we’ll need to see, and WF can get back to concentrating on gamers want.

  • Yes, you would have been best staying out of online politics and just kept quiet and supplied a great product with great customer service. Take your own advice next time and keep away from wargaming politics. Just produce great minis with superb customer service and the vast majority will be happy.

    • Zac

      Yes, you would have been best staying out of online politics and just kept quiet and supplied a great product with great customer service.

      Except that there have been public comments made on other sites and forums and this is their only public response.

      I don’t think its fair to tell them to not speak up when other people have done so.

    • n815e

      These guys have been getting hammered by ex-associates and the rumor mill. That has had a huge impact on their future as a company with many customers.
      I’m glad we got the other side of the story.
      At least this was a mature letter and not an angry mudslinging mess.

  • Doc

    I think he does have the right of a rebuttal though!

    • I agree. After a while you need to eventually speak up and give your side. silence can be a sign of guilt after-all.

  • Wow, the amount of misinformation and outright lies in this missive is staggering. I had hoped that after myself and the entire creative team behind Wargames Factory was “canned” as George Sivy (Wai Kee’s business manager) so elegantly put it back on January 7th, they would spend their time focusing on actually operating the company and fixing their mistakes.

    Instead, it seems that the focus has been on mis-packing product, making bizarre announcements about union busting, continuing to screw up molds, and printing packaging that hasn’t been finished (from what I glean on Facebook)

    I’ll be happy to present a detailed list of monies spent – including payments directly to George Sivy – and explain the nice way in which they have used a technical piece of the agreement (which actually was put in place way back in July and August) to weasel out of invoices that were presented AFTER Wai Kee took control.

    I’m sorry to everyone in the wargames community that all this nonsense is so public – and it is my own fault for losing my temper back in January after being blind-sided by Lonnie Mullins’ backstabbing and subsequent ousting from the company I started. It’s clear that since they aren’t competent enough to actually operate a business, they need to divert attention to me personally as somehow the cause of all ongoing problems.

    In the meantime, the original creative team has all come together and we are shortly to be launching full ranges of hard plastic miniatures under our new company – Defiance Games.

    We’ll let the quality and release schedule speak for us going forward.

    Thanks everyone – and I’m sorry again to have all this nonsense “out there”

    All the best,

    Tony

    Tony Reidy
    Defiance Games
    http://www.defiancegames.com

    • Mr. Reidy,

      Not to sound like I’m trying to stir up trouble or like I’m taking sides, but just something I thought needed pointing out: your use of inflammatory language. Using terms like “weasel out” or “backstabbing” and saying people aren’t competent doesn’t give a sign of professionalism. Perhaps less hostile language will give you a more positive reputation in these affairs?

      Just my two cents.

      • Hi LaBambaMan – I just have a hard time sticking to corporate speak when I know the depths to which people are willing to stoop. Whoever wrote this – I imagine it was written by George Sivy and then Wai Kee put his name to it – it’s just so wrong and misleading.

        To drag poor Howard Whitehouse into this – especially given that they owe him backpay for December and January – is just ridiculous. If you know Howard – and so many people in the wargames community do – the sillyness in attacking him is just mind-boggling.

        I was happy to let this whole thing blow over and move on, and I assume the only reason it’s popping up now (nearly 3 months after all of us were kicked out) is because they need to try to deflect attention from the ongoing failures – mis-printed packaging, mis-sized figures, labeling 28mm figures as 1/48 scale?, mis-packed sets, Lonnie’s bizarre rants on TMP and Facebook, etc. I cringe to see what they’re doing to a company that was actually on its way to major success right before this all took place. It’s just sad for all of us who worked so hard to build Wargames Factory.

        Anyway, enough of that. I understand where you’re coming from and apologize for the passion. The whole situation is just sad.

