World Health Alternatives, Inc.(fka WHAIQ)

[waltczyk]

http://www.tradingmarkets.com/.site/news/Stock%20News/2502351/

[MasterBlastr]

At this point, we just wait for the results of the grand jury investigation. I am not sure if the Chapter 7 can be discharged with that still outstanding. In any case, about all thats left of WHAIQ is the corporate shell, which I suspect will be clean after the discharge. For a shell with about 35 million shares outstanding, the current price of .0018 is about right, maybe a tad high. The shell could sit for years until or unless someone picks it for a reverse merger.

[MasterBlastr]

Update -

On May 21, 2007 the Chapter 7 trustee George Miller filed an adversary case to prevent collection of proceeds from the class action lawsuit, arguing that this money belonged to the estate. A preliminary injunction was denied on June 8. The class action lawsuit was closed on June 11.

Adversary case 07-51350. Complaint by George L. Miller against Richard E. McDonald, Marc Roup, John C. Sercu, Bruce Hayden, Frederick R. Jackson Sr., John W. Higbee, Brian T. Licastro, Mark B. Rinder, Berger & Montague, P.C.. Fee Amount $250 (72 (Injunctive relief - other)),(14 (Recovery of money/property - other)),(12 (Recovery of money/property - 547 preference)),(13 (Recovery of money/property - 548 fraudulent transfer)). AP Summons Served due date: 9/18/2007. (Attachments: # (1) Adversary Proceeding Cover Sheet) (Pileggi, Francis) (Entered: 05/21/2007)

Order DENYING Trustee's Motion for a Preliminary Injunction (Related Doc # 775) Order Signed on 6/8/2007. (LJS, ) (Entered: 06/08/2007)

[MasterBlastr]

Update - June 16, 2007

The class action securities lawsuit concluded on June 11. The Chapter 7 case is still in progress, and I am researching court documents at this time to see where that stands. If you owned World Health, Inc. securities on or between June 26, 2003 to August 19, 2005 you should contact the Claim Administrator by August 13, 2007 to file your claim.

http://scas.issproxy.com/casesummary.php?CaseId=29358


The company remains under investigation by a Federal Grand Jury.

http://www.post-gazette.com/pg/07164/793517-28.stm

[rocky822]

Mistake in previous post. Elgibility is for those "who purchased shares on or after 8/17/04 and held those shares until 8/16/05".

[rocky822]

FWIW, got a "Notice of proposed class action settlement, right to exclusion, hearing and request for attorney's fees and costs" mailed to me last week. I never contacted anyone so first time I've seen anything re: the class action suit.

Here's what it says - apologize in advance for punctuation, typing it free hand:

What is the Settlement Fund?" In the proposed settlement, the Individual Defendants have agreed to contribute to a settlement fund in the amount $1.7 million, plus whatever interest accrues after the fund's creation. Defendant Daszkal Bolton agreed to contribute to the settlement fund an additional $1m. Defendant Richard McDonald agreed to contribute restricted common stock he held in three companies: 60k shares in American Defense Systems; 350k shares in Corner Stone Pictures Corp; and 25k shares in Legend Motors Worldwide. These shares are not listed on an y exchange and it is not know when, if ever, the settlement fund will be able to sell them. Plaintiffs' Counsel intends to sell these when feasible sot that the proceeds of the stock sale will be added to the Settlement Fund. Up to 30% of the Fund will be used to pay attorneys' fees and Plaintiff's Counsel will also seek reimbursement of reasonable costs and expenses and for costs of the Claim Administrator administering the settlement. Then, the amount remaining will be distributed to Class Members who submit valid claims.

Fees/Expenses - I'm not going to re-type this, just summarize:
Attorneys asking for $810k plus 30% of the proceeds on McDonald's stock.

Also asking for reimbursement of actual expenses plus accrued interest not to exceed $100k.

If you held stock between 8/17 2004 and held through 8/16 2006 the "per-share recovery" is approximately .11 or .074 after deductions. But, depends on # of claims filed.

[MasterBlastr]

LOL no post-divorce bounce ?

[finbar99]

maybe it depends on how you measure the 'loss' ;)

[Porsche928s]

Ouch!
Doing my 2006 taxes and got the year trades from the broker. Picked it as a bottom fish in 2005, averaged down a few times (stupid) and finally just dumped the pos in 2006. Biggest loss ever for me in the stock market. Ranks #2 behind my divorce for biggest loss period.

