DEN planned its IPO for the fall of '99, when the Nasdaq's technology stocks were white-hot and the startups that issued them were all but minting money. But an episode from Marc Collins-Rector's past came back to haunt him.

Earlier that year, a lawyer named Walter Timpone had filed a lawsuit in U.S. District Court in Trenton, New Jersey, on behalf of a young male client. The suit alleged that Collins-Rector, while he was CEO of Concentric Research, had flown the boy back and forth to Michigan for the purpose of having sex with him; the boy was 13 years old at the time.

As fate would have it, Collins-Rector was served with the papers only days before the IPO plans were made public. Though he and DEN announced several weeks later that the lawsuit had been settled out of court, the IPO was canceled, and not long afterward Collins-Rector, Shackley, and Pierce left DEN. This being the dot-com world, DEN for a while managed to survive even this disaster. For one thing, the employees seemed to take it in stride when the head of their company -- a company that catered to a young audience -- was branded as an alleged pedophile. A board member made it clear that management, too, was unconcerned, more interested in money than in morals. Marc Nathanson, who sat on DEN's board of directors, told the Los Angeles Times: "Who people date is none of the board's business."

Daniel S., meanwhile, was spiraling downward fast. After he quit DEN in the fall of '99, his grades had plummeted, and his mood had guttered. He became sullen, uncommunicative, and unspeakably unhappy. At one point, at his parents' home in Upland, the boy sat down to write a suicide note. Daniel's brother came across the note and, fearful for Daniel's life, confronted him about it. And that was when Daniel told his brother -- and soon after that, a lawyer -- about his time at DEN.

"He had nobody that he could go to," says Daniel's attorney, Brian Brandt. "He couldn't tell anybody in his family what had happened to him. He couldn't tell his friends; they would say he was, quote unquote, 'a fag.' He'd be ridiculed out of his social circles. He was going to kill himself."

The story that came tumbling out forms the basis of a legal complaint that Brandt filed on Daniel's behalf this June, in L.A. County Superior Court in Van Nuys. According to the complaint, Daniel was fondled by Collins-Rector, then forced to perform sex with him and Shackley. Daniel claims, too, that he was put on a steady diet of Valium, Vicodin, Xanax, Percocet, Ecstasy, pot, and other drugs to keep him subdued and malleable. "He was heavily drugged," Brandt says, "to the point where he couldn't make his own decisions."

Daniel's complaint says that Collins-Rector hired private jets and took Daniel and Shackley to Puerto Rico, Florida, Hawaii, Las Vegas, and New York. Other young boys allegedly filled the hotel suites that Collins-Rector rented. The complaint also charges that limos were sent to Daniel's home to fetch him to Encino, where Collins-Rector encouraged him to spend all of his Friday nights, and that for about a year Collins-Rector and Shackley "engaged in various forms of sexual abuse on plaintiff, including fellatio and sodomy."

Daniel says that after he eventually had sex with Collins-Rector, he was passed along to Shackley. The two bought him Versace suits on Rodeo Drive in Beverly Hills; they made cars available to him.

"This kid isn't even gay," Brandt says. "I don't know if he'd even kissed a girl before he met these people. He didn't want this."

Still, the warning signs may have been there all along. Says Brandt: "Collins-Rector mentioned to him on some occasions while he was doing the film job, he said a kind of cryptic, 'You need to learn how to play the game.' He mentioned that on several occasions. My client didn't really think much of it at the time. He wasn't sure what he was talking about." Daniel may have been too inexperienced to sense the trouble he was heading into but was impressed with Collins-Rector's glamorous world, says Brandt: "[Daniel] was a kid from a lower-middle-class background, thrust into this lifestyle of wealth. He was starstruck by the whole environment. He says it was like a dream."

Collins-Rector, Shackley, and Pierce have not filed a response to Daniel's complaint. Their former lawyer, Ronald Palmieri -- who has stopped returning phone calls to his Brentwood office on the subject of DEN -- has said he has no idea of their whereabouts.

