Replacement paper for Azo

[Donald Miller]

Donald, first you have my sympathies for the money lost. Having said that, these cases aren't relevant because there is no promise of a return. Howey involved people purchasing orange groves, cultivating them and receiving a promised return. Purchasers were offered a contract for the land AND a service contract from one of their subsidiaries. Moreover, the court found that those investors were people who invested because they EXPECTED a return on investment. To quote from the case:

The transactions in this case clearly involve investment contracts as so defined. The respondent companies are offering something more than fee simple interests in land, something different from a farm or orchard coupled with management services. They are offering an opportunity to contribute money and to share in the profits of a large citrus fruit enterprise managed and partly owned by respondents. They are offering this opportunity to persons who reside in distant localities and who lack the equipment and experience requisite to the cultivation, harvesting and marketing of the citrus products. Such persons have no desire to occupy the land or to develop it themselves; they are attracted solely by the prospects of a return on their investment.

"Share in the profits" is critical here as is a failure to meet the definition of a security for sale as found in footnote 3 of the case. Michael has never offered anyone a share of the profits hence there is no ROI. And an expected ROI is critical in this case. It's the difference between going down to your local store and buying a book and going to a meeting and buying into an oil well. Different laws will apply. No one is buying Azo with the intent on making money from reselling the paper (at least not before printing their images on it). The Azo deal is merely a sale of goods, nothing more.

One disclaimer, because I am at home today I am unable to shepardize this case so I am relying on your observation that it has not been overturned.



Yes, it does give us a view. Without the representation of an ROI or demonstration of a security offered I'd bet on Michael any day of the week in this case. The language of investment has always been yours.

Donald, I've received some PMs from fellow APUGers (non-Azo users at that) who have been on this list longer than I and I now know more about your antipathy with Michael. This is my last post in this thread. I think that it's demonstrated that your understanding of the law is is not what it should be to make the representations you have and that your motivations are not as you claim. I wish you the best in your endeavors.

Cheers, James

James,

You are taking the language of the law as expressed to the relationships of investors and applying your spin to it. You failed to regard the courts position insofar as identifying what the legal standing of the investor relationship must entail.

At any rate, I will agree to disagree with you.

 

[Donald Miller]

Donald, how is this different than pre-ordering TMY?

There is a very great distinction between the two. The first and most important is that TMY is an existing product with a long record of having been produced by Kodak.

The Azo replacement is a non entity as we speak. In fact the primary thing that one needs to view in this matter is that Michael Smith by his own words has stated that he needs the monetary contribution of others to bring this non existent paper into existence. That monetary contribution would most likely, I am sure, be viewed as a financial investment by an impartial panel.

I think that we need to be very clear about what this matter represents.

 

[Donald Miller]

Do you really, REALLY believe that this is what Michael is doing?

To answer your question, No...but I also belleve that there are proper procedures for doing things like Michael is attempting to do. The way that he is doing them is very questionable in their propriety.

 

[Donald Miller]

I think Michael Smiths comment in his last post says it all.

He is bearing the entire burden financially and from a labor aspect until a final usable salable product can be shipped, and no money will be taken from customers credit cards nor will checks be cashed until that time.

It therefore seems different to me than what Donald asserts in that the entire financial burden is on M&P and not the public. You might consider the payment and acceptance an exchange of prommisory notes rather than a form of investment. There will be no exhange of money until the product is available. That does not seem to me to be unreasonable. (except to M&Ps finances - but they are willing to do this for OUR sake)

I am all for what they are doing. I simply don't have the time, nor extra cash or I would be placing a large order myself! I am putting all of my resources into a similar type project - namely, those workshops of mine. I can speak from that standpoint and say that it is a huge financial drain and takes a lot of labor. I can sympathize with their trials and tribulations and again wish them all of the best.

I might add that it would be nice someday to see an exact scientific comparison of this new Azo paper with the old Azo paper for each and every photographic parameter so that we can all see where or even if they differ from each other.

PE

PE,

I think that what you propose is very good. I am saddened to say, however, that Michael Smith has publically stated that he needs the infusion of outside financial support to bring this paper into being. That does not speak to me as being totally funded by Michael Smith. It does speak to me of an investor relationship...regardless what Michael Smith wants to call this "Sows ear"

Michael is relying on outside financial contributions for his endeavor...call them what you may.