        Thanks,
        Tony

    • kalamadea

      I wholeheartedly agree that your language and tone are not winning you any sympathy. You could just well be 100% correct, but the manner in which you’ve gone about this situation and your rebuttle to this release has me siding with the new ownership completely. Every release I’ve seen you write on this subject has been filled with anger and vitriol to the point it almost sounds like whining. If thbgs happened the way you say, I can perfectly understand feeling that way, but public releases should be more professional and matter of fact. Whether Wai Kee Hui is completely on the level or lying through his teeth, his statement was made clearly, professionaly, and matter of factly.

      True or not I’m siding with “here’s how things happened” over “those guys are jerks and liars and thieves and screwing over everyone and you should care becuase it was me that got screwed”, especially becuase I’m sure the real truth is somewhere in the middle.

    • Cergorach

      If I was a supplier, Defiance Games would have to pay up front if they wanted any business, if at all possible I would decline to do business with them as a supplier (don’t really have that option in the EU). A company who’s owner/business manager has a public record of not paying his bills (so much so that he looses the controlling interest of his previous venture) and slandering in public the person/company he owes (a lot of) money to, I wouldn’t want to run the risk of being the next target of his public rant (not to mention not getting paid).

      As for doing business in China (with or without Wai Kee Hui), there are only two reasons I would go there, cost and expertise. The reason I would have difficulty with doing business in China is I don’t speak the language, distance, and possibly the laws/political situation. I would have the same issues with Itally or France, I would have most of the same issues with the US (I speak the language but the other issues remain). And I would make sure there were ironclad business contracts in play (especially if there’s $250k in play), if I had to go into serious debt, I would make sure that there was a contract or other legal document that specifies the payment plan.

      As for wanting to take over the business, the only real assets of WF are the designs and the molds (you could say that the relationship with the customers and distributors would be worth a pretty penny, but that value is pretty much gone now). And I doubt that WF would currently be worth half a million dollars. The designs are not original (only the sci-fi troopers are semi original), having a good designer make new designs and producing the molds/miniatures themselves and starting a new business would be probably cheaper then taking over WF. Most of the initial rush on sales for a new product will probably have been made. But it seems WF just didn’t have the money, so Wai Kee Hui seems to have made the best of a bad situation.

      Distributors and stores are getting supplied again, sure there was a fnckup with the Persians (the question is whose fault that is, old or new management), that generally happens when a company goes through such an enormous restructure. But at the moment I have more faith in the new Wargames Factory then I have in Defiance Games, but even WF has a long road ahead if it wants to join the ranks of Warlord/Perry in my book.

      What Wai Kee Hui has posted gives me the impression of a similar situation with Target Games > Paradox Entertainment > I-Kore > Urban Mamoth, etc. Do something cool, earn money, rack up debts, go bankrupt, move on to new company, rinse and repeat. Not saying that is what was happening, but it just reminded me of that chain of events.

      As a consumer, I’ll buy what I like, so if Defiance Game makes things I want I’ll buy them, the same goes for Wargames Factory, but I’ll go through an intermediary to save me a lot of potential hassle (and not to mention shipping costs). Currently have an order for three boxes of sci-fi troopers with Wayland Games (since january), and bought some British Firing Line from VVV (had them in stock and quick delivery).

      I hope that any potential new miniature companies that plan to produce in plastic learned here a couple of things. First pay your bills on time, produce ironclad contracts, and don’t rant in public.

      Defiance Games is working on ‘bug’ Aliens, look interesting enough (and if not to expensive might buy me some). They remind me a bit of the Zvezda aliens:
      http://zvezda.org.ru/english/catalog/xishhniki-ximery/Zvezda aliens

    • n815e

      The tone of your public correspondence has been less than professional.

      I hope that Defiance takes off and provides us with great products.
      However, it’s not as though Wargames Factory had a great reputation before the takeover. In fact, based on all the failed promises, unfufilled orders, etc. it’s not as though this response of the new management is out of the realm of believability.
      I’m sorry, but WF had earned a bad reputation before this. It can only go up.

