The Queen May Be Out of It, But Long Live the King! (A new MIGS thread.)

As usual, I am not prepared to reach conclusions, but in the spirit of res ipsa loquitor a revealing new document has just become available that leaves lots of room for some fun speculation . . .

One of the wonderful things about Florida is that the state posts corporate filings on the Internet, including graphic images of the original forms. As it turns out, two weeks ago DEGREE.COM has filed its 2001 "Uniform Business Report" (UBR), which updates their original filing as a foreign (Nevada-based) limited liability company doing business in Florida. Both documents are available at:
http://corimg.dos.state.fl.us/cgi-bin/corpwimg.exe?TABLE=COR&DOC=M00000000434

(They are "TIFF" files. If you have Windows 95 or better, the reader is already installed on your computer.)

Anyway, unlike the earlier filings in Nevada and Florida, the UBR actually lists the members of the limited liability company. (Pardon me while I gleefully sit back and laugh for a moment . . . There, that's better.)

And they are:

1. "William Danzig, GP-Member, Oxbridge Limited Partnership," who lists the address at which both his and Sheila's phone numbers are listed, as wella as the local phone number of MIGS;

2. "Member - Josh Bennett," who lists an address in Hollywood, FL (interesting since his web site lists his office addresses in Fort Lauderdale - the same address as MIGS "administrative office" - and Miami); and

3. "Member - Enrique Serna," who lists his address as P.O. Box 112834, Miami, FL 33111, the same address listed as Josh Bennett's on the original Nevada filing.

Unlike the previous Nevada and Florida filings, both of which were signed by Josh Bennet, the new UBR is hand signed, "William Danzig, Manager."

Okay, campers, keeping in mind that we cannot draw conclusions, let's do some fun speculating about what I will call fantasy possibilities . . .

First, a "limited partnership" is a group of investors often centered on one project. For example, some folks get together to invest in an office building, apartment building, or shopping center. They form a limited partnership (as opposed to a corporation) to act as the single entity for their investment.

Bill Danzig listed his role as "GP-Member;" GP for "General Partner," in this case of the Oxbridge Limited Partnership. No filing is online for Oxbridge, but think about the name for a moment . . . possibly a combination of Ox(ford) and (Cam)bridge. Get it? (Thank you . . . You may join me in the laughter.) Even though he lists himself as a member, he signs the form as "Manager" of DEGREE.COM, LLC. (Remember, from previous posts, that an LLC may have managers or members? Good! There will be a quiz on this at the end of class.)

Now, notice that Enrique Serna is listed as a member. But not at his usual address in Texas - instead, at the same address in Florida as the post office box belonging to Josh Bennett and used on the original Nevada filing. (Josh and Enrique at the same address? As Arsenio Hall used to say, that almost makes you wanna sit back and say, "Hmmmmmmmmmmmm . . ." But that would be too funny to be true.)

So, kids, what's missing from this picture? The answer should be obvious: Sheila! But what is in the picture? Bill! (Hence the subject line for this new thread.)

And that opens up a realm of fantasy possibilities, as well as a slew of questions . . . Namely, was Sheila the brains, or the money, behind MIGS? Or was it Bill? Could MIGS be something that he funded (potentially along with other investors who formed the Oxbridge Limited Partnership) for the little woman so she could have her own new little business? (I realize that's a sexist concept, but thing like that do happpen.) And was she given the left foot of fellowship because the school has been tainted by (1) the pervasive advertising on questionable web sites owned or associated with her, including freeresearch.com and sexiest.org, and (2) her doctorate from American Coastline University, a degree mill, the mention of which was conveniently left off the MIGS web site when she was listed as a member of the board of trustees?

The answer to all of the above is . . . I don't know. Indeed, it would be inappropriate, indeed a legal cause of action, to submit that any of these ideas are true. So I'm not. But it is not a cause of action to speculate on possibilities in the name of satire and fantasy. And, should the lawsuit continue, the answers would certainly come out during the discovery and trial phases.

So, in light of this new information, I invite anyone else to invent their own, um, possibilities and fantasies. ;D (Just make sure you do not commit libel by purporting them to be fact, or you might find yourself joining me in court as a co-defendant at some point.)