[GordonGekko1982]

fin, I made a new board, and would appreciate your insight on bk plays/POS's that may be heading that way either for a bounce or a death drop; http://www.investorshub.com/boards/board.asp?board_id=8431

[finbar99]

nope, a CPA by trade - but like stocks more than tax returns, and like the edge one gets with bk stocks - pacer, noone really looking for the most part, and insanely discounted prices in certain circumstances. There are a few 'retail' folks who mainly do this, and most of us correspond regulary. Don't have a bk attorney as part of the group yet but we've always wanted to find someone with more formal training - what we know about bk we've pretty much learned following a lot of cases for the last 4 years. The most regular hangout is the DGEN board on investorvillage site. Stop on in.

[GordonGekko1982]

finbar, you practice bk? I live in Wilm. and have a keen interest in it, currently a 1L and looking how to turn any knowledge here into $$$.

[mordicai]

remarkable, the company would have probably survived if not for the filing of all the class actions. Probably capsource got more out of whai on all those forbearance fees.

[MasterBlastr]

Found one - $2.7 million

http://securities.law360.com/Members/ViewArticlePortion.aspx?Id=14136&ReturnUrl=..%2fsecure%2fVi...

[finbar99]

you can google for the article - some paper wrote it up a few months back - I think from memory it was around 3 or 4 mm

[mordicai]

What are the terms of the class action lawsuit settlement?

[finbar99]

In bk, the irs measures change in control by the number of folks who have more than 5% and go under 5% and by the number who have less than 5% and go over - if there is a more than 50% change then you have a change of control - its the reason that a lot of large bk firms request trading restrictions from the judge - see GEGQQ last week - basically the judge rules that 5% owners cannot sell their stock and less than 5% owners cannot buy if the selling or buying would cross them over the threshold. Since 5% of WHAIQ stock runs about 4k, I'm guessing there probably been enough transactions to trigger that for whaiq. I've probably followed 50 bks in the last 3 years - only seen the shell sold in 2. For one the SEC always chimes in against it as trafficking in shells is considered counter to public policy. Plus shell buyers only want shells that have gotten a technical discharge from the court and liquidations, esp. chapter 7s rarely get a discharge and without a discharge creditors can go back after the shell for any unpaid claims - its never an issue absent an attempt to sell the shell becuase in a liquidation the shell is empty if creditors haven't been paid 100%. I suppose if Whaiq did recover enough to pay out to equity though via the lawsuits, the shell could get a discharge, but the mechanism to buy the shell would still be to buy the unissued shares - its the only way to get 90% without driving the price through the roof, and no one wants a shell where they don't have 90% because otherwise you are taking too great a % along for the ride. If a company doesn't have enough unissued to do such a deal and can't increase the authorized number in bk, then the shell just doesn't get sold. I did have a shell last year that come off the Millbrook bankruptcy - creditors got paid in full there plus equity got 47 cents - the shell was then sold for I think 250k but everyone got to keep their shares - though they were diluted by 90% - nevertheless, the empty shell continued to trade and got as high as 30 cents - not sure who was buying an empty shell at that point but I was happy to let them have some of my shares. That shell has now been filled via R/M just last week (though its back to 10 cents now). Still have some shares - mostly just out of a keen interest to see how it goes. This shell was taken over by Trinad Capital who has an impressive record with some of their prior deals like US Wireless and the shell that came out of Eb2b, though I can't remember what that shell was renamed.

[MasterBlastr]

I would expect this change of control would occur after the Chapter 7 is discharged, after the processing of creditor and government (IRS) claims, with any remaining distribution remaining with the estate (and distributed to common shareholders) depending on the success of the actions of the Trustee. But we are not at this point yet, and might not be for some time, it would seem.

FYI as few as 46M and as many as approx 66M out of 80M authorized shares have already been issued and outstanding prior to the Chap 11 filing. This number is not clear as R.E.M. appeared to have given out unauthorized and unregistered shares. The share count reconciliation has not been performed to this day to my knowledge.

[finbar99]

as for the shell - they're never 'sold' by the buyer acquiring the shares - the buyer of the shell will usually give the estate a few hundred k in exchange for the authorized but unissued shares - they thereby get control of 90% - and they have to keep the other 10% (previously the 100%) on board so that they meet the min shareholder rules for continued trading, which applies even on the pinks. Usually kills off the NOLS vs attempting to acquire 50% of shares but NOLs are probably already dead due to change of control rules that apply in bk under IRC 382.

