I just got word from MyKinda founder Lee Wilkins that he plans to shutdown the Eastern European blog network later today.

The network launched just last September and was being bootstrapped. Earlier this week we reported that they were having significant financial difficulties, and had shut down all but two of their sites. Today, those last two will be shuttered as well.

Wilkins says the shutdown is temporary to ensure that money due to writers doesn’t continue to add up. The sites will remain down until, he says, “we redefine a more profitable sustainable business model.” The company had total expenses of about €319,000, with no advertising revenue to offset it. Wilkins capitalized the company with €175,000, leaving €144,000 or so in unpaid debts.

MyKinda joins the DeadPool for now. Hopefully we’ll see them relaunch down the road, and continue to cover tech and other news in Eastern Europe.

Anyone who watched the BlogNation implosion last year certainly doesn’t want to see a rerun of that particular debacle. But there are worrying signs coming from Romania-based blog network MyKinda that suggest the young startup is facing some of the same cash flow issues that plagued BlogNation.

Like BlogNation, MyKinda is a network of country-specific blogs. It’s somewhat different in that the blogs are written in local languages (BlogNation was all English), and it covers a wider variety of topics (BlogNation was tech news only, MyKinda covers business, politics, culture, lifestyle, science and tech/gadgets). MyKinda launched blogs in Romania, Russia, Bulgaria and the Ukraine.

The two networks have a common founder in Lee Wilkins, although Wilkins left BlogNation early on under allegedly questionable circumstances (I wrote about some of the issues here). As BlogNation’s debts rose and funding failed to happen, Wilkins started MyKinda to compete head on.

The biggest issue with Blognation was that writers went half a year or more without pay, while being told by the company that funding was imminent, or had already happened. The funding never happened, and the company folded in December. Writers were owed, by some estimates, as much as $200,000 in aggregate.

Now MyKinda is falling behind on payments to writers too, although on a much smaller scale. And to Wilkins credit, he seems to be dealing with the problems in a much more orderly fashion than BlogNation did. He’s shut all but the Romanian blogs, he says in a blog post. And he promises to pay the writers of the other blogs what they are owed – around €11,500. In an email to me, he writes:

As you may know we launched Russia and Bulgaria on Sept 16th ‘07. Unfortunately, at the beginning of February, I decided to close down RU & BG to focus efforts on Romania, and because RU & BG were burning a lot of cash. €15-20k per month. Closing these two countries (along with Ukraine) was very tough, as it dented plans.

I close them because I am bootstrapping MyKinda alone by myself, and right now I cannot keep it all going. I am not saying we are heading to the deadpool. When closing RU & BG, I occurred debts of approx €6k for RU & €5k for BG. €500 for Ukraine. The past month we have been going through a little cost cutting here @ MK, as we are generating alot of uniques/visitors.

And we are nothing like Blognation, the debts occured for RU & BG were for January 2008 until closing them in February. I have never lied to my people, maybe a little lack of communication yes, but lying, no! I should’ve, in hindsight, communicated earlier that I couldn’t keep RU & BG going, but I had hopes of being in a position to finance it myself. Right now, I am in the process of making calls, to get my people their money asap, as i promised. I am not a thief, nor am i liar. These people delivered for me, I will deliver my promise to them.

More as this develops, but MyKinda is on DeadPool watch.

When Oliver Starr (former MobileCrunch writer) attacked employer Sam Sethi (former TechCrunch UK writer), the person who currently controls Blognation, in a 3,000 word diatribe, a lot of people came to the conclusion that Blognation was dead in the water.

The chain of screw ups was just too long. Sethi had an emotional explosion and threatened to kill his cofounder over a legal dispute. He reportedly lied to his editors flat out that he’d raised a £1 million (more here) so that they’d continue to work for free. He allegedly forged bank transfer documents to stall for time. To sum things up, even when Sethi had something truthful to say, he apparently lied anyway just to make things more interesting.

But he may raise an angel round of funding anyway, and keep Blognation alive for a few more months. We have been emailed a draft term sheet that shows the willingness of Secora PLC, a London based company, to invest £250,000 for 25% of Blognation. Payments would be made in stages, with £130,000 payable as soon as the deal closes. This may or may not be an authentic document. I’ve emailed Secora for comment.

If the deal closes, Secora will prove itself to be an investor with a backbone. Not many entities would back a startup with this much baggage.

Putting Sethi aside, this is good news. Mostly because the 13 or so Blognation blog editors, some of whom are reportedly due as much as 30,000 Euros for past work, were looking at a bleak holiday season. Now, at least, they may be able to put food on the table and buy gifts for their children.

More on this as it develops. Term sheet is below.

Update: The financing didn’t close, Blognation is now in the DeadPool.

Lee Wilkins, a British entrepreneur living in Romania, soft launched a new eastern-European blog network this morning called MyKinda.

The network currently has blogs in just Romania, Bulgaria and Russia, but Wilkins says he’ll be launching in ten more eastern European countries soon, and eventually will cover the whole region. Each country will have six blogs, each one focused on a single topic: business/media, culture, lifestyle, politics, science and tech/gadgets. The blogs will be written in local languages, and English translations of most blog posts will be made available on separate blogs.

Bloggers are being paid a flat fee for their work – a base pay of €300/month with bonuses for longer and more frequent posts. The company is being bootstrapped right now, and Wilkins is looking for angel funding.

MyKinda v. Blognation

MyKinda is similar to blog network Blognation, a UK-based blog tech-focused blog network founded by former TechCrunch UK writer Sam Sethi (Sethi did not leave TechCrunch amicably, it should be noted). There is some seriously bad blood between Sethi and Wilkins, though.

Wilkins claims to have thought up the original idea for Blognation, including the name, and brought Sethi in as a partner earlier this year after spending €30,000 in out-of-pocket costs. Something led that partnership to dissolve, however, and the two started a very public feud. In one email string the two were making serious threats to each other. Unfortunately, the email string included two partners from London based Index Ventures, Danny Rimer and Saul Klein (Blognation was trying to secure funding from Index). On that string, which was forwarded to me, Sethi actually said he would kill Wilkins when he kept threatening to sue:

Will you fucking leave Danny and Saul out of this what have they got to do with this or I will come on the next flight and fucking rip your head off. If you have a grief it is with me and tristan. They are very busy people you idiot. Add that to your lawyers list and send over the docs asap pls.

Thanks in advance

Needless to say Index didn’t invest in Blognation.

Sethi does not dispute the email or that there is an ongoing issue between him and Wilkins, but he did note that there were two sides to the story. He declined to give his. In any event, Sethi moved forward with Blognation without Wilkins.

Blognation, meanwhile, is apparently having trouble making payroll to its fairly large staff. In an alleged email to writers over the weekend, he assured them that a $4 million round is coming and that he will be covering payroll via his personal account:

Not avoiding email or skype. Just trying to fix the interim problem of delayed transfer from VC as fast as I can which meant I was in London all day yesterday and offline. I have arranged an overdraft against my own assets to cover the shortfall so everyone can get a interim payment and have organised a call with the VC’s for the team next week to hear it from the horses mouth. (details to follow)

In the past two VC’s have let me down (TAG and New Media Spark) and this third one is now already on the board of blognation and have assured me the transfer is happening “it is a process” and just slower than they expected. I wish there was a magic wand to make this happen quicker. There is not. Please email, skype, call me if you need to know more anytime this weekend.

So the good news is that Blognation may be securing funding in the near future. The bad news is that those investors may be stuck in the middle of some pretty serious litigation between Sethi and Wilkins.