Industry Consulting Type of business Private | Number of employees 0 | |
Key people James Hibbits, Co-Founder/President
Michael Lebb, Co-founder/Vice-President
Matthew Porter, CEO Headquarters Clayton, Missouri, United States Founded 2000, Clayton, Missouri, United States | ||
Linuxgruven was a technical services firm that was designed to specialize in work with the Linux Operating System. The firm was officially incorporated in the state of Missouri in February, 2000, by founders James Hibbits and Michael Lebb. Its doors closed on March 8, 2001. Linuxgruven had offices in eight U.S. cities including a headquarters office in Clayton, Missouri, which is a St. Louis, Missouri suburb. At its peak the company employed 106 people.
Contents
Business Plan
Linuxgruven's initial hiring and revenue plans were closely intertwined. The company placed advertisements in the Employment sections of local newspapers for Network Engineering positions. Individuals who were officially labeled as Human Resources personnel would offer job candidates a position with the company if they completed either a SAIR Linux certification or a proprietary Linuxgruven certification. In turn, Linuxgruven originally offered an eight-week training program for the certification process that initially cost $2,500. Near the end of the company's existence the price for training increased to $3,150 and the course was reduced to four weeks. Human Resources personnel were paid commissions based on the number of people who paid for the training program.
The stated reason for charging for training was to provide the company an immediate stream of income until the consulting services that Linuxgruven would provide generated sufficient operating revenue. In reality, most of the income that Linuxgruven received was directly from prospective employee training and not from technical support and services.
Business Failure
On March 8, 2001, all Linuxgruven offices shut their doors. Many employees also learned that their paychecks had bounced, that their health insurance had not been paid, and that unemployment insurance had also not been paid. Shortly after the business' failure, Hibbits issued a statement through the company public relations firm Propellerhead blaming Matt Porter(CEO) and Jack Estes(CTO) on the executive staff for the company's quick demise.
Lawsuit
On January 7, 2002, the Missouri Attorney General Jay Nixon filed a lawsuit against Hibbits and Lebb alleging deceptive business practices, among other things.