I would applaud Michael for doing this with a more proper procedure involving financing arranged by Michael to totally fund his idea. Not relying on a group of people spending $5,000 to $10,000 in premature purchases of a product that does not even exist as we speak.

I think that the new paper is a great idea. The manner in which this is being done smacks of used car salesmanship.

 

[c6h6o3]

I think that we need to be very clear about what this matter represents.

It's very clear to me.

INVESTMENT. The placing of capital or laying out of money in a way intended to secure income or profit from its employment. Securities & Exchange Commission v. Wickham, DC.Minn., 12 F. Supp. 245, 42, et seq.
-- Black's Law Dictionary, Fourth Edition

Does Michael's request for pre-orders promise to secure income or profit from employment of the funds gathered? No. It promises to exchange certain goods (silver chloride printing paper) and services (shipping) for the funds. And that's all.

 

[Dave Parker]

After reading 12 pages of this, I have come to a conclusion, what ever you call it, investment, pre-order, whim or fantasy, it is between Michael and the people who choose to participate, nothing more, nothing less..

Dave

 

[Donald Miller]

Emphasis added.

Donald, they are asking for pre orders of paper, how is that an investment, except for the specific amount of paper you are ordering, you are not investing in anything. There are those who really wish to see this succeed and will buy paper to support the venture, but they know that they are ordering paper.

Paul, This is an investment in a product that doesn't presently exist. In fact without the financial input of others by Michael Smith's own words as stated publically, it will not exist. That my friends is what makes this an investment.

Until they sell it to someone. There are lots of industries in the world where contract manufacturing is the norm. Most of the items that we all end up getting from China are made to spec for a US company. I don't personally think it is much different than what Ilford used to do with Freestyle. The principal difference is that the item is not yet completed and fully tested. If folks are not comfortable with MAS being able to pull this off, then they should definately not preorder paper. It really is their choice.

That is true. But there are those who either are prone to hero worship or so exuberant in their belief that this paper is going to be something that in reality has not been proven. For those people caveat emptor should be observed and applied.


Not at all. If you order $10,000 worth of paper, MAS will send you that much paper. It is paid for once and you have it. I do not expect to have some sort of future rights to paper or ownership stake in Freestyle because I buy a box of Arista paper, I expect them to send me a usable box of paper.

The point that the supporters of this endeavor fail to grasp is that it is the profits from these initial sales that are in reality the funding for the rest of the paper that is not currently sold. Thus when you order paper again, should that be the case, you will be paying again for paper that you helped bring into existence with your initial purchase. It's a sweet deal for the person that pulls it off. In the case of Freestyle and Arista you are buying a paper that a manufacturer and dealer has brought into being with their own funds or funds that they borrowed from financial lenders and not from a bunch of their customers.

In addition, if you buy one of their prints or a set of prints, that is what you are buying. You are likely encouraged to buy it because you support what they are spending the money on, but you are buying a print.

The value of their print is assigned by them...just as yours are by you and mine are by me...are those values realistic? Since Michael and Paula do not sell limited editions, the cost of a print to them is the cost of the paper, chemicals they use and their time...Let's be realistic here.

I understand Jay and others thinking that there are too many variables here and not wanting to order. I also have no problems with Jay mentioning his concerns so that others can consider them before they order. I also understand others feeling that they have enough confidence in Michael and Paula and are willing to place orders for a product that does not yet exist, since they believe that Michael and Paula will test it appropriately. What I don't get is this implication in your post here that there is some sort of questionable dealing going on. It is quite simply a pre order situation for some paper. You will get your paper or MAS will refund your money.

No, it is an investment. The thing that makes it an investment is that Michael has publically stated that he is relying on these "pre orders" in order for the paper to be brought into being. I would have no problem if Michael went out and borrowed the needed funds to see the paper into production and distribution and thereafter approached potential users of the paper for orders. But that clearly is not the case here. His attempts at creative financing leaves me cold.