      • Isnt that previous bad reputation all to do with shipping and product availability delays from the same manufacturer that now owns the company?? they simply went from debtor to debtee.. the big picture of whats transpired is important here.

        • n815e

          I’m not necessarily convinced.
          If you cannot or will not pay the producers what you already owe them, what is their motivation to keep making and shipping products to you?

          • Thinks that’s kinda of my point, they should have cut them off way way sooner 250K is alot of miniatures at cost OR let them get the shock troops out then and see if they could starting making serious good on what they owe. If that failed..then take over or call the note/sue, etc. Hui makes it seem like on verge of the Shock Troops release, Tony said “Hey I’m just not paying you”..and that makes no sense. It looks like they had them by the throat (holding the product they desperate needed ) and saw the opportunity to force a takeover and took it.
            granted some people may see that as a good business move but considering the WF backlash post takeover..I dont think its customers did.

  • Henrix

    Popcorn, anyone?

    Joking aside, this is about the calmest thing I’ve heard in this whole mess. Much better PR than anything else.
    I don’t know whether there’s any truth in it all, but it doesn’t sound implausible.

    Ah, well, the proof is in the pudding.

  • abbysdad

    Glad to hear that there will be a new company in play. Looking forward to seeing what Defiance brings to market. Glad to hear that WF is back on solid footing under new management that cares.

    But I’m somewhat distressed at the potential for name calling here. If there truly is a possible claim of defamation/libel about this situation, maybe the thread should just be locked now?

    Cheers,

    Chris

  • scarletsquig

    The only thing I’m interested in is the type of plastics being released and the quality of the sculpting of those plastics.

    I get a bit tired of all the corporate politics articles on TGN, to be honest. I’m a consumer, and I don’t care about any of it unless it relates to a company going bust or being revived.

    I think TGN would be a better place without all the lawsuit/corporate/non-wargaming related stuff on here. My opinion is probably a minority one though.

    • 032125

      Here here! I doubt that any of us is getting the real picture from two such characters anyhow, and honestly I come here for figures; not alligations and drama.

    • blackfang

      Nobody is forcing you to read the articles you don’t care about, you know.

  • tredhed

    Wow…..I havent been paying attention obviously as I knew nothing of this whole debacle. I kinda agree with Scarletsquig and 032125 that all the drama gets old.
    I do think having yet another hard plastic minis company can only be a good thing….competition drives companies to be better than the other guys.

  • Ok, I am sorry but having run a small company myself for 15 years and seen about every trick in the book, this letter stinks to high heaven with a couple issues that need serious clarification before this guy can be taken seriously.

    1 you do not allow any client to amass $250K of debt, unless you have an alterior motive. These debt takeovers of small business are almost as old as the world oldest profession. Being in control of the manufacturing also puts Mr Hui in a postion where he knew those shipping delays could cost tony even more money and FORCE tony to accept an offer “he cant refuse” to stay in business. This isnt the first time I’ve heard of Chinese business using this tactic to takeover American companies, its more common than you think

    2 Why on earth would WG owe triangle for Salaries and Disable pay for there employees? they arent part of WG and Triangle is required by law to have Workers Comp..this makes zero sense without a more detailed explanation.

    in short Mr Hui’s sounds like a load of BS.

    Disclaimer, I was a supporter of WG from the get go..and as a small business owner and sympathic to Tony and admire his passion for the hobby..we’ve spoken via email over the year and we’re friends on Facebook but its as superficial as that.
    so yeah I am somewhat biased…but doesnt change the fact this letter stinks.

    • Zac

      you do not allow any client to amass $250K of debt, unless you have an alterior motive

      Item 6 of the Comment Code of Conduct is “Don’t comment on the state of mind of other people.”

    • antenociti

      Personally I find Mr Hui’s letter far more plausible than any of the conspiracy theorists & theories accusing him of trying to take over the American way of life.

