Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
"The Trustee desires to examine the full nature and extent of the use of accounts maintained with Witness and the transactions in those accounts maintained by certain of the Debtor’s customers/vendors and/or principals to ascertain whether the estate maintains additional claims for relief arising from those transactions."
I guess the highlighted phrase is suggesting that there were transactions made between the Citi account number that is purported to be SPNG's and other Citi accounts in the names of parties mentioned that might lead to some recoveries. I find the mention of principals to be especially interesting.
VD,
"Partial? Wasn't it FULL judgement PLUS some!?! "
I hope my last post cleared that up.
MLM,
By whom?
The order was entered on Friday requiring RME to cover the stopped $366k check plus costs on a summary judgment and the rest of it...the SPNG piece...is "indefinitely stayed" "pending the resolution of its bankruptcy proceedings".
I'm pretty sure that the answer to your question is "nope".
FWIW, MSG appears as a disputed claim on the 20 largest creditors list in the amount of $511,700.
How long do you think it will be before someone we know gets all excited and starts jumping for joy over the fact that a piece of SPNG's $11M+ in liabilites just got broken off, albeit to fall on the shoulders of "the other spongetech".
A fascinating partial judgment in the MSG case. (Stumbled over it looking for wayward bank accounts)
You may have to enter the funny security numbers.
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=4NpRAMSzDUAmJpyNCBbv5w==&system=prod
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=4NpRAMSzDUAXt29EiVGxUw==&system=prod
https://iapps.courts.state.ny.us/fbem/DocumentDisplayServlet?documentId=4NpRAMSzDUCsjW4jmg2OUA==&system=prod
I can't, and I too found it interesting. In fact, I vaguely recall Davis (or another of the SEC investigating attorneys) making the statement that SPNG only had one bank account for the period that they studied. And the statements in the exhibits from the 2008-2009 months shown are from TD.
FWIW, the SPNG check for $70,880 and dated in October of 2009 that was returned stamped NSF in the MSG case was drawn on a Bank of America account.
starfire,
I quoted from the article (using quotation marks), so we don't have to "believe" what it says:
"the ftd data do not include “ex-clearing”
transactions—that is, trades cleared
directly by brokers that bypass the dtcc."
I then asked:
"Does this mean that the data does not reflect a failure of customer A to deliver shares, whether long sales or short, to customer B with both parties being customers of the same broker?"
You answered:
"In ex-clearing, customer A & B are not from the same broker."
......Clearly indicating that my understanding of ex-clearing transactions is incorrect (very plausible). If that's the case, exactly what type of trades are "trades cleared directly by brokers that bypass the dtcc."? Please provide a definition of an ex-clearing transaction. If you don't mind, include an example.
Maybe if you'll help me understand that, I'll be able to understand how and if it relates to naked short sales. The fact that the FTD stats don't reflect ex-clearing transactions is a characteristic of the statistic, it doesn't define an ex-clearing transaction, so it's not "the way ex-clearing works."
"Notably, the ftd data do not include “exclearing”
transactions—that is, trades cleared
directly by brokers that bypass the dtcc.
Those trades are also referred to as “non-cns”
in that they occur external to the nscc and
are reported differently. Neither the sec nor
the exchanges will disclose the names of the
institutions failing to deliver on the grounds
that “fails statistics of individual firms…is proprietary information and may reflect firms’ trading strategies.” That statement seems odd; what is proprietary about data on illegal trading activity? Moreover, how are ftd data more proprietary than short interest data, which are reported twice monthly?"
That's the complete paragraph, which I think may add some important context. This stuff is not easy for me to grasp, so I'm hoping that I can get a little clarification.
re: "the ftd data do not include “exclearing”
transactions—that is, trades cleared
directly by brokers that bypass the dtcc."
Does this mean that the data does not reflect a failure of customer A to deliver shares, whether long sales or short, to customer B with both parties being customers of the same broker?
re: 'Neither the sec nor the exchanges will disclose the names of the institutions failing to deliver on the grounds that “fails statistics of individual firms…is proprietary information and may reflect firms’ trading strategies.”'
There is no source provided for any of that. No source confirming that that is in fact the policy....although I believe that the purpose of the stats is analytical versus the determination of any culpability, so it might make sense. And no source for the quoted statement that purports to provide the reason for the policy, if it is a policy. Do we know whether any of it is true?
re: "That statement seems odd; what is proprietary about data on illegal trading activity?"
If my understanding of the trade in which an ftd occurs above (Customer A&B of the same broker)is correct, would it enhance or detract from the ftd statistics to include it? The fact that the trade occurs intra-broker means no shares are created, so it's not a naked short sale in the sense that no new shares are coming to market. The ftd rules aren't meant to identify two customers who have the purpose of creating wash sales, are they?
I thought that there was the belief by some that SPNG shares were sold short without a borrow, up to 50 billion of the suckers, creating so-called phantom shares. How would identifying customer A in the example, who didn't do that, prove anything? I assume that, should customer B sell the "shares" to a buyer that is not a customer of the same broker that, at that point, the ftd would be picked up in the statistics because B never had shares to sell and hence couldn't deliver them.