Edit: Oh, and an FYI, I am not buying any paper, I do not contact print, I am not a huge fan of Michael and Paula, and I don't have enough money to consider one of their AZO editions. I have no dog in this fight, except that it is nice to think that there will be a replacement for AZO.

I agree with your sentiments about a replacement for Azo even though I do not use it. I question the methods by which Michael is operating. That includes both the investor financing and also the lack of technical verification of the qualities of the material that does not now exist.

 

[Photo Engineer]

Donald, in his own words, Michael has stated that he will not deposit checks or use anyones charge card order until the paper is a 'reality'.

Interpret that any way you wish, but I believe that he is being honest about this and will not act until the paper is just that, a 'reality'.

I prefer to think positively in this until proven otherwise. I believe that I will not be proven wrong. The paper may not be exactly 'perfect' to every single persons eye, but then all art and beauty is in the eye of the beholder. But, I trust Michaels judgement in this. I do feel that Jay has made an excellent point regarding a full suite of testing and I have advocated this myself. This will do nothing more than reduce any surprises that might be found later on.

PE

 

[Donald Miller]

Donald, in his own words, Michael has stated that he will not deposit checks or use anyones charge card order until the paper is a 'reality'.

Interpret that any way you wish, but I believe that he is being honest about this and will not act until the paper is just that, a 'reality'.

I prefer to think positively in this until proven otherwise. I believe that I will not be proven wrong. The paper may not be exactly 'perfect' to every single persons eye, but then all art and beautiy is in the eye of the beholder. But, I trust Michaels judgement in this. I do feel that Jay has made an excellent point regarding a full suite of testing and I have advocated this myself. This will do nothing more than reduce any surprises that might be found later on.

PE

PE,

As I have previously stated on several occasions, if everyone is on the same page here and they agree to it...then I will not say anything further. I would not be involved with this if I had the money and Michael Smith were Jesus Christ...

I do think that Jay's recommendations, that you concur, are the very least that should be expected.

 

[Donald Miller]

It's very clear to me.

INVESTMENT. The placing of capital or laying out of money in a way intended to secure income or profit from its employment. Securities & Exchange Commission v. Wickham, DC.Minn., 12 F. Supp. 245, 42, et seq.
-- Black's Law Dictionary, Fourth Edition

Does Michael's request for pre-orders promise to secure income or profit from employment of the funds gathered? No. It promises to exchange certain goods (silver chloride printing paper) and services (shipping) for the funds. And that's all.

"Congress' purpose in enacting the securities laws was to regulate investments, in whatever form they are made and by whatever name they are called." Reves v. Ernst & Young, 494 U. S. 56, 61 (1990).

The test for whether a particular scheme is an investment contract was established in our decision in SEC v. W. J. Howey Co., 328 U. S. 293 (1946). We look to "whether the scheme involves an investment of money in a common enterprise.

 

[Donald Miller]

I have stated my beliefs and my opinions on this matter. I can and choose not to say anything further and will not respond to any further posts by anyone on this thread.

I wish all who are or choose to become involved in this matter the very best success.

 

[Dave Parker]

I think, from what I have read, that most who are willing to pre order the product, don't seem to have to much worry about it, and again say, that is between Michael and those who pre order, if problems happen, then the problem is between Michael and those who took a chance and has nothing to do with any of us, who have not pre ordered the paper, all legal ease aside, Michael is offer to pre sell a future product, and many people are willing to purchase based on his statements, for those that don't agree with the product or don't agree with the method, then my suggestion, would be to wait and see what happens, then make your choice, I have not seen any arm twisting or such going on, just an offering of a hoped future product to replace a product that has been discontinued..I am not a smart person, but I can certainly figure this one out for myself, with out the help of others..

Dave

 

[Photo Engineer]

Dave, you are both smart and wise. That can be seen in your post.

I agree with you.

PE

 

[avandesande]

NO. ULF TMY is NOT an existing product. If the film shows up at your door and doesn't fit your 12x20 film holders, you are out of luck, period (no returns).

I guarantee you that neither Michael nor the manufacturer will let the paper leave the factory if their are coating defects or variability in the product. Weather the paper fits your vision or whatever remains to be seen.

