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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.