 

It's been many years since I took my intro to business law course. I do remember that one of these things can have two classes of partners. Steve calls them 'managers' and 'members', though I seem to remember 'general partners' and 'limited partners'.

But the point I am getting at is that the general partner has management powers over the partnership that the limited partners don't. (He also has more liability for debts, I believe, although I don't recall the details of this stuff.)

So, if MIGS is a creature of Degree.com, and if William Danzig is Degree.com's managing general partner, then it seems reasonable to ask whether he is the one that legally calls the shots at MIGS.

Which raises the question: where do MIGS' *board of trustees* fit into this equation? Do they merely serve at Mr. Danzig's pleasure? Can he ignore their decisions or even hire and fire them at will? (At least those that aren't partners/members in their own right?)

I'm reminded of the Oakland Raiders. I believe that they are an LLC-type organization. Al Davis is usually referred to as the Raiders' "owner", but in reality he is their "managing general partner". The Raiders have a nice organizational chart, with a team president, director of player personnel, head coach and everything. But they all serve at Al's pleasure. If Al wants to draft player X, it doesn't matter what the organization thinks. If Al wants to call plays from the owner's box, he can (and occasionally does.)

So... who calls the plays at MIGS?

 

That is often the case in a limited partnership. However, remember that DEGREE.COM is a limited liability corporation; the limited partnership is Oxbridge, which Bill Danzig referenced when he listed himself on the DEGREE.COM form.

MIGS is a creature of DEGREE.COM according to the lawsuit (which refers to "DEGREE.COM a/k/a Monterrey Institute . . ."). However, remember the difference between DEGREE.COM and Oxbridge. Danzig is the "General Partner" of Oxbridge, but he is the "Manager" of DEGREE.COM. In other words, according to the Florida form, Oxbridge refers to Danzig, not to DEGREE.COM. (There may or may not be an association between the two entities, but that is not evident from the Florida filing itself.)

Good illustration, Bill, which may or may not be applicable here. (That would be speculation at this point.) As for where the trustees fit in as a board, I have this fantasy of one or more people standing above the stage singing, "The Lonely Goatherd" (from The Sound of Music) while manipulating the puppets below them on the stage. Again, I stress that is a fantasy, although I've been tempted to send a pair of scissors (for cutting strings) to someone in California. (Sorry, campers, I realize that's an inside joke, but those of you who have followed the lawsuit saga will get it.)

A good question, indeed. Again, we can speculate on possibilities, but the answers are unknown . . . unless, of course, the lawsuit proceeds to discovery and trial. And then, the entire world will know those answers. Ain't it a hoot?

(Nte to newbies: If you have not been following the MIGS lawsuit, you can find out about it at http://www.angelfire.com/pa4/levicoff.)

 

OK. It seems that I am confusing a limited partnership and a limited liability company.

So let me ask Steve or any of you MBA-types out there: in an LLC, what is the distinction between a 'manager' and a 'member'? Does it more or less parallel the distinction between a 'general partner' and a 'limited partner' in a limited partnership? In particular, does a 'manager' really have management powers that a 'member' doesn't? How does this work?

In this case at hand, the question boils down to whether control over Degree.com is in Mr. Danzig's hands, or whether it is distributed among the Danzig-Bennett-Serna triumvirate.

Speaking of triumvirates, it looks like we now have three different theories about who controls MIGS:

1. There's the Rich Douglas contention that MIGS is a branch of CEU. That implies that CEU exercises some kind of management authority over MIGS.

2. There is the suggestion that MIGS is self-governing, managed by its own independent board of trustees.

3. There is this Degree.com LLC and its three members, of which Mr. Danzig is "GP" and "Manager", whatever that implies.

So returning to my Oakland Raider analogy, we seem to have CEU, the trustees and Degree.com all sending in plays to MIGS at the same time:

CEU... keep kicking the football around without scoring and play for overtime, when you can win on penalty kicks!

Trustees... sit down on the field, close your eyes and imagine the most wonderful incredible idealistic play that you can think of!