At the risk of showing my ignorance (again), and to assure that this has at least a vague resemblance to an on topic post, wouldn't any existing naked short position in Spongetech be quantified by the number of current ftd's? Isn't it correct that while the same may not be true of a stock that continues to trade regularly, offering the opportunity to satisfy any ftd's, the fact that SPNG cannot trade stops the clock on that process?
Can someone who believes that there is a naked short position in SPNG of any size take a stab at clearing this up for me, please? Or am I beyond hope?
z,
I searched using:
"josie cline" spongetech
There was no second page. But now the short list of returns includes an investors hub listing for a post from somebody named zomniac.
BTW, aren't "guys" named josie just asking for trouble?
I expect for the proper premium that a company could probably cover everyone and everything. But I think the typical D&O policy covers defense costs and the losses of others due to the covered parties actions. But I think the acts of the parties must be performed on behalf of the company and I don't think acting as a witness meets the spirit of that description.
BUT, a more careful reading of the motion shows that one of the "petitioners", Barry Kolevzon, is in fact a defendant in an OSHA claim, along with SPNG, SM and MM. It's based on a complaint filed by a Josie Cline, whose Linkedin listing describes her as a Public Relations and Communications Professional in the Milwaukee area. I have no idea what a PR person is doing filing an OSHA complaint. The only Google returns show that she is/was the Spongetech contact for Protect Your Waters, which describes Spongetech as a partner company"
http://www.protectyourwaters.net/activities/partners.php?action=detail&id=847
Ms Cline also appears on the SPNG creditor list, which shows a debt due her of $10,000.
Also, and I have no idea whatsoever if it has any application here, but The Whistleblower Protection Program operates under the auspices of OSHA.
Anyway, assuming that it's a real complaint, Kolevzon is probably entitled to coverage under the policy IN THAT ACTION. I vaguely recall the policy itself being listed as an exhibit in one of the docket items. I also vaguely remember it being far too long for me to justify paying pacer for.
I haven't read the directors and officers insurance policy.....hell, I can't even follow my own homeowners policy. But these employees, who presumably are covered for defense costs or "losses" should they be sued for actions taken as employees of the insured, aren't being sued for any such losses or actions(according to the motion). They appear to be seeking coverage under the policy for the cost of counsel to advise them in their positions as witnesses. The class action plaintiffs don't want to see funds used in that fashion, given that they would hope to recover the remaining value of the policy after the attorneys that are actually defending clients are paid.
That's the way I read it anyway. And if the above is correct, I think the plaintiff's motion will succeed (I think that it would be very rare for a D&O policy to cover the costs of counsel for witnesses.).
I suppose, should one of those witnesses refuse to testify or perjure themselves that they then might be charged, but even then, I doubt that they would be covered.
Just ruminatin'.
dp,
In case you're curious:
1. Probably not.
2. Undoubtedly at least one, probably more......wish I had the chutzpah.
3. The facts presented are not supported by the documents and the rumor probably isn't valid either. As of 10 minutes ago all the ownership information on the FCC website for the stations appearing at the link indicates the following:
Street Address
P.O. BOX 4826
City
GREENWICH
ZIP Code 06831 -
Telephone Number 2033237300
E-Mail Address GREENWICH4@AOL.COM
You may recognize the E-mail address from the MSG exhibits and elsewhere.
http://www.sec.gov/Archives/edgar/data/1393934/000114420409044997/v158288_8k-a.htm
"In order to gain a better market presence in the New York City metropolitan area, and, at the time, to consolidate operations to the same location, BTRN purchased WGCH Radio from Greenwich Broadcasting in Greenwich Connecticut for $1.1 MM in June, 2003. In addition, in order to increase coverage and to penetrate the fast growing financial markets, BTRN purchased KNUU AM in Las Vegas for $3.9 MM and WXBR AM in Brocton, Massachusetts for $1 MM. Finally, in August, 2007, we consummated the purchase of WURP AM in Pittsburgh for $235,000."
There may be other stations that I'm not aware of.
Denial prevails.
"If Mosko is lying, and that has to be considered for sure, why is'nt the DOJ putting him behind bars and whats more they even allowed him to visit homeland !!! Don't you see something fishy in how the courts are behaving?"
Is it not possible that he is being allowed the freedom to travel in order to allow the authorities to "follow the money"?
"Dose it make sense that SPNG purchased Dicon lock, stock and barrel, Dicon became a subsidiary, and Dicon was allowed to be sold independently? What planet is this judge living on?"
SPNG did not buy Dicon's lock, stock and barrel separately. It bought the membership interests of the LLC Dicon, which maintained its identification as a legally separate entity. Dicon was not "allowed to be sold independently".....the involuntary bankruptcy filing against that entity allowed its trustee to sell certain of Dicon's ASSETS in the interests of its creditors. The Dicon estate lives on, as does SPNGQ's ownership interest. The judge lives on this planet and follows the bankruptcy laws thereof.
"Metter loaning 6 million of SPNG/RME funds to BTR is already proven......"
