Johnik,
On 8/24/09 John Bordynuik, acting as CEO of JBI, signed a letter agreement which stated, in part, the following:
"For and as consideration of the assignment to 310 Holdings, Inc. of above referenced media credits of $9,997,134, 310 Holdings shall issue to Domark International, Inc. one million shares (1,000,000) of restricted common stock of 310 Holdings, Inc.".
The JBI Inc. 10-Q as of 9/30/09, filed on 11/16/09 and certified in accordance with various securities laws by John Bordynuik as "President, CFO, CEO, Director", reflected the acquired Media Credits as a Current Asset in the amount of $9,997,134.
On 5/21/10 the company filed a Form 8-K which said, in part:
"On May 19, 2010 John Bordynuik, President and Chief Executive Officer and Director of JBI, Inc., (the “Company”), concluded that the Company’s previously issued audited financial statements for the year ended December 31, 2009, filed on Form 10-K with the Securities & Exchange Commission (“SEC”) on March 31, 2010 and the interim financial statements for the period ended September 30, 2009, filed on Form 10-Q with the SEC on November 16, 2009, should no longer be relied upon due to questions regarding: 1) the accounting treatment and related disclosures of two acquisitions which were completed during 2009 and 2) the valuation of media credits acquired by the Company during 2009 through the issuance of common stock."
And "The Company’s newly appointed independent registered public accounting firm of WithumSmith+Brown, PC will review the restated financial statements to be included in the revised Form 10-Q and will audit the financial statements to be included in the revised Form 10-K."
On 10/20/10, in response to correspondence from the SEC to Mr. Bordynuik, JBI's legal firm wrote the following on the company's behalf:
"It was not until our new auditors began working on JBI, Inc financials and reviewing our documentation regarding the media credits that it was discovered the publications our advertorials were eligible for had limited readership and therefore would be unlikely to materially increase sales or profits. Thus, it was determined that the media credits had no value and should be written off."
Given the above, which of the following conclusions do you believe applies to the company CEO?
1. On 8/24/09 whatever due diligence that his fiduciary duty as CEO required prior to signing the agreement letter was woefully inadequate, irresponsible and incompetent in that it should have resulted in his awareness that the "media credits had no value" and failed to do so.
or
2. On 8/24/09 he was fully aware that the "media credits had no value", executing the letter agreement by which they were acquired, and allowing or causing their inclusion as a Current Asset valued at $9,997,134 in the records of the corporation despite that awareness.
If you believe that any conclusion other than one of the above can be drawn regarding Mr. Bordynuik's state of mind on 8/24/09 based on what was known then or what has become known since please share that conclusion.
I'm tryin ta think but nuttin happens......Curly