      If you owe lots of money and cant pay your bills then 2 things spring to mind:

      1) You go bankrupt
      2) You sell out to try to cover your debts: a RISK for the person doing the buying.

      “on the way to major success” seems not to particularly well cover a company so far in debt it had to sell itself out to try to cover a portion of those debts.

      • remember Hui allowed him to create such a massive debt, and just when the biggest run (the shock troops) where about to be released with the biggest pre orders. they called the note. Textbook.. debt takeover

        • antenociti

          Some very famous American families made their money in that fashion and are lauded as economic geniuses. It is therefore ironic that when a non-American does it it apparently becomes “a bad thing”.

          Either way, the debt existed and the fault for that lies very clearly with one party: the original WF team: poor product planning and promising products well before they ever materialised, lack of coordinated releases, swapping genres… it was a mess from the start.

          Some of that same team have now started “another company” that is already operating in the same fashion by promoting “coming products” that will, on past performance, either never see the light of day or wont be seen for years.

          In the long term the truth will out simply by comparing the success of WF under its new management against the success of Defiance games.

          In the meantime I think Mr Hui is not only right to respond to the morass of accusations but has also done so in a professional manner. A manner completely at odds to the other party who not only seem to enjoy sticking the knife in, but also refuse to shoulder any responsibility for the financial failure of WF under their management.

          • Well know hold on minute don’t paint us all with one brush personally as an American I have a ton of problems with US business practices across the board…so this has nothing to do with him being Non-American. This just has the appearance to me of a text book hostile takeover. and given what I have read from all involved Mr. Hui’s comments dont pass the smell test. thats My personal opinion only.
            also I certainly dont hold Tony blameless they got themselves into this mess, abet with alot of help. and I dont see him denying any personal responsibility either. I’m sure he knows he made horrible mistakes.
            I know you run your own shop and know first hand about manufacturing details and what goes into making a relationship work. So your opinion is very relevant to me but at this point I am still well on the Reidy side of the fence.

          • tyrela

            No one forced the old management to spend well beyond their limits. They chose that course of action and their margin was called. And all they have done since is sling horrid Vitrol on the nets. Bad form…

          • antenociti

            This isnt the first time I’ve heard of Chinese business using this tactic to takeover American companies, its more common than you think

            if its nothing to do with him being non-american why raise the point that he was Chinese? Really, why?

            From the very first Tony Reid letter the jingoistic anti-china rhetoric has been present and played very heavily upon.

            There is no man behind the curtain: WF failed under Tony because of a bad plan, poorly executed and ill conceived, off the back of a half-decent idea not fully thought through, without proper funding and a slow return that strangled cash-flow.

            Quelle surprise…

            So, he wasn’t the first, he wont be the last, but blaiming the chinese? Bad show, very bad show.

          • Unfortunately there is a bad Chinese stereotype going on here in the US about this sort of thing. rightly, wrongly or unjustly it’s the reality so it merited mentioning, and someone will inevitably mention it again. I’m certainly not on any jingoistic anti-china bandwagon that’s for sure please accept my apology if you were offended.

            You are correct however, Tony got himself in this mess I have no doubt.my opinions on whether the takeover was less than ethical aside.

    • n815e

      It wasn’t diability pay. The employees of Triangle are disabled persons.
      They owe Triangle for services rendered.

      Being friendly with the guy does not default him to status of able businessman.

      • Thank you, that makes alot more sense. I figured something got lost in translation.

  • apologies Zac…that’s kind vague in the big picture context of that I’m talking about, but ok. Oh and its Ulterior, not Alterior..not sure what I was thinking there..if you want to strike my post..I wont be offended.

    • Zac

      Just a friendly reminder is all 🙂

  • Longbow

    Well, whatever the truth may be. The proof of the pudding is in the eating. If the new owners of WF are not passionate enough about the hobby, it will show in their upcoming releases. Whatever happens to the business will depend on whether they can produce stuff people actually want. Same goes for Tony’s new company Defiance Games.