No, it isn't. There are no funds known as SPNG/RME funds. The 8-k filed by BTR's parent company, Blue Star Media Group, indicated that the loan came from RME and made no mention of Spongetech. The loan agreement does not contain the name Spongetech.
If I was Trustee Silverman I too might be hesitant to tout a note as an asset that doesn't have the name of the estate I represent in it's pages.
I hope that the "things to unfold" have more substance than the above, otherwise the only reason that they might bear watching would be to provide the necessary corrections.
Spongetech fans smell a naked, short rat
Crain's New York
Aaron Elstein
on September 28, 2010 1:52 PM
It seems as if the naked portion of the always-fascinating Spongetech Delivery Systems case will have to wait.
Last week, a federal bankruptcy judge denied a motion from some shareholders to investigate allegedly illegal naked short selling of Spongetech shares. And what, pray tell, is naked short selling? More on that in a minute, though I'll admit right now it's not what it sounds like.
Spongetech was a New York-based sponge-maker and prominent advertiser at Mets, Yankees and Knicks games before management was charged with criminal fraud in May and the company collapsed into bankruptcy. Prosecutors say 99% of Spongetech's purported sales were fake.
Now, one would ordinarily think a company that is accused of cooking up essentially all its sales would be an excellent candidate for failure. But that is not what is believed by some Spongetech investors, who appear to have rooted for the company as fervently as the cowbell-carrying Hilda Chester rooted for the Brooklyn Dodgers.
These Spongetech fans, in the words of U.S. Bankruptcy Judge Stuart Bernstein, "allege that the naked short selling resulted in a proliferation of purported shareholders, an inability to identify them and ultimately, the destruction of Spongetech's business."
Now, a few words about naked short selling. In a conventional short sale, an investor sells stock borrowed from a broker that he hopes to replace later with shares bought at a lower price. But in naked shorting, the stock is never formally borrowed and the result, say people who believe this is a serious problem, is a permanent dead-weight of selling on a small company's stock. The SEC has investigated and determined most such "borrow failures" are the results of administrative snafus rather than bearish plots, but nonetheless decided the problem was real enough to in 2004 adopt a rule to restrict naked shorting.
Nonetheless, there is a group of people -- journalist Gary Weiss aptly calls them the "baloney brigade" -- who believe naked-short selling conspiracies continue to thrive and bring down worthy companies. On my desk I have a 2005 letter from the general counsel of a company called Universal Express in which he says he has faxed me 85 pages of background material on "the national 'naked shorting' scandal, now popularly referred to as 'Stockgate.'" The lawyer, Chris Gunderson believed his company was a victim of naked shorting; in 2007 the SEC charged him with fraud.
If in fact Spongetech was brought down by naked short-sellers and not, as the government contends, deceitful management, it will be up to the investors to find out. Judge Bernstein in a ruling last week acknowledged that the allegations are "serious, and obviously relevant to the administration of the case and Spongetech's financial affairs." However, he added, Spongetech appears to be insolvent and its estate lacks the money to conduct an investigation.
"It would be inappropriate to force the creditors - who are also victims - to shoulder the cost of the investigation that is sought," the judge wrote.
Let us wish the Spongetech sleuths well should they pony up enough money to uncover the real truth.
(note: posted prior to reading.)
"7. You agree that you will not, at any time, during the term of this Agreement, and for one (1) year following the termination of this Agreement or your employment hereunder, either directly or indirectly, engage in, with or for any enterprise, institution, whether or not for profit, business, or company, competitive with the “Business” of the Company or SpongeTech as such Business may be conducted on the date thereof, as a creditor, guarantor, or financial backer, stockholder, director, officer, consultant, advisor, employee, member, or otherwise of or through any corporation, partnership, association, sole proprietorship or other entity; provided, that an investment by you, your spouse or your children is permitted if such investment is not more than four percent (4%) of the total debt or equity capital of any such competitive enterprise or business. SpongeTech shall have the right in its sole discretion to waive this covenant not to non-compete. As used herein, the term “Business” shall mean, with respect to the Company, the development, manufacture and distribution of products derived from “Hydrophilic Urethane Chemistry,” and with respect to SpongeTech, the development, manufacture, sale and distribution of hydrophilic polyurethane and polyurethane sponge cleaning and waxing products."
Which of the following Bell Pharmaceutical Products or lines of business in the links that YOU provided competes with the "Business" as defined?
PRODUCTS
Bell Pharmaceuticals offers a broad assortment of our own branded products available for mass retail distribution. Our team can work with your company to distribute our branded products in your retail locations.
A sampling of our our branded products includes:
*Caffeine Stimulants (JET-ALERT)
*Hand Sanitizers (HAND-ALERT)
*Motion Sickness (TRAV-L-TABS)
*Ear Ache Relief
*Breath Mints
*Lip Balm
"CELIA didn't catch Silverman's pre-lawsuit WARNINGS"
"What is it that Wayne did not understand in these VERY CLEAR pre-lawsuit warnings sent by Trustee Silverman?"
There's a lawsuit?