[finbar99]

Keep in mind the D&O policy would be used to collect on any damages from the Directors/Officers/CEO - on top of any thing that would come out of pocket for them - but usually nothing out of pocket for the D&O's - but in this case the CEO would be a different story - I remember an article that after he left a personal brokerage statement was found in his office with 40 mm in assets (though I think half was whaiq stock) - still 20 mm which hopefully has been frozen through some law enforcement mechanism. But on top of the D&O and anything left with the CEO, they would attempt to recover separately from the E&O of the auditors, and possibly the former legal counsel who has also been mentioned as a target. The class action has recently been settled - the trustee attempted to intervene and step into the shoes of the plaintiffs but the judge did not allow as they were sueing as on a 3rd party basis under Ultra Mares type doctrine - there was one part of that consolidated suit that was derivative in action but the derivative part was dropped in the settlement (the derivative part would have precluded the trustee from making the same claim - but I read the judges opinion on denying intervention and he specifically cited the dropping of the derivitive claim as the basis for denying the trustee's motion). Contract law between the company and its auditors, legal advisors and D&Os is far stronger legal basis for larger damages. I think it will be in interesting ride once the cases start being filed and I think that will be sooner than later based on detail in the fee app

[ChiZelman]

Thanks you'll

[MasterBlastr]

Thanks Speed !! yhm !

[MasterBlastr]

Thanks, finbar99 - you pretty much summarized what I was going to put in my update. I spruced up the I-box a little as I think we will be getting more visitors here soon.

It looks like George Miller the trustee is at least researching former CEO Robert E. McDonald, and there appears to be ongoing FBI and Grand Jury investigations too. It looks like there is an effort to bring the ongoing class action shareholder lawsuits under the bankruptcy case. I am still trying to research the exact value of the D&O liability insurance policy, and I need to back down off the $25 million figure for now as that just came from another poster on this board. I am trying to find Speed, who might have the exact figure. Still, much of these claims could be collectible by the estate, and could result in us ending up in the black and some kind of dollar settlement possible, maybe even significant compated to current levels.

I also have attempted to contact George Miller but have not been successful. I would be very surprised now if he would give us anything new regarding the case.

After the bankruptcy is discharged, the WHAI shell may be usable in a reverse merger. I guess its possible for someone to try to gain 51% majority of shares in the shell. Maybe that is what is happening now. I am not sure if this scenario is possible or feasible. I know of one case Videolan Technologies VLNT that went bankrupt in 1998 but still trades.

Barring everything else, WHAIQ has somewhere between 66 and 80 million shares outstanding, and many shares I would suspect are still being very tightly held in anticipation of a favorable outcome in litigation for the company. From a technical standpoint, very few shares traded during the drop from 08 to .01

In a perfect storm of successful litigation, collection of judgements and insurance policy claims we could be worth substantially more.

[finbar99]

FWIW, back when the case was still chapter 11, these causes of action were discussed as valuable assets of the estate and the cred committee had the carve out earmarked to fund prosecution - any time you have fraud on this scale basically everyone involved has dirty hands, either for participating or for being to grossly negligent to catch it, ie the auditors and former outside legal counsel. Once it went into Chapter 7 things went quiet - I tried emailing G. Miller to ask about status of the potential lawsuits that had been previously discussed in court but never got a reply - based on the fee app I'd say he was too busy. I've never seen the value of the D&O policy but if it is indeed 25 mm this could really get interesting.

[finbar99]

The trustee in the case just filed his fee application with the bk court - as is customary he had to attach his timesheets. The period covered was Nov through January - pretty much all they worked on - to the tune of 147k in fees - was developing the cases against the former auditors, the former CEO, the Directors and Officers and the D&O Policy. I suppose some are thinking if they can get 20+ million out of the group that equity is back in the money.

[MasterBlastr]

There are few hard facts and a lot of conjecture and some interesting possibilities. I have not gotten anybody close to the case to say anything so let me think things through and I will be summarizing what I have over the weekend. Please enjoy the long weekend and don't wait up for me.

[ChiZelman]

Does any boby know what's going on with this ? Volume up price up. Thanks for your help

[MasterBlastr]

The U.S. Trustee is not at liberty to discuss the case, and referred me to Mr. Miller, stay tuned.

[MasterBlastr]

Update - my apologies for the long gap without an update, hope everyone had a great Holiday Season this year.

The bankruptcy case was converted to Chapter 7 on 10/31/06, Creditors Proof of Claim due by 3/14/07, Government Proof of Claim due 4/30/07. I will attempt to gather more information from the trustee(s) and various legal counsel assigned to the case. The price of the common stock fluctuates between .0005 and .0020 and continues to trade, and I suspect it will until the Chapter 7 is finally discharged. I am researching any current legal action being taken against R.E. McDonald and will advise. If anybody out there has anything please feel free to chime in.

Trustee
George L. Miller
1628 John F. Kennedy Blvd.
Suite 950
Philadelphia, PA 19103
215-561-0950

Email: [e-mail]


U.S. Trustee
United States Trustee
844 King Street, room 2207
Lockbox #35
Wilmington, DE 19899-0035
302-573-6491

[gzfxfan]

what reason for the 100% up Friday?