Degree.com... have each player sell another player a fake football, then let them all run around in circles until they fall down!

And with skeptics like me going berserk in the "Black Hole", with our faces painted in black and silver Halloween makeup, screaming for their heads...

Kinda like "Gladiator"... thumbs down...

 

I am not a lawyer; I don’t even play one on TV. That having been said, IIRC, the advantage of being a limited partner in a limited partnership is limited liability. The general partner who manages the business, however, is subject to unlimited liability. Each limited partnership must have a general partner and limited partners can lose their limited liability if they participate in running the business. Moreover, LLP partners are fully liable for their own negligence and do not receive limited liability for the wrongful acts of those they supervise and control. This disadvantage does not exist in a limited liability company (LLC); the members may actively participate in running the business and still enjoy limited liability protection.

A LLC is a form of limited partnership, a legal entity with authority to conduct business in its own name. The principle difference is that the owners and managers are not personally liable for the debts and obligations of the entity. Management of the LLC is vested in its owners that are known as members. The management structure is created in the operating agreement (equivalent to the bylaws of a corporation or a partnership agreement), and may state that the company is to be member managed. Frequently, however, members delegate authority to run the entity to managers who may or may not be required to be members of the LLC. The operating agreement need not be in writing. All amendments must be unanimous unless otherwise agreed to by the members. And, (this is a good one) oral amendments may modify even written terms unless otherwise set forth in the operating agreement.
So, in summation, a manager in a LLC is engaged in actively running the business. He or she may or may not be a member, but certainly serves at the members’ pleasure. Therefore, it does not parallel the distinction between a general partner (GP) and a limited partner in a limited partnership. In a LLC everyone has limited liability. A manager in a LLC may very well have management powers that a member (especially one who does not actively participate in the running of the business) does not have.
All of this leaves us with a few interesting questions:
1. What precisely is the nature of CEU to MIGS? Is MIGS a division of CEU as some have contended, or is it simply a contractual relationship? If MIGS is a division, why doesn’t CEU appear on any of the documentation exposed to date, including the lawsuit filed by Degree.com, L.L.C. against Steve Levicoff? Why does the lawsuit refer to MIGS as an A/K/A of Degree.com, L.L.C.? How is an A/K/A established? Is it similar to a d.b.a. (doing business as), which in Florida is usually accomplished by registering the use of a fictitious name with the Department of State, Division of Corporations? (At the present time, I am unable to verify if Degree.com, L.L.C. has filed for use of a fictitious name because the Division of Corporations’ Web site states the inquiry system will be unavailable between 5pm Friday (3/2) and 8am Monday (3/5) and 5pm Friday (3/9) and 8am Monday (3/12) due to system maintenance.)
2. What, precisely, is the meaning of the listing of “William Danzig, GP-Member, Oxbridge Limited Partnership” as a member in the UBR (Uniform Business Report) for Degree.com, L.L.C. filed 01/23/01? It appears that “William Danzig, GP-member” is listed as a title (although the choices are only managing member and member), while the name of the member (owner) is “Oxbridge Limited Partnership” The form states that a managing member, manager, or authorized representative must sign it (as if under oath). The title next to William Danzig’s signature is that of manager, not managing member, as an owner who is also managing the business would appear. Could it be that it is “Oxbridge Limited Partnership” that is one of the members (owners) of Degree.com, L.L.C., and William Danzig appears solely as General Partner of Oxbridge Limited Partnership? If this is not the case, then why does Oxbridge Limited Partnership appear on the filing at all? And what of the designation GP-member? LLC’s do not have General Partners, but Limited Partnerships require them. Moreover, partnerships, corporations, and foreign investors may be owners of an LLC. If Oxbridge Limited Partnership is one of the owners of Degree.com, L.L.C. A/K/A MIGS, then who are the partners in Oxbridge Limited Partnership?
Every time new information comes to light, it raises more questions than it answers.

 

My apologies to all for the formatting of my previous post, so much for cutting and pasting! Perhaps a preview screen, or a means of editing a posted message would be a good addition to the board. For the sake of readability I will be glad to repost the message, if one of the moderators would be so kind as to delete the first post. Please advise.