Fusion Garage Fired By Its Lawyers

News broke yesterday that Fusion Garage was fired by its PR firm, its website is offline and customers are pissed off that they haven’t received their orders. This is the company that we worked with for a year on the CrunchPad project, and eventually defrauded us.

Here’s more – the law firm representing Fusion Garage in the lawsuit with us (well, now it’s with Aol), Quinn Emanuel, has requested permission from the court to withdraw as counsel. From the filing on December 13:

2. Quinn Emanuel seeks leave to withdraw as counsel of record for Defendant Fusion Garage PTE. Ltd. (“Fusion Garage”) because Fusion Garage’s non-payment of attorneys’ fees and associated costs and a breakdown of the attorney-client relationship have made it unreasonably difficult, if not impossible, for Quinn Emanuel to continue to adequately and properly represent Fusion Garage in this matter.
3. Fusion Garage has not paid Quinn Emanuel for services rendered and the costs associated with those services for several months. During that time, Quinn Emanuel has acted on behalf of Fusion Garage by seeking discovery from Plaintiffs, responding to written discovery propounded by Plaintiffs, conducting third party discovery (including a deposition of Keith Teare), engaging in lengthy and protracted settlement negotiations, and preparing a motion to compel that is scheduled to be heard on January 3, 2012, among other tasks that cannot be disclosed on grounds of privilege and work product.
4. Fusion Garage and Quinn Emanuel have had a breakdown in communication that Quinn Emanuel can more fully explain to the Court in camera if requested by the Court. The circumstances have placed Quinn Emanuel in a position where it can no longer provide effective representation to Fusion Garage.
5. On numerous occasions (at least on November 25, 2011, December 1, 2011, December 2, 2011, December 8, 2011, and December 12, 2011), I informed Fusion Garage either orally or in writing that Quinn Emanuel would resign as counsel for Fusion Garage and would seek leave of court to withdraw from this case, and that Fusion Garage needed to retain new counsel.

Fusion Garage finally destroying itself certainly makes me happy. The fact that Quinn Emanuel and PR firm McGrath Power, who advised Fusion Garage on the right way to execute on the fraud, are left with unpaid bills also makes me happy. I’m sorry to the customers who tried to pre-order these things and may never see their money again. But, really, what were you thinking?

I’ll write more about this later, and how this failed relationship fundamentally changed my thinking on business partnerships. But for now, just die Fusion Garage. And slink away in shame, because it sure doesn’t look like you’re going to end this the honorable way.

29 thoughts on “Fusion Garage Fired By Its Lawyers

  1. Paul says:

    Oh the tears taste so sweet.

  2. It’s nice to see karma works its magic.

  3. … Mike, would it be an “UncrunchedPad” in the future?
    The space is really crowded now but the old TC still has many, many fans — and now that AOL/TechCrunch is bleeding towards its sure demise…

  4. Edward Chik says:

    Sounds like the end to a really unhealthy relationship.

  5. irsh says:

    Root cause to all this – Chandrasekar Rathakrishnan – THE WORST PIECE OF CRUD IF I EVER KNEW ONE. The guy is worth less than the dog pile that I stepped on last week. Mike – destroy this guy for me PLEASE !!!!!!!!!!! He was hero worshipped by Mike a year ago as this boy wonder who will make billions with his ideas. THE GUY IS A DELUSIONAL FRAUD !!!!!!!! Mike – never hero worship people and respect age. Young guys who move up quick with no failures and who look like angels = greed + fraud.

  6. irsh says:

    FYI – just so that people know. Chandra made away with over 200k of cash and is now in Singapore living it large with nice cars, girls and clubs. Im sure he is coming up with his next ponzi scheme idea ! Ill definitely be giving him my money !!!! Just like Mike !!

  7. Chuan Tsay says:

    Chandra Rathakrishnan deserves to rot in hell.