There is a very great distinction between the two. The first and most important is that TMY is an existing product with a long record of having been produced by Kodak.

 

[Daniel Lawton]

Maybe I'm overly negative (I've been labeled so before) but if this is a preview of small startups entering the traditional photographic marketplace once the big boys die off, then I think we're all doomed. Personally I'd cut MAS a little slack. From what I can see, he is doing this largely out of ambition and good will. I know we are all accustomed to buying products with a history of quality control and backed by a 10 page spec sheet created through millions of dollars in EK or Ilford R+D, but this isn't going to be the case with someone starting a small business venture with minimal funding. Now there's no way I would spend thousands on an unknown paper, but I would buy a box or 2 and come to my own conclusions. If every contact printer buying one or two boxes isn't enough to make this venture worthwhile then I think we see the reason why Kodak killed it in the first place. Either way I too wish Michael Smith my sincere best but this whole thread will make me pray even harder for the success of Ilford!

 

[mark]

Paula and I are now teaching a workshop. All day. And beyond. I have not had time to get back to this Forum and those who say my response on the Azo Forum can readily see it is brief.

Paula and I, through the sale of our Azo Portfolio, will be putting up FAR more money for this than anyone else, or more precisely, more than everyone else combined.

A test run will be made on the coating machines. We will pay for this ourselves. No one else’s money will be used. If anyone bothered to read my announcement carefully they would have seen that we stated that no checks would be deposited and no credit cards would be charged until we needed final payment to get the paper. Hence, no one is at the slightest risk but us.

If the test run is not up to our standards we will either not go forward with this suppler and will try to find another or, preferably, we will ask them to make improvements.

Those who have actually seen our prints, as opposed to seeing web images know well that we do not compromise our print quality and will not accept a substandard product.

Yes, we are asking people to make a substantial commitment to commit to buy significant quantities of paper in advance. It is the only way we will know that when the time comes we will be able to pay for the paper. If everyone buys a box or two of 100-sheets each, we will not raise the necessary funds and this whole venture will end right now until we are able to come up with all of the money ourselves. Which we will at some point.

By the way, if anyone thinks we are doing this as a moneymaking venture, we will happily give them (not sell to them) the entire business and they can put up the money and do it themselves. All they have to do is make the same commitment we are making. Are there any takers out there?

No more time to answer.

Where is that other thread someone mentioned where this is discussed?

Cannot promise to get back here for a few days.

Thank you for the post. I was wrong in my view that you spammed the site. Good luck with your venture. I am still a bit weary of sending off funds for this paper right now. I had hoped you would said it was tested already and up to your liking.

 

[WorkingInZoneI]

Two quick questions and a point:

1. Will there be any kind of publicized peer review of the new paper?

2. What if the buyers of the new paper discover problems while they're printing? Will they still get their money back?


Having used Azo for years as not only a contact paper but an enlarging paper with an old cold light lamp, I think it has been a terrible failure of marketing and imagination that small and medium format photographers don't even KNOW about Azo let alone understand its ability to eliminate most if not all dodging and burning nightmares. Obviously not all 35/120 users would be willing to wait 5-15 minutes to expose a print.........but if advertised as such, Azo's customer base would be arguably significantly larger than it is now, which is precariously small. Then again, maybe we're past the point of no return.

 

[Paul Sorensen]

Two quick questions and a point:

1. Will there be any kind of publicized peer review of the new paper?

2. What if the buyers of the new paper discover problems while they're printing? Will they still get their money back?

I think that these are great questions, especially the money back issue, but I think that you ought to post them to the Azo forum where the paper is announced. That will be most likely to get you an answer.

I guess I should think about enlarging it. We do have a cold light head that puts out freightening amounts of light, might be worth a try.

Paul.

 

[lee]

does it put out a lot of UV light that is the question

lee\c

 

[Jim Chinn]

I don't foresee the paper leaving the factory having problems. I think Michael and the mfg are aware that people getting bad paper would doom the whole project, even if thier money were to be refunded.

 

[Michael A. Smith]

Workshop in Sedona, Arizona over and I have a few moments to spare before hitting the road.

