How Terrie Lloyd stole Metropolis

This is our personal account of our dealing with Terrie Lloyd during the sale of Metropolis in 2007. It is provided in the public interest.

In 2007, we sat in Terrie Lloyd’s Aoyama office working on the final details of the sale of Metropolis magazine.

A few weeks before, a deal with a Swedish buyer had broken down. We couldn’t quite decide whether it was just complete incompetence on Terrie’s side, or a premeditated plan, so that he could step in himself. Either way, coming after almost two years of trying to sell the company it was a major setback.

I had first met Terrie when I interviewed for a tech position at LincMedia in 1991. I declined the job offer, but after we started Tokyo Classified in 1994 I went to one of Terrie’s seminars. I was quite pleased to hear Terrie describe the magazine as an example of a great new business in Tokyo, and I re-introduced myself. Over the following years we did some minor business together and I would meet with him every so often to exchange information. Terrie also made a move into publishing with Japan Inc, his technology magazine, but it was a “niche of a niche” and it ultimately failed.

By 2007 Tokyo Classified had become Metropolis and was the undisputed No 1 English magazine in Japan with ¥360 million in annual sales and 20% profit. It was the only English magazine in Japan that had its circulation certified by Japan’s Audit Bureau of Circulations. We had a great team of over 30 people from all over the world. Japan Today, our online news site, had grown to be larger than The Japan Times online, but despite excellent user numbers the market for Internet advertising was still weak.

Mary and I felt that we could not do much more in English media in Japan, and combined with a desire to raise our two young children in an English-speaking country, we felt it was time to move on from Japan.

The Dealmaker

At that time, Terrie was trying to build his profile as a dealmaker. In the 90s he had sold his outsourcing business to EDS and made millions, using some of the money to buy a huge beachfront property in New Zealand. While we knew he was not as experienced as a professional M&A shop, we agreed with Terrie’s pitch that working with someone who had gone through a sale process already and who understood it from the entrepreneur’s point of view was a great benefit. We also knew that it would boost Terrie’s profile to have a high profile sale like Metropolis in his resume so we decided to help him by letting him become our sales agent.

The process of selling the company was extremely stressful. Working in our favor was the fact that the business was financially solid. Against us was the limited appeal of an English-language magazine, even a successful one, to Japanese publishers. The amount of documentation and proof required by buyers, known as “due diligence”, is immense. Every detail of the business was analysed and defended. Through this process, Terrie came to know every aspect of the business.

A couple of weeks after the Swedish deal fell through Terrie offered to buy the magazine for the same price as the Swedish offer — just over one times the annual sales of the business.

We were not surprised that Terrie made the offer, but we were skeptical. We knew that due to the failure of Japan Inc Terrie wanted more than anything to be seen as a successful publisher. But what if he ran the magazine down and didn’t pay? We’d be left with no money and the shell of a magazine. We asked for external collateral and Terrie offered land he had in Kamiyamacho, one of the most expensive areas of Tokyo, tucked in between Shibuya and Harajuku.

A Guarantee Agreement was drawn up and signed by Terrie, his wife Kumiko Lloyd, and David Wells, his business partner in Hong Kong. The agreement gave us the rights to the property if he didn’t pay. It also placed restrictions on the property’s use, in order to preserve the collateral value to us: they were not allowed to remortgage, no entering into any other agreements, no renting.

The Pitch

Normally when a loan is made against property a lien is registered with Japan’s Legal Affairs Office. But, on that September day in 2007 in his office, Terrie had a request:

“Listen guys, it would really help me raise more funds to secure the business if you didn’t register the lien.”

Terrie’s pitch was that if the lien appeared as a liability, it would make it more difficult for him to raise funds to ensure the business takeover succeeded, and make it more difficult for him if he needed to raise money to pay us back in the future. He cleverly made us think we were in some way helping ourselves by not registering the lien.

We thought it over for a while, and consulted our lawyer who added a clause that the lien would be registered if and when payment was a problem, or even if the value of the collateral fell below ¥130 million at any time. Thinking we could register the lien at any time with, or without, Terrie’s approval we agreed to his seemingly harmless request. In fact Terrie knew that we would need his approval to register the lien, something he was not going to do.

But mainly we agreed because Terrie was our friend and we were asked as friends. We would never have had agreed if we had not known the person on the other side of the table well and had not had a business relationship for over ten years.

A few weeks after the sale I met a friend who hadn’t seen me for a while. I excitedly told him that I had sold the magazine.

Who to?” he said.

“Terrie Lloyd”

“That crook!?”

“No, he’s not like that. Anyway, we have his land as collateral…”

This decision to help Terrie, literally the very last business decision we made in Japan, was the very worst one we ever made. We closed our deal with them on September 30. Less than two weeks later, on October 12, Terrie and Kumiko, without our knowledge, and in total violation of  the Guarantee Agreement, received ¥53 million by illegally and fraudulently remortgaging the collateral property with Shinsei Bank. This means that as we were in the process of signing over our business they were fraudulently signing the mortgage papers to deprive us of over half-a-million dollars. And then, just to really make sure we would never get the property, they remortgaged again on March 7 for ¥41 million. If the lien had been registered they would never have been able to do this.