  8. kosso says:

    Ah.. sweet schadenfreude.

    schadenfusion

  9. eak4 says:

    Please do write about how it changed your perspective on business partnerships, Mike. That’s one of the things I was always curious about. I assumed that since you were a lawyer, had been in business/tech for awhile, and had seen so much, that you’d have deals and partnerships on lock. But clearly, even experience can’t help you anticipate certain things.

    Tl;dr I’d love to know the partnership side of that fell apart.

  10. -

    with or without this sue, the FG tablets are not so good to have a future

    -

  11. -

    I’ll be VERY happy if, someday, the same will happen to Google that has “freely used” one of MY best ideas … :)

    http://www.ghostnasa.com/posts/008moonprize.html

    -

  12. Alvin Swami says:

    “I’m sorry to the customers who tried to pre-order these things and may never see their money again. But, really, what were you thinking?”

    The real question is what were you thinking trying to partner up with these guys?

  13. Good riddance. They fucked up what was a pretty good vision.

  14. Richard Jones says:

    I dont see this as Karma. Honestly did anyone think this company had the financial wherewithal to compete where others with large balance sheets (HP Dell etc.) failed. With the TechCrunch on board, Fusion Garage would have had some relevance and maybe grabbed some market share but with Arrington pushing the product whom in their right mind would send these people their money. This isnt Karma just inevitability.

  15. Richard Jones says:

    That should have said “without Arrington”

  16. Sashi says:

    Mike, you must count your blessings that you didn’t do a Crunchpad, after all. And for that, in a twisted way, you must thank these guys at Con Fusion LOL

    @chimala

  17. George says:

    “I’m sorry to the customers who tried to pre-order these things and may never see their money again. But, really, what were you thinking?”

    Mike, couldn’t your own experience with Fusion Garage deserve the same treatment you give to their customers? (And if so, would you still feel the same way about them?) It could be argued that, as somebody who is expected to be knowledgeable about the corporate world, you should’ve been able to tell a business partner from a gang of con artists…

  18. No One Cares. says:

    No one cares.

  19. -

    now the FG site is online again and some comments on Engadget suggest FG to contact M$ …

    -

  20. tfaulk says:

    I’m sorry but the last two posts are delusional retellings of the story: 1) If Fusion Garage was such a clusterfck, the CrunchPad was never going to be a success and you deserve just as much blame for ever doing business with these clowns — particularly as it looks like most of the business was conducted on the back of napkins and with handshakes. 2) Everyone outside of TC predicted that TC would lose autonomy under AOL, that AOL would be looking for bigger media buys which would shift the power away from your little camp, and that everyone would be forced to flee.

    I don’t see how the majority of the blame doesn’t fall into your lap. (And, oh, you still got paid.) Both bits of sour grapes seem to ignore that they began with your poor decision making.

  21. Heath Uhlmann says:

    Did the guy ever explicitly lay out his grievance with Arrington and his perceived failure to fulfill his end of the marketing deal?

    What exactly did Mike promise the guy other than office space?

  22. I’ve been in similar situations. It happens in business. What’s important is that you’re not a participant, that you stay ethically true, so even if you lose money you can look at yourself in the mirror.

    Being able to do that is worth more to me than all the money in the world.

  23. baracka mike says:

    Mike – the elephant in the room with this issue, is WTF did you enter into an agreement without proper legal paperwork in place. Dude.. amateur night. It’s your own frgging fault.
    Business 101. Draw up contracts u moron!!

  24. elo says:

    The most amazing thing about this whole story is that you Mike knows the truth and there’s someone else too who knows the truth :) guess who

    but well…lying to yourself is an easy short-term thing

  25. Eric Eldon says:

    Isn’t Quinn Emanuel the same firm that represented the Winklevoss twins (before accidentally leaking the Facebook settlement terms and getting sued by the bros, that is).

    http://techcrunch.com/2009/02/10/law-firm-blunder-reveals-value-of-facebookconnectu-settlement-65-million/

    This makes it 0/2 in picking the right founders to back.

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