Allen Out As Skypix Adviser

Portland Trailblazers owner Paul Allen may be ready to cheer on his team against the Chicago Bulls, but yesterday the Mercer Island billionaire held another of his investments at arm's length.

Allen ended his role in managing the troubled Kent-based movie channel company, SkyPix Corp., apparently fearing he could be held liable for shareholder lawsuits.

Allen's Sky King Investment Corp. exchanged its general partnership interest in SkyPix Joint Venture Limited Partnership, SkyPix's main investment vehicle, for a limited partnership interest. Allen retains his $10 million investment in the Kent company, but effectively removes himself from its management committee.

"Sky King's resignation results from its lack of confidence in current SkyPix management, and, in particular serious concerns regarding current investment offerings," said a Sky King release.

Allen's disengagement could deal a serious blow to SkyPix. SkyPix has been working for several years to develop a nationwide system that would beam movies and other programming via satellite to subscribers' homes. But myriad problems dog the company.

SkyPix lost two of its top officers last month, is reportedly short of start-up money, and may be the target of a Securities and Exchange Commission investigation. Its founders, A. Frederick and Richard Greenberg, have been the target of civil litigation by the federal government, and by investors in SkyPix and other business


"The company has always been 90 days from launching since October," said William Savoy, Allen's investment manager. "After awhile, you wonder how much credibility they have."

SkyPix Corp. officials in Kent, and in New York where the Greenbergs are based, did not return phone calls.

By stepping down as a general partner, Allen removes Sky King from any liability, if shareholder suits are filed against SkyPix. When asked if liability was a concern of Allen's, Savoy said, "That's pretty obvious."

Allen, also a Microsoft co-founder, became a SkyPix joint-venture partner in October when he invested $10 million.