  • morkin

    Well, I for one am hugely interested in this kind of look behind the scenes and would like to see TGN continue to feature articles like this. Of course, only solid documentary evidence will lead to any approximation of the truth being revealed, but it makes for very good reading to see how the two parties handle the situation.

    I’m definitely staying on my nice little fence here, but I would like to point out one thing: A successful business does not produce what people want, a successful business produces what people will buy. This is a seemingly slight but very important distinction and anybody who has ever had occasion to compare hype or e.g. forum interest with actual sales figures will have experienced it first-hand.

  • “I’ll be happy to present a detailed list of monies spent – including payments directly to George Sivy – and explain the nice way in which they have used a technical piece of the agreement (which actually was put in place way back in July and August) to weasel out of invoices that were presented AFTER Wai Kee took control.”

    I don’t understand this. Every line in a contract is a ‘technical piece of the agreement’. Didn’t you have a business lawyer (who is not a friend or relative) look over every line of the contract and explain it to you before you signed it? Who cares when the line was added prior to signing. You signed it, sir! You are responsible for it. Business is business. End of story.

    Since neither company makes anything I’m interested in, I could care less about this situation. I find it all amusing, like a badly scripted reality TV show.

  • hurley895

    To me Tony’s been caught trying to sick it to a forgin invester. Now Mr. Hui seems like actual businessman, he’s out to win and he’s going to use all the tools he has learned to make WF work. He’s going to be cutting some teeth and make some mistakes but when he’s done WF will be a strong company.

    Ask yourself this:
    If your employee lied to you wouldn’t you fire him?
    If your company was over staffed and in the hole would you let people go?

  • Now I am going to limit myself to Wai Kee Hui’s public statement – after all I said my 2p about the previous statement. One of my first ever jobs involved chasing unpaid invoices for a failing business and dealing with other financial funny business. The key here is have a credit limit and terms of sale. There should have been a limit to the debt and when invoices were not settled, a stop put on the account, simple.
    I have just done business with a Chinese firm for the first time and the deal was this; 33% paid up front and the rest paid when the goods were loaded on board the ship. Took a bit of trust from me but it all went well and I would be happy to repeat the experience. In all – including taxes – the goods cost me half what I would have paid in the UK.
    I certainly would not expect a new business to make money in 2 years, most businesses allow for 3 years without profit and budget accordingly. And yes wargaming is a funny business, no one really needs the stuff so it is all about the ‘buzz’ that you give the customer (another business motto to add to the wise words that others have already said, sell the sizzle, not the steak).

  • Kaine

    I have no experience with any of the firms involved, so from an outsider a piece of advice.

    On one front we have a well written post that explains the situation, on the other we have a rant that often erodes into mud slinging.

    I know which one i’ll do business with in the the future and it certainly wont be Defiance Games.

    I mean how do you manage to get into a situation of owing a supplier 250k, and if you do that with one supplier you might be doing it with more than one as well, and some of these suppliers arent all big guys, i cant stand firms that dont pay suppliers promptly. It not only damages their own rep and business standing, but can also collapse other firms that are reliant on being paid for goods supplied.

    I dont see anywhere were it states the 250k bit is disputed so i’m assuming that bit is as read.

    • hdan

      Actually, it’s exceedingly easy to get into such a situation. Imagine for a moment that you need to invest in an expensive machine (or maybe a series of injection molds for plastic toy soldiers) in order to create a new product. You borrow the money against future earnings on that product. You are now deeply in debt with no immediate way to repay that money.

    • antenociti

      I mean how do you manage to get into a situation of owing a supplier 250k,

      Easily, if you dont sit down and do some proper financial planning that isnt based upon future revenue being the source of both new product funding and all other operating expenses.

      Trebly so with plastic as the up-front investment is orders of magnitude higher than metal or resin and the return less certain, particularly over the short-term.

      Even dumping product into a substantial distribution chain isnt a guarentee of ongoing sales, so plastics are high-risk.