[gzfxfan]

[MasterBlastr]

Update - it looks like the committee of unsecured creditors was denied the $1.6 million carve out, and will not have a mechanism to persue further claims *in this scenario* if the case is converted to Chapter 7. Claims will need to be filed through the court appointed trustee if/when the case is converted to Chapter 7. It also appears that WHAIQ would continue to trade through the Chapter 7 process.

I have not been able to find any update on REM, though pigsinablanket3 may be a good source of information, if she can say anything about the case in progress. Could the trustee persue REM on behalf of WHAI ? Good question, can anyone answer ?

[iknowmain]

Ok, I'm game. Provided the stock is trading, what exactly is it trading,, a shell without revenue?? If I were bidding, why not do my own reverse merger? Any work on McD?

[MasterBlastr]

Update - the bankruptcy case continues, the unsecured creditors are getting a $1.6 million 'carve-out', and the Committee of Unsecured Creditors is still persuing Capsource for among other things, filing taxes with the IRS. I understand there is a $25 million insurance policy that the company may attempt to collect. I will try to find out more about that. Final resolution is probably some time off but don't get your hopes up if you are a shareholder. The stock WHAIQ will continue to trade unless and until their Chapter 11 case is converted to Chapter 7, which is possible.

[manfrommars]

No, shareholders are not considered unsecured creditors.

[MasterBlastr]

Update -


http://www.bankruptcylawblog.com/other-nationally-significant-cases-world-health-alternatives-uphold....

Question - were the common shareholders considered part of the unsecured creditors ? There was a small burst of buying (not by me) on the same date this article appeared.

[rocky822]

OT: Know this was of interest to some:

Scrushy, Siegelman found guilty on federal conspiracy, bribery charges
Birmingham Business Journal - 3:08 PM CDT Thursday
Print this Article Email this Article Reprints RSS Feeds Most Viewed Most Emailed
Former Alabama Gov. Don Siegelman has been found guilty on 10 of 34 counts in a federal corruption trial, including bribery, conspiracy and eight counts of mail fraud. Siegelman's conspiracy conviction did not include a guilty verdict under the Racketeer Influenced Corrupt Organizations, or RICO, statute.

Former HealthSouth Corp. CEO Richard Scrushy, accused of buying his way onto the state's Certificate of Need review board, was convicted on all six charges he faced, including bribery, conspiracy and four counts of mail fraud.

http://birmingham.bizjournals.com/birmingham/stories/2006/06/26/daily20.html

[manfrommars]

Ya, I guess your right. You still got 6 months to register a capital loss..

[beerthirty]

No point in selling now.

[manfrommars]

You all still hoping?
Or has reality finally set in?

[rocky822]

Thanks for the update. eom.

[MasterBlastr]

(update - reposting from RB) By: finbar9
07 Jun 2006, 11:29 AM EDT Msg. 10220 of 10220
(Msg. is a reply to 10219 by sixtynine25.)
anyone still here? watching pacer. long shot but may get interesting yet - any recovery for equity could only come from success with causes of action but they have a few with merit and they have stated in court several times now the intention to pursue them - against mgmt, against the former auditor, against former legal and against D&Os and the D&O policy (5 mm).

[DD-214]

OT: Hi all, hope you had an opportunity to pick up a few XKEM...... @09:30 tomorrow there will be a BLAST off and no doubt it'll be heard all over the world. The ROCKET if fueled and the match is LIT.............

[ChiZelman]

OT:pfrenz
Would you please e-mail me [e-mail] I have something to ask you in private.
Thanks
Put your screen name in subject:PFRENZ

[MasterBlastr]

Great work pfrenz, will try for some .0005 or .0006 if I can. I like how they are addressing the CD situation there.

Looks like QBID finally bit the blue-veined bag unfortunately.

XKEM getting closer.

SPZI had some interesting posts by a new face, things could be moving there soon at last.

I will try to look over some court documents this weekend and see if there is anything worthwhile to report here on the WHAI case.

[DD-214]

OT:... FINALLY, BKMP, 130 million @.00023, WOW! Next week's gonna be HOT! Check out the news, PR after hours, BKMP struct a deal with VERIZON, look for 2000-5000% increase over next week!
Hope all is well with you.........

[pigsinablanket3]

FBI all over REM -they'll .... but good!

[iknowmain]

WHAI is down today!?!?! This is an outrage!!!

[rocky822]

Yeah, one of my two "greens" today. lol!

[iknowmain]

Wow, now we're almost up to half a cent!!