The linked letter is from 2005, but I thought that it was still interesting in that some of the concerns it addressed apply to Spongetech.....according to some. The amendment that was sought was passed in 2006, solving some of the transparency issues that existed in the OTC.
http://www.otcmarkets.com/otcguide/issuers_shortsellingletter.jsp
http://sec.gov/rules/petitions/petn4-500.pdf
Judge Bernstein has something to say (apologies if this is a repeat):
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------X
In re:
:
:
SPONGETECH DELIVERY
:
Chapter 11
SYSTEMS, INC.,
:
Case No.: 10-13647 (SMB)
:
Debtor.
:
------------------------------------------------------X
MEMORANDUM AND ORDER REGARDING SHAREHOLDERS’
REQUESTS FOR VARIOUS FORMS OF RELIEF
Numerous shareholders of the debtor (“Spongetech”) have written to the Court
asking for a variety of relief relating to proceedings in this case and in the chapter 11 case
of Spongetech’s affiliate, Dicon Technologies, LLC (“Dicon”), Case No. 10-41275,
which is presently pending before Bankruptcy Judge Lamar W. Drake in the United
States Bankruptcy Court for the Southern District of Georgia (the “Georgia Court”).
None of the relief is sought by formal motion. The Court cannot grant any of the
requested relief for the reasons stated below, but some preliminary background is helpful.
Spongetech, a Delaware publicly-held corporation, manufactures, markets, and
distributes cleaning products, including car sponges, pet sponges, bowl cleaners, and
child bath sponges with licensed characters such as SpongeBob, Pink Panther, and Dora
the Explorer. Spongetech is also the sole member of Dicon. On or about June 18, 2010,
an involuntary petition was filed against Dicon in the Georgia Court. Relief was ordered
under chapter 11 on or about June 29, 2010, and Lloyd T. Whitaker has been appointed
the chapter 11 trustee. Spongetech filed its own chapter 11 petition on July 9, 2010. The
Court directed the appointment of a chapter 11 trustee, and Kenneth Silverman now
occupies that office.
It appears that the Dicon trustee has noticed a sale of assets in the Dicon case, and
the shareholders object. They have asked me to deny or prevent the sale. In addition,
they have asked me and Judge Drake to combine the two cases, apparently in New York.
I, however, have no jurisdiction over the Dicon case; only Judge Drake does. To the
extent the shareholders oppose the sale or seek relief in the Dicon case, they must present
their requests to Judge Drake. Similarly, as the Dicon bankruptcy case was filed first, the
shareholders must move in the Georgia Court to transfer the venue of Dicon to this Court.
See FED. R. BANKR. P. 1014(b).
Finally, the shareholders have also asked me to look into the “illegal” naked short
selling of Spongetech stock. They allege that the naked short selling resulted in a
proliferation of purported shareholders, an inability to identify them and ultimately, the
destruction of Spongetech’s business. The allegations made by the shareholders are
serious, and obviously relevant to the administration of the case and Spongetech’s
financial affairs. Unfortunately, the estate lacks the money to conduct the investigation
they request. Furthermore, Spongetech appears, at this point, to be insolvent. Under the
circumstances, it would be inappropriate to force the creditors – who are also victims – to
shoulder the cost of the investigation that is sought. The shareholders may, of course,
conduct an investigation at their own expense consistent with the Bankruptcy Code and
Rules.
So ordered.
Dated: New York, New York
September 23, 2010
/s/ Stuart M. Bernstein
STUART M. BERNSTEIN
United States Bankruptcy Court
Editor note: Replace Drake, where it appears, with Davis.
The initial Scottrade response to the question at the end of my last post wasn't of any value, so I asked it again. This came back:
Dear XXXXX:
We regret not answering your questions in the previous e-mail. It is true that some securities are not eligible for transfer through Direct Registration System (DRS). DRS transfers are limited to shares that are already held in "Book Entry" format. Book Entry refers to shares that are held as an electronic record. These are also the shares that are held and transferred between brokerage firms like Scottrade.
For the transfer of securities that are brand new or held as a stock certificate, these transfers are handled through a process called Debit Withdrawal at Custodian (or DWAC for short). In this process, the transfer agent acts as custodian (as opposed to brokerages acting as custodians with DRS). The transfer agent transfers shares to brokerages through the Depository Trust and Clearing Corporation (DTC).
We hope this information helps and we encourage you to reply if there is anything else that we can assist you with.
Sincerely,
Jeff K.
National Service Center | Scottrade, Inc.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Dear Jeff K.:
Thank you for the on point response and consider me encouraged. The issues are complicated and your and Scottrade's willingness to help me gain a better understanding of them is duly noted.
The shares of interest are definitely Book Entry shares (neither "new" nor in certificate form) and hence, based on your response, are in brokerage custody and eligible for transfer. Based on an earlier response, I understand that this would allow the electronic record establishing my ownership to be transferred to the transfer agent, who would then be in a position to issue me a certificate. (For the record, I realize that any subsequent attempt to sell the shares would require some messy maneuvering, but that is not an issue for me.)
That clears up the mechanics for me nicely. However, I'm still left with my original underlying concern per my initial inquiry:
"If I were concerned about the legitimacy of my shares in a given company, that is to say if I wanted to confirm that my shares were actually shares issued by the company and not created in a short sale in which they were not delivered to the party from whom they were purchased on my behalf, could I receive my shares in certificate form?