Don sure put a lot of energy into defending his claim that we are asking for investors. I cannot imagine how he sees things that way. And I cannot imagine why he even bothered to get involved in this discussion unless he was out to denigrate what Paula and I are trying to do. He doesn't use the product. Weird. Troublesome. Disturbing. Is he trying to play cop? Everyone's protector? Or is he just trying to "get" us. So it seems. Why? I don't get it. Bad, bad energy from him.

Jay's comments regarding keeping qualities of the paper are good ones (much as I hate to admit it). The paper is being made by a company that has a long history of making photographic materials--film and paper. They know what they are doing. All silver chloride papers have tremendously long storage shelf life. I assume this paper will, too. Paula and I are betting on it more than anyone, as we will have more of our own money tied up in this than all others combined. The paper damned well better keep. And we will have it tested for that, to the extent that one can test a paper's keeping properties without waiting 10 or 20 years for the results.

Kodak has an expiration date on their paper of less than two years. But any user of Azo knows that the paper is good way, way beyond that. (Paula recently made some incredible prints on Azo made in the late 1930s.) But Kodak will guarantee the paper only until the expiration date. We certainly will be able to do something similar. No problem. The last few years Kodak has been selling us paper that is beyond the expiration date they put on it. Before the last run of Azo there was no expiration date on it.

I thank the many who expressed their support, both here on the forum and privately. Your emotional support is greatly valued.

 

[Daniel Grenier]

Thanks for this Michael, Paula.

I think Don's got way too much time on his hands.

Anywawy, I'm in for some 8x20. And I, for one, can only rejoice at seeing the birth of a new paper after seeing nothing but carnage in the LF & ULF marketplace lately. How utterly refeshing this is!

 

[stormbytes]

Please enlighten us Jay. I'm a technical-type person, having been a degreed engineer for thirty years now so I feel I can understand it, but I don't have much of a clue about it.

Please give us a detailed description of the coating process, starting from the assemblage of raw materials to final storage of the master roll. Please include all tolerances to the specifications and what effect variations from specifications have on the paper in terms of speed, tone, contrast, and longevity. I am particularly interested in how the light sensitive emulsion is protected from light all through the process.

Alex,

In Jay's defense, I offer the following -

First of all, let it be known that I've nothing more then a passing interest in the Azo-replacement venture. I'm not a contact printer but have toyed with the idea of trying my hand at it, this prior to Azo's recent demise. The points raised by Jay are valid in every sense and I can't see how scrutiny of the product-in-the-making could possibly constitute 'ney-saying'.

If you'd read the numerous posts by PE on the subject of coating paper or film for that matter, you'd come to the understanding you so desperately seek on how intricate the process can be, and the vast number of variables that can affect the end-result.

Though not based on anything factual, it remains my personal assumption that Kodak is simply UNABLE (or rather, that it is "unfeasible" in financial terms) to make another run of Azo. To think that Kodak would simply disregard substantial (even if) short term demand for a product is practically unthinkable, given the company's technical know-how, equipment, and available skilled manpower.

I am not one for the technical when it comes to making emulsion. However, many that are have already spoken of the intricacies and obstacles. It would be nothing short of arrogant to flatly wave these aside.

For what it's worth, I wish my friends MAS & Paula much success in the production of their new paper and if it proves worth-while, I look forward to jumping on the bandwagon once a tested, production sample comes into existence. However in the meantime, I see nothing inaccurate in the statements made by Jay, or do I find anything hostile in the concerns he has raised. I think that it's vital for anyone laying out their hard earned buck to make an educated decision regarding the obvious risks involved in partaking of this venture - commendable as it might be.

My $0.02

 

[Mark Layne]

I got about three quarters of the way through this thread and gave up. My simplistic understanding is that an investor is one who takes a risk with the expectation of a profit and a good chance of losing it.
All we're doing here is preordering a box of paper.
Photography as we practice it should be an art not a science. The paper is being made by an experienced company so if it looks good why do we need curves. Azo is gone so there is nothing to compare them with anyway.
Mark

 

[johnnywalker]

All we're doing here is preordering a box of paper.
Mark

What?!? Hey, this thread is better than Law and Order re-runs, so don't spoil it.