It is also highly likely that they committed fraud against Shinsei Bank when signing the bank documents, which require disclosure of all outstanding loans (registered or not) on property. They took all the money out of the property and used it to build a three-story house with a swimming pool, on top of the land. At the time though, we were unaware of this fraud. If we had known, we would have immediately launched legal action against them while we still had some money.

We also found out later that between Terrie making his offer and the sale — while he was still supposed to be acting as our agent — he turned down at least one potential buyer interested in the magazine, without even speaking to them.

In the meantime we had moved to the U.S. and started our karaoke business. It cost a lot more than expected and we started to lose money. Soon we had to ask friends and family to help. They were willing to help because we assured them that even if Terrie didn’t have the money to pay, the collateral would more than cover it. Our only concern was how long it would take to sell the property if he defaulted.

The final months of waiting seemed to go on forever. We had worked for 14 years and then had to wait a further three years longer to get our payout. The delay had helped us though:  the rise of the yen has increased the dollar value of the final payment from less than $1 million to $1.7 million. We hoped to get settled in the U.S., turn the business around, put a deposit on a house, maybe buy a small boat, and put the rest away for retirement.

Abuse of Trust

In summer 2010 I contacted Terrie to ask him how preparations were going to pay us and that’s when things started to unravel.

I can tell you that there is only a remote chance of the full payout being made on time. What I am doing, though, because of course I’m quite aware of your situation as well, is that I am getting ready to sell some of my other assets so that I can make a meaningful cash payment

We contact our lawyer about the collateral and it quickly becomes clear that there is no collateral. There’s no money from Terrie, no collateral, and we can’t get the magazine back because we had relied on the external collateral.

By the time it comes to September, Lloyd says he can’t pay any kind of lump sum. Terrie blames his non-payment on the now poor financial state of Metropolis — which was exactly why we asked for the collateral to be separate from the magazine in the first place. He seems unaware of the irony.


Terrie continued to pay maintenance payments, which barely covered the interest on the outstanding amount he owed, but these payments were swallowed up by our business and living costs, even though they were half what they were in Japan. We didn’t need much to turn our business around but Terrie wouldn’t give it to us —  in part, we believe,  so that we would never have enough money to sue him. He and his partner in Hong Kong, David Wells, continually promised to pay some kind of big lump sum from the sale of an asset, but over three years every time they sold their large assets they gave us nothing.

It’s important to note that, at no time from 2007 to 2013, did Terrie ever complain that he did not get a good deal when buying the magazine. In fact, he told us he thought he got “a bargain”. He had nothing but praise for our work on the magazine:

Outlets for this desire to make information available lead me to publishing a business magazine, Japan Inc; a free paper called Metropolis, which I purchased from a talented and dedicated couple named Mary and Mark Devlin (2009)

You and Mary did assemble an excellent group of hard working people. Without them, we would have gone under last year. (2010)

By any standard the magazine, a solid business that was No 1 in its market and had 20% profit, was fairly priced. It was only after we started to challenge him on the web that he made up some bogus stories which we refuted by simply pointing out that he had worked with us for well over a year on the sale and knew every number in the business inside out.

The contracts with Terrie are unusual; if disputes happen they are to be resolved through commercial arbitration. While this is faster than using the courts, it is considerably more expensive.We also found out that to put an injunction on Terrie’s assets requires a bond of up to 40% of the value of the claim, which would have been up to ¥80 million. We can’t claim legal aid in Japan, now half a world away.

Excuses, excuses

We continued to hope that Terrie would come up with something. He keeps telling us he can sell his cash cow business BIOS and give us some money. We don’t believe he’ll give us any substantial amount, and in the end he sells it secretly in July 2013 and gives us nothing.

He blames the disasters in Japan for his non-payment even though the earthquake was after September 2010.

We ask about his house in New Zealand – he says he sold it “a few years back”, but in 2011 he broadcasts that it’s for sale. Sickeningly he tries to gain interest in the property by saying the sale is “to rebuild Japan“. When he does sell it, he gives us nothing and puts the money into his own businesses instead.

We ask about the house in Kamiyamacho. He says its under water and he needs the rent payments he’s getting from it– again, a complete breach of our agreement — to support his family. He gets aggressive on the phone when we challenge him and ultimately starts to blame us for his problems. He says we should close our business to help him and unbelievably says that if he hadn’t had to pay us he would not have gone “bankrupt“.

There’s always an excuse. As late as March 2013 he was still promising to pay.

To Mary: I thought you’d be interested to know that I may in fact be able to bring our saga to a close shortly. I’m in deep negotiations with a serious investor to our software company. I’m expecting an LOI by the end of this month, and for them to approve the shares purchase no later than the end of June

All of of Terrie’s excuses miss the real issue: No excuses would be necessary if he hadn’t abused our friendship to cheat us out of our collateral and steal our magazine.

If you would like to find out more about our dealings with Terrie Loyd please contact Mark directly:

Leave a Comment