Would the receipt of such a certificate establish that the shares were actually issued by the company?"
Thanks again.
Regards,
XXXXXXXXXX
FWIW, a non-answer re NSS and certificates (italics mine):
To: Scottrade Customer Support <support@scottrade.com>
Subject: Other
If I were concerned about the legitimacy of my shares in a given company, that is to say if I wanted to confirm that my shares were actually shares issued by the company and not created in a short sale in which they were not delivered to the party from whom they were purchased on my behalf, could I receive my shares in certificate form?
Would the receipt of such a certificate establish that the shares were actually issued by the company?
I did not see a listing in your fees of a charge for issuance of a certificate. What is it?
Dear XXXXX :
In reference to your question regarding stock certificates:
We no longer offer physical stock certificates. This change was made in response to an initiative by the Depository Trust & Clearing Corporation (DTCC) to eliminate physical certificates.
DTCC discontinued the issuance of physical certificates for most securities on Jan. 9, 2009 and the remaining stocks were discontinued in July 2009. This is a Securities and Exchange Commission (SEC) approved, industry-wide change that will affect all investors regardless of the brokerage firm issuing the certificates.
If you still wish to receive a physical stock certificate, and the security is eligible to transfer through the Direct Registration System (DRS), you can have your shares transferred to an account with the company's transfer agent at no cost. You will need to complete an “Outgoing Direct Registration System Request” form and submit it to your local Scottrade branch office for processing. This form is available online through our Forms Center under the “Individual Forms” section. Please contact your local branch office for assistance in determining whether your security is eligible for transfer through the DRS system.
Please keep in mind that not all securities are eligible to be issued by the transfer agent in physical certificate form. As such, you may want to contact the transfer agent of the company first to verify that a physical stock certificate can be issued and to determine the fee(s) they may charge.
Please let us know if we may be of further assistance.
Sincerely,
Jason L.
National Service Center | Scottrade
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Follow-up just sent. Will post answer. I have the feeling that this is going nowhere, though.
Dear Jason L.,
I appreciate the prompt response.
You have made it clear that only certain securities are eligible for transfer through the DRS, allowing subsequent certificate issuance to me by the company's transfer agent. What is the specific characteristic that makes certain securities eligible for transfer and others ineligible?
I am hoping that your response will give me a better understanding of whether the receipt of such a certificate would establish that the shares were actually issued by the company, the unanswered and underlying point of my initial inquiry. I would prefer to understand the actual value of the process before contacting my local office to determine if it can be implemented.
Thanks in advance.
Regards,
XXXXXXXXX
My new favorite is "upon information and belief".
The legal dictionary says it means pretty much what it says:
"I am only stating what I have been told, and I believe it."
The phrase was used many times in Silverman's Objections to the sale of Dicon......and the context for its use in most cases suggests that the source of the information was.....well, you know who it was. It's too bad that the system allows the use of that phrase even in cases when the user, in order to make a point, employs it when he doesn't really "believe it". I'll bet there was a fair amount of that in this filing and undoubtedly others.
re: "It should also be noted that Mr. D’Amaro cooperated with the Government, he sat for debriefings three times and provided information outside of the relevant conduct for this charge (information on possible illegal conduct by a California Lawyer and associated parties and information attesting to illegal conduct that may have led to or supported SEC case no: CV10-2031, defendant Spongetech Delivery Systems, Inc and Harmon Trading.)[1]
[1] Mr. D’Amaro was not involved in any illegal conduct regarding these issues."
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
"A Delaware judge has sentenced Gerard D'Amaro, the Florida man who pleaded guilty to charges stemming from the pump-and-dump of Ontario-based Playstar Corp., to three years in jail. He learned his sentence in an appearance before Judge Sue Robinson on Sept. 8, 2010.
Mr. D'Amaro reached a deal with prosecutors earlier this year, in which he agreed to plead guilty to two counts of a four-count fraud indictment. The charges were for helping to manipulate Playstar and other stocks with on-line postings and wash trades. In addition to the three-year sentence, the judge ordered Mr. D'Amaro to forfeit $1.49-million in proceeds of crime. (All figures are in U.S. dollars.)"
http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1762459&symbol=*SEC&news_region=C
Did D'Amaro provide any valuable info to the SEC regarding SPNG and, if so, what was the subject matter?
"PS: what??
We also believe that this was achieved through a criminal act."
That question was asked a couple of hours ago:
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=mm&bn=100008&tid=253780&mid=253780&tof=-1&rt=1&frt=2&off=21
The author and sponsor of the petition offered no explanation beyond the following:
"I know what its all about. So do both judges. That's all that matters."
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_S/threadview?m=mm&bn=100008&tid=253780&mid=253791&tof=-1&rt=1&frt=2&off=1
http://www.ipetitions.com/petition/save-dicon/
The Petition
To The Honorable Chief Judge Stuart Bernstein, the Honorable Judge Lamar Davis, U.S. Trustee Elizabeth Gasparini, U.S. Trustee Joel Pasche, Mr. Kenneth Silverman and Mr. Lloyd Whitaker.
