Hello everyone,
I'm a lurker here but have been registered for 6 years and have been reading this site long before that. I read this site often and have learned a lot from the posters here.
I also have some expertise in debtor/creditor laws including bankruptcy, and since I can finally comment on something here where I have knowledge, I will! For the purposes of this post I'll assume Dan is being truthful (and I believe he is).
What Dan has done will likely benefit the creditors of the former RAM Controls entity and the retro arcade community as a whole. Dan's other option would have been to obtain a judgment and seize assets on that judgment, then selling the assets at auction or through a broker for pennies on the dollar. If there were other registered creditors, they would have shared in the proceeds of the sale of those assets. Those that were owed money but whom didn't sue and obtain judgment would have gotten nothing. The know-how generated by Dave would have been lost. I suspect Dan had a judgement or was close to getting one. I say that because having read all the posts about RAM Controls over the years its clear Dave only acted when forced to do so, and for Dan to achieve what he has, he needed Dave's cooperation. Dave probably cooperated once faced with real consequences instead of internet threats. That's just a guess though.
The creditors of the old RAM Controls have the same rights against that legal entity as they do now. Dan will have transferred the assets of the old RAM Controls into a new corporate entity which is legally free from the debts racked up under Dave's control. As Dan stated, if you think you can get money out of Dave, go for it, but its like getting money out of a turnip, to use his words. I would add that to get a judgment against Dave personally instead of his legal entity requires you to prove fraud, and while it seems there may have been fraud here, the bar is set high to prove that and its generally a hassle.
Dan appears to have been of the view that the value of the assets as an ongoing business were greater than the value of the assets breaking them up. I think he's right, but it takes a lot of work to make the business work.
Dan can legally refuse to satisfy any and every creditor of the former RAM Controls entity. He has chosen an alternative route, which is to try to salvage the reputation of RAM Controls by paying the creditors based upon profits from ongoing sales. That's more than most would do.
Some in this thread are suggesting that Dan should take out a loan (or dip into his bank account), pay all the creditors up front, then carry on the business. I suggest that is financially foolish, and were that Dan's only option, he would have simply obtained judgment, got a partial refund from the sale of assets, and walked away having learned a lesson like others have. He's instead tried to make himself whole and in the process is trying to make the other creditors whole too.
He's making the best of a bad situation, and he should be encouraged not piled upon. I've read complaints about RAM Controls for years and how people are going to sue him and make him act, but the only person who really achieved anything is Dan. He deserves credit for taking action and not just complaining.
Well done Dan, I hope it works out for you.