Prenda
A couple of short questions about the status of Prenda Law
My bet is that Prenda is being abandoned. I will be really surprised if this corporation is ever reinstated. The very timing of the new LLC coming into the game (exactly when Prenda loses its standing) suggests that “Anti-Piracy Law Group” is meant to be a replacement, not an entirely new structure. Prenda’s “not good” status is most likely a result of failing to file the annual report that was due on October 31.
The first question:
Why anyone wants to abandon the company that is not bankrupt, that has a nice positive settlement cash flow, not being sued etc.? Only crooks need machinations like this to operate.
(The last phrase was meant to play along with “Bittorent Betty,” in a desperate hope that she will retweet this question.)
While there might be legitimate (not necessarily ethical) reasons for the shuffle, Prenda’s current status dictates a couple of practical questions, irrelevant to the “why” asked above. I am ignorant in the part of the law that deals with corporations, and I do not know Illinois regulations either. I have no desire to do a research, yet my intuition tells me that asking these, maybe naïve, questions, can convey important information to attorneys, and through them, to judges:
Can a company that is not in good standing file and/or maintain lawsuits for their real and fictional clients?
Would a contract signed while a company was not in good standing, be valid? If settlement agreements were made between Prenda and alleged infringers after November 1st, would they be binding?
Knowing John Steele’s hubris, narcissism and permanent (and false) sense of invincibility, I am more than sure that court filings under the “Prenda” name were made during the period in question. Also, I’m sure that some folks settled with Prenda after November 1st.
Actually, I know one tidbit that is not a question: if someone wants to sue Paul Duffy for Prenda-related activities, it is a perfect time to do it now: he will be on the hook personally, cannot be shielded by a corporation that is not in good standing (even if it is later reinstated).
Thanks to TAD and Raul for the thoughts and expertise that led to these questions.
Update
2/17/2013
Prenda might be coming back on the header of the letters. According to the IL Secretary of State website, Prenda is back in good standing.
They filed their report on 02/06/2013 and paid the $47 for the certificate.
Fight © Trolls 
Too many of the marks were Googling “Prenda” and discovering what assclowns they are. Not good for business. Am I the only one wondering if they plan to keep on changing their skin every year, just as the annual report comes due?
The LLC corp reporting requirements for Illinois appear to be minimal, though an up-to-date listing of managers/members is required. The $300 late fee is less than pocket change for Steele. The goal may to evade something else.
An Illinois LLC corporation with no report after 180 days is “administratively dissolved”. This may be one way Prenda gang members hope to dodge responsibility.
(“Prenda had to dissolve because of a clerical error, your honor. We had to find new work at we-pretenda-to-fight-piracy, your honor. We’re a new group that has nothing to do with that Prenda stuff. We need time to get up to speed, your honor.”)
http://www.cyberdriveillinois.com/departments/business_services/organization/llc_instructions.html
Oh he’s evading something, like showing the State of Illinois his annual report, which includes all kinds of goodies he doesn’t want anyone to see.
Judges know that legitimate businesses do not just let their charters lapse for failure to file an annual report, then just incorporate at the exact same address using a different name, and send out (demand) letters using contact info carried over from the old firm (wefightpiracy.com) etc. The fact that they’re even within that time window is problematic for Duffy since if the firm entered into a contractual agreement with a client during that time period, wait, nevermind, smut peddlers aren’t gonna sue Prenda over this. This is just fucked up because it’s not as cut-and-dry as we thought since it’s a law firm. An attorney is apparently just the intermediary (which we all know is total fucking bullshit) and client calls the shots, so, yeah. It was Lutz’s job to file the annual report. They can just say “Well our registered agent didn’t file the annual report” but I bet Scriven will love that one since Lutz stood in front of her and lied to her while under oath.
I had the same thought. There has to be a reason they keep changing their name. Personally, if they keep changing their name to avoid criminal liability, that’s dumb. Any judge would see through the name changes. It needs to be for some kind of administrative reason, such as reporting. Even for purpose of sheltering against civil liability, it wouldn’t work. “Your honor, it wasn’t us. It was the Prenda Law Inc. entity that did it.”
Further making my head spin because they could do, well, anything, and it wouldn’t shield them from a lawsuit or criminal charges since Duffy still is acting as an agent of Prenda. He hasn’t even substituted himself. Why create a new law firm then not substitute yourself out for the old one and back in for the new one? It doesn’t make any sense. They’re sending out demand letters on behalf of “The Anti-Piracy Law Group” even though the attorneys for the clients are agents of Prenda, not this new abomination.
They’ve been raking in A TON of money over the past year, I don’t think Duffy wants the State to see its financials nor its tax returns. Tax returns are unavoidable unless Duffy wants to go to state prison and the prisons here aren’t nice, I live near one heh.
Are they not being sued in a class action suit in Kentucky still?
“…of the new LCC coming…”
I think you meant to say “LLC”. 🙂
Yes. Indeed. Thank you.
Also, most often a company’s status has to do with their tax and/or financial obligations to the state division of taxation. For example, they may not have filed an annual report, filed quarterly taxes, or not paid other tax liabilities. The state unfortunately does not change the status of the company if they are a bunch of scum-sucking psychotic megalomaniacs.
Not filing an annual report would be my best guess since the good standing was pulled almost immediately after Prenda’s annual report was due. Who knows, might’ve not paid taxes either which actually would not surprise me. Prenda is C corp and Duffy is the principal, the new one’s an LLC (gotta be a reason they incorporated an LLC rather than a C corp), Duffy is member and this character named Jeffrey Livingston (I have no idea who the hell this man is other than I believe he resides or works in Des Plaines) is the registered agent.
A C corp is subject to double-taxation: Taxes are paid by the corporation at the corporate tax rate, and then distributions to the shareholders is again taxed at the capital gains rate (in this case, short-term capital gains).
Creating an LLC means the company’s income is only taxed once at the rate of the shareholders/partners/principle’s personal tax rate.