We the undersigned shareholders of SpongeTech Delivery Systems humbly but strongly request that the proposed sale of Dicon assets be denied. It has come to our attention that Mr. Celia's accountant is on the creditors committee. We also believe that this was achieved through a criminal act. We also believe that there is a huge conflict of interest regarding this issue. The creditors committee CANNOT be unbiased when this is the case. The creditors committee has already turned down a better offer than Mr. Celia provided. We also believe Mr. Celia orchestrated Dicons involuntary bankruptcy.
We also humbly request that The Honorable Chief Judge Stuart Bernstein and The Honorable Judge Lamar Davis work together to combine the SpongeTech and Dicon bankruptcy's together. Mr. Whitaker the trustee for Dicon has a ZERO track record for bringing a company out of bankruptcy. Mr. Silverman has at least shown an interest in bringing SpongeTech out of Chapter 11.
By combining the bankruptcies and denying the sale of Dicon Mr. Silverman can better satisfy all the creditors. The companies SpongeTech and Dicon along with the shareholders and anyone else concerned. Surely this is better than only SOME creditors being paid with everyone else taking a complete loss.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
ORDER APPROVING APPOINTMENT OF CHAPTER 11 TRUSTEE
WHEREAS, Pursuant to this Court's Order dated June 24, 2010, the United States Trustee
has, after consultation with parties in interest, appointed Lloyd T. Whitaker as the Chapter 11
Trustee in this case,
IT IS HEREBY ORDERED, that the United States Trustee's appointment of Lloyd T.
Whitaker as the Chapter 11 Trustee in this case is approved in accordance with II U.S.C. § 1104.
IT IS FURTHER ORDERED, that said Chapter 11 Trustee shall have all powers enumerated
in II U.S.C. § 1106(a).
Dated: 9/21/10
LAMAR W. DA JR.
UNITED STATES BANKRUPTCY JUDGE
SOUTHERN DISTRICT OF GEORGIA
LOL...Man's best friend.
Can you tell what the filing I linked says, or are you saying that it doesn't matter because it is superseded by the action taken by SM?
Note that it is headed NYP Holdings, Inc, et al, implying (to me, anyway) that whatever it says applies to all parties.
patchman,
I can't tell if this scrawled gibberish is the document that you are referring to, resulted in the document that you are referring to, or is in response to the document that you are referring to. It shows a date filed of 8/26, suggesting that it precedes the Moskowitz filing.
My guess is Door#2, but it's a mess.
http://decisions.courts.state.ny.us/fcas/fcas_docs/2010AUG/3006010472010001SCIV.pdf
Plaintiff "Sponaetech".
EDIT: IN CASE THE LINK WON'T LOAD, GO VIA:
http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=601047-2010
K,
Long time no see. Hope you are well.
My two ideas are almost 6 months old and they were awful (so far).
This came across the wire today and also promises to be awful, but interesting. From Crain's NY:
In the Markets
Say hello to the most overpriced stock ever
By
Aaron Elstein
on September 21, 2010 2:07 PM | Share | Comments (0) | TrackBacks (0)
The most overpriced stock ever just might belong to a tiny start-up company whose headquarters are listed at 100 Wall St.
The company, called Prime Sun Power Inc., says it's pursuing a business model producing solar-generated electrical power and other alternative renewable energies. Its stock fetches 70 cents a share on the OTC Bulletin Board, a quotation service for companies that don't qualify to list on an exchange.
Now, 70 cents may not sound like much, but it gives the company a market value of $28 million, which is absolutely sky-high considering the company has only $688 in assets. That's right, six hundred and eighty-eight dollars in assets, all in cash. In other words, the company's stock trades at 40,698 times its assets.
Even for the wild and wooly world of Bulletin Board stocks, this is pretty wacky stuff.
According to its most recent quarterly report, Prime Sun Power has some solar power projects underway in Europe, though nothing is close to being completed. No surprise, its big problem is its lack of resources.
The company says it needs to raise $2 million in additional funding in order to "conduct proposed operations" for the next year. It also says it would need another $19 million just to obtain the required licenses to begin construction on all of its contemplated projects. It would then need to arrange bridge loans to pay for the construction.
At least the company's costs are low. Its sole employee is its acting chief executive, a gentleman named Olivier de Vergnies, who, according to the company's annual report, is a former vice president at Dexia Private Bank in Switzerland, where he specialized in serving "Middle Eastern high net worth individuals." He's also former CEO of a New York-based company called 4C Controls, a penny stock that soared to $10 in 2008 before collapsing. He didn't return a call seeking comment.
Meanwhile, a California-based solar panel manufacturer called Sunpower Corp. has demanded that Prime Sun Power stop using the words "Sun Power" in its name and threatened legal action. Prime Sun Power says it has determined it will be "economically more rational" to change its name rather than engage in litigation and plans to adopt a new name by the end of the month.
It will certainly bear watching what name Prime Sun Power emerges with.
That's too bad. It is a quirky website, but I'm surprised that it was a total wipeout for you. As you probably noticed, toxic pretty much confirmed my findings so I'm reasonably satisfied that I didn't miss anything...including any reference to an attachment, which should have been published in the docket anyway.