In the wake of Collins-Rector's departure, DEN's investors started to pay closer attention to the inner workings of the company, seemingly for the first time. Chase Capital Partners, a major VC firm, managed to secure a new round of funding -- $24 million -- but the price was stiff. DEN replaced its management team, cut its staff in half, and slashed the salaries of the 150 or so employees who remained.

Employees began to leave the company, though few cite the founders' behavior as the reason. "With everyone there, it was like, 'I'm going to make as much as I can, and I'm going to leave in eight months and start my own company,'" remembers Matt Welch, a former freelance consultant for DEN who says that he himself stopped working for the company because of professional frustration even before the scandal broke.

Through the spring of this year, the diminished staff did its best to keep DEN up and running as resources and morale evaporated. And then the end came.

"We just ran out of money," DEN's last CEO, Greg Carpenter, told his remaining staff on May 12. After the tech-stock meltdown of March and April, there were no other investors willing to shoulder the financial risk that DEN represented. "I had a page from a friend," Amalia Terrazas recalls. "I had left for home. They had this meeting, and all of a sudden, it was over....They put out the light."

DEN went dark in May and formally filed for bankruptcy protection in June. Even discounting the salaries of its founders and the upkeep on the mansion in Encino, the company was an expensive proposition. Though it budgeted production costs of $30,000 for each six-minute segment of its entertainment series, the actual costs were sometimes closer to $110,000. It had also negotiated a special Web contract with the Screen Actors Guild (which now has legal claims against the company). The software company Macromedia alleges that DEN helped make ends meet by illegally pirating its software. In fact, even though DEN raised a total of $65 million over the course of its existence, the bankruptcy papers list as potential assets a number of planned lawsuits against former executives (including Shackley and Pierce) on grounds that they were illegally using copyrighted material.

The bankruptcy trustee has not yet had time to weigh the suits' merit. "We'll certainly consider whether each of these is worth considering," says Richard Diamond, an attorney for the trustee, in the world-weary voice of a man who has been called in to clean out the dot-com version of the Augean stables.

As their former lawyer points out, Marc Collins-Rector, Chad Shackley, and Brock Pierce have vanished. Like old-time grifters who drifted from town to town on the railroad, they have simply packed up their sample cases and gone away. Rumors circulating in L.A. have placed them in France, in Mexico, in Malaysia. Recently, according to the Los Angeles Times, the three men incorporated an Internet company in the British Virgin Islands. Though the agency delined to comment, the Federal Bureau of Investigation is now reportedly looking into some of the allegations against DEN's founders. Back in the fall of 1998, ownership of the mansion in Encino was transferred to a pair of trusts -- one controlled by Collins-Rector; the other, by Shackley -- a move that Brian Brandt suspects was designed to shelter the property from any potential tort judgments. But on May 31, the trusts sold the house back to the two men as individuals, though encumbered by a $4.2 million mortgage. The timing of this seemingly nonsensical deal, which roughly coincides with the three founders' disappearance, suggests that they milked the property for every penny they could make liquid before leaving town. The upshot is that if any of the plaintiffs or creditors prevail in civil litigation, they're unlikely to get so much as a dime.

Look on the Web, and except for the news articles recounting DEN's pyrotechnic rise and fall, you won't see many traces of the company there, either. Nevertheless, its alumni have spread out to other firms, and many of them are determined to keep the dream alive. "The Web is the place where people want to go to see what they can't see on TV," says Craig Caryl, the former DEN production head, summing up what was once the company's central tenet. "The day is coming."

Indeed, with broadband transmission and improved technology, the new world of Web entertainment may kill the boob tube zombie after all. If it does, the many talented people who tried to make DEN work will still be leading the revolution. "DEN wasn't a place; DEN was the people who made it up," says Terrazas. "Those people are all over the place now. And we love Web entertainment....We love it, love it, love it."

Michael Ryan is a two-time Emmy-nominated director who has written for Life, GQ, and People.

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