I believe S&A simply screwed the old pooch.
You and toxic work for NASA or what?
I was perfectly happy with my numbers before I asked. Now, thanks to my own idle curiosity, I have a whole new reason to feel inadequate.
Terrific. I'm very happy for you.
:o)
http://www.scribd.com/doc/37813583/9-20-10-Dicon-Doc-162-Operating-Report-Aug-1-31
Some surprises.
More interesting is Docket#161, which is Whitakers response to the objections to his appointment. Unfortunately I haven't found it posted anywhere other than pacer, so no link.
Impressive.
Retirement does not offer (or require) such luxuries.
Thanks for the confirmation.
Did you try this?
http://www.speedtest.net/
If you have a minute, try it and then tell me what's going on in the 21st century that I'm missing out on.
Did Trustee Silverman use his hired accountant for help with this?
Again, from his Objections to the sale filing:
"However, the motion is silent on why the sale of assets valued on the July Balance Sheet in excess of $3,000,000.00, for a purchase price of $625,000.00, is warranted at this time."
Did he not notice that amongst those other $2,375,000 of assets was a building capitalized at $2,000,000+ and that the Liability section of that same Balance Sheet reflects a $2,600,000 Lease Liability for that building that is scheduled for assumption by the Proposed Purchaser?
And:
"However, the July Operating Report also shows that, during the period from June 29, to July 21, 2010, Dicon had net ordinary income of $682,280.25 and cash receipts in excess of disbursements of more than $34,000.00. Dicon’s business is not a moneylosing enterprise sapping the estate of large volumes of cash, nor are there wasting assets that must be preserved by an expedited sale."
I wonder how he will respond to the court when he is asked to explain how Dicon got $682K in income from $60K in sales. And whether that ratio can be expected to continue.
And I wonder if he will be able to address the likelihood that the $34K in positive cash flow, or any kind of positive cash flow, can be anticipated going forward if that $34K resulted from total receipts for the period of $110K in A/R collections in a period when retail sales were $60K. Will that continue as well?
Trustee Whitaker has a financial firm, too (OK, so it's literally Whitaker's financial firm). And I suspect that it will point out the pointlessness of the above to the court. Trustee Silverman's other Objections need to be better founded if he hopes to stall the sale.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=54533639
If memory serves, tomorrow we get to find out if Whitaker keeps his job and on Thursday the sale gets kicked around.
Popcorn time.
The website is slow and clumsy to navigate.
That said, #133 just loaded in about 15 seconds for me with my cable modem and basic Imac machine. These things, like us, can have a bad day once in a while, but it sounds like much of the problem is with your snailatron 3000 or the nature of your service.....if it's dial-up you're one of a dying breed and my experience with dsl was poor. If you're curious about this you can go to the following and click Begin Test:
http://www.speedtest.net/
For frame of reference my Download speed was just 14.84Mb/s.
Back to #133:
It's just the petition from the long board on the consolidation. There are some shareholder comments, but trust me, no one that signed the long board petition used it to express a strong interest in making a bid for the consolidated S/D assets for a significant sum.....or any sum. So you might want to skip it and see if the individual letters load more quickly. Or you may want to abandon the project, which I would definitely understand but find a bit of a bummer....it would be nice if SOMEONE could confirm my findings. Frankly, if I were you and I thought the whole thing would take me more than the 20 minutes that you've already invested I'd probably throw in the towel.
Whatever you do, I appreciate the effort.
My fault.....sorry. Hope I didn't waste too much of your time. I went back and checked and the process I told you to use didn't scroll through ALL her documents. I can't think of a good excuse (See curly's quandary below).
Go to:
http://www.scribd.com/cbrenn2/documents
At the BOTTOM RIGHT of the page you'll see page numbers. Each page has a certain number of documents on it, some of which are the letters. If this doesn't work I'll give you my home address and you can come smack me around.
pj,
Thanks.
Christine Brenner, a very active shareholder, has been kind enough to post the letters and MANY other case documents on scribd (she also got unceremoniously dumped by the Long Board "owner", but that's another story).
It takes a little poking around, but you will find them all here (except for the #149 non-letter):
http://www.scribd.com/cbrenn2/documents
There are a couple arrows on the top left of the screen that will allow you to fast forward through the docket numbers quickly. I wish I had noticed them earlier.
ab,
Thanks. As usual, I can't add much to what oa posted.
I "suppose" that SPNG's trustee looked at the SPNG assets.....AR, INV, etc.?.....and concluded that they wouldn't amount to much if he could successfully turn them into cash. If he could get the court to consolidate the cases he could access Dicon's assets and sell them, as Whitaker is trying to do....thereby adding to the available cash. At this point, as noted, he is looking for ways to get himself paid....the so-called administrative costs of bankruptcy (trustees, accountants, lawyers) are prioritized as cash becomes available.
The Dicon creditors, at least those that filed the involuntary petition, primarily are concerned with the successful reorganization of the Dicon operation so that they can go back to doing business with a supplier/tenant, etc. that they had a profitable relationship with....their filing was more of a rescue attempt than an effort to get their debts paid. They would not be happy to see the sale of assets to the current Proposed Purchaser (Celia and co.) disrupted. As in the SPNG case, administrative costs are paid first.....if Whitaker is able to keep the cases separate and sell the assets for the agreed upon price, the unsecured creditors might see a couple bucks worth of leftovers....they are unfortunately no one's priority. If there are any unpaid salaries they would be paid ahead of them also.
All, as requested, suppositions on my part.
"That's an 84 page document I'd like to read."
VD,
Knock yourself out.
http://www.scribd.com/doc/37703313/9-18-10-Dicon-Doc-158-Notice-of-Filing-of-Supplement-to-Whitaker-Sale-Motion
Just to make sure this thing isn't broken (no posts all day), I'm gonna type something and see if anything happens.
Yesterday I posted the following passage from Silverman's Objections to the sale of Dicon's assets:
"43. During the past two months, the SpongeTech Trustee has been approached by numerous SpongeTech public shareholders who have expressed a strong interest in submitting a bid for the consolidated assets of Dicon/SpongeTech. See Separate letters from SpongeTech shareholders, filed with the Court as Docket Nos. 133-135, 139-141, 144-145 and 147-149. The shareholders have indicated to the SpongeTech Trustee a strong interest, subject to due diligence, to consider a significant purchase price for the consolidated assets of Dicon and SpongeTech."
We had a little chuckle about the due diligence thing.
Then I read it again. I'll summarize it...and I'd like to hear from anyone, absolutely anyone, that feels that this misrepresents what it says:
Silverman has received a bunch of letters, recorded in the case under certain specific docket numbers, from shareholders who have expressed a strong interest in submitting a bid at a significant price for the consolidated assets of Dicon and Spongetech.
It does say that, doesn't it?
Well, somehow I found myself able to simultaneously read those letters and watch a thrice(?) retired old man with an M on his hat perform more like a bunny than a viking for the second week in a row. And guess what. NOT ONE of those letters from shareholders "expressed a strong interest in submitting a bid at a significant price for the consolidated assets of Dicon and Spongetech". Docket 149 isn't even a letter from a shareholder. In fact, it isn't a letter.
I can think of a half dozen people that could be expected to have this kind of "accident", none of whom has the word Trustee ahead of his name.
I hope that at least one person will take the time to read the letters and prove me wrong. I'd almost rather be proven wrong and have to apologize than think that the Trustee and his partner/attorney intentionally deceived the court on an issue that the court is sure to question. The import is that there are known bidders and the court will read those letters to see who they are. The urge to consolidate must be very strong....it seems to be affecting some people's judgment.
It's not that impressive a document...you would probably find yourself wondering what made you think that you would like to read it in the first place after you read it.
Where Silverman's Objections make for a reasonably dramatic presentation:
e.g. "Finally, because of the deep involvement of at least one of the Bidder’sprincipals, who is subject to a contractual non-compete agreement in favor of SpongeTech, in the management of Dicon, the licensing of critical technology and intellectual property and the
rapid demise of Dicon after its acquisition by SpongeTech, this proposed sale to an affiliate of
an insider should be deeply scrutinized and should not be approved, if at all, until after a substantially greater investigation than has been performed to date."
Whitaker's Supplement is a fairly straightforward, almost list-like document. It provides:
1. An Asset Purchase Agreement.
2. A proposed Sale Order for the judge to sign.
3. A pro forma release between Dicon, the Trustee and the Proposed Purchaser.
4. A pro forma release between Dicon, the Trustee and HH Brown.
5. 2 documents dealing with the the assumption, assignment and amendments to the existing lease agreement as they apply to Dicon, the Trustee, the Proposed Purchaser, the Development Authority and the Bank.
And that's pretty much it. It remains to be seen whether the Georgia Court considers his total package to be adequate to allow the sale to go forward. The releases address Silverman's concerns, but will certainly not satisfy them. Silverman wants the process held up until he can get a determination on the consolidation of the 2 cases. This process has the potential to be mindboggling....toss in the hearing on whether the Dicon Trustee is really the Dicon Trustee on Tuesday.
As to the issue of Silverman's compensation, it is capped in the bankruptcy law as a percentage of what the trustee is able to recover for the benefit of the debtors estate......and it ain't much. That's why you see both Whitaker and Silverman hiring their own firms as counsel....Whitaker I believe is a principal in the financial firm and I wouldn't be shocked to find out that there's a pre-existing relationship between Silverman and the numbers guys in NY. None of those guys fall under a calculated cap constraint, although their fees are subject to a reasonableness test by the court. In case it isn't obvious, I'm not a lawyer...this is strictly a belief based on my reading of what I believe is the governing law:
http://www.law.cornell.edu/uscode/11/usc_sec_11_00000326----000-.html
The way these "professionals" are putting in the hours they better find a way to unearth some buried treasure and I'm not sure that the Proposed Purchaser's $625K is gonna cover their nut no matter how it gets divvyed up.
ps. Pacer is worth the bucks when scion is out of town. $.08/page BUT if a document exceeds 30 pages they only charge you for 30.