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September 2009 was a big month in the history of Spongetech in terms of public awareness. One of the reasons for that is no longer with us:
In memory of Robin - Star The Wonder Pup - Robert Kirk Jr.
By: scion in FAKE
Fri, 06 Aug 10 8:33 AM
http://www.atomicbobs.com/index.php?mode=read&id=542365
"Subject: RE : Not Spongeworthy ATTN: Kaja Whitehouse
Priority: Normal Date: Thursday, September 17, 2009 10:48 AM Size: 2 KB
I don't know if you have any plans for follow-up of the SpongeTech story, but if
you do I have some significant information regarding the likely fraudulent
promotion and regarding the SEC's lack of action in this matter despite early
documentation of fraud."
http://www.atomicbobs.com/index.php?mode=read&id=447024
Biting the hand......
The uncompensated attorney who has been acting on behalf of himself and some Spongetech "longs" is W. Darrell Whitley.
http://viewer.zoho.com/docs/gqq9e
"mktgmatters" posted this today:
"UPDATE TO SHAREHOLDERS FROM DARRELL WHITLEY, AUGUST 7, 2010:
Many shareholders are concerned over their investment in SPNG.
Everyone is concerned about its value being diluted or stolen by other
entities. One thing shareholders can do to avoid reducing the value of
their investment is to minimize the cost of the administration of the
bankruptcy estates, both in NY and Ga.
Every letter, call and email to the trustees in the Dicon and
Spongetech bankruptcies in effect costs shareholders money. Both the
courts in NY and GA are well aware of the issues at this point. The
fiduciaries cannot keep administrative costs to a minimum if they have
to review and catalogue numerous letters, let alone respond to them.
It also takes time away from working on resolving the issues at hand.
Although I cannot ask you to stop contacting these entities, I would
like you to consider if the continual communications at this point in
time are in our best interests as shareholders.
SPNG Bankruptcy:
Shareholders have been asking for accurate and current information
about Spongetech and its ongoing bankruptcy. Soon a website will be
set up by the Trustee to provide links to court documents and other
information of concern to shareholders. The website will also be
interactive so shareholders can get feedback. Though each day may seem
like an eternity for waiting on transparency into the process, we are
actually early into the bankruptcy. As a shareholder, it is my opinion
we need to let the Trustee perform his duties of gathering facts and
information so he can make informed judgment calls on what future
actions need to be taken with Spongetech.
In addition to the website, once sufficient information is collected,
a meeting will be held in a town hall format. This may be live or in
the form of a webinar. Shareholders will then be updated on more
details and will be given a chance to ask questions of the Trustee and
counsel.
DICON Bankruptcy:
In response to concerns regarding the Dicon bankruptcy, it appears
from court records that the Dicon Bankruptcy is proceeding normally –
if there is such a thing with bankruptcy. Contrary to what many have
indicated in blogs, there does not seem to be any predisposition on
the part of the fiduciaries to liquidate the plant. It appears they
are acting to determine assets and liabilities, as is their
responsibility. I expect schedules to be out by the due date and
shareholders will have more transparency into the overall situation
concerning debts and assets.
TERMINATION OF CASES:
Some confusion exists to the termination of the criminal cases of
Moskowitz and Metter. The two were initially charged under a criminal
complaint. With the indictments, the complaints became unnecessary to
the criminal charges against the two. The DOJ will proceed with the
prosecution of both cases pursuant to the indictment, thus the
termination of the complaint."
The "Owner" of the SPNG Long Board responded:
Musicman
Aug 7, 3:10 pm
"We have been excluded from working with Daryll. We are not allowed
input to Daryll. We appreciate the updates, however this one sounded
more like an order to back off. The Long Board will do as it always
has. Which is to look out for our own best interests. Nobody cares
about us like we do and we've proven we can take care of ourselves.
Since I have been left with no other venue to talk about this I have
been forced to talk about it here. Sorry if this offends anyone."
"SPNG market cap: $15mm.
Remarkable!"
"I happen to find the continued demand at these lofty valuations amazing."
Wadi,
As you can see I from the little FREE sign next to my name I am unable to respond to private messages.
I was not attacking you, but rather commenting on what I saw to be the folly of the above posts. In case others similarly misunderstood my comments I'll try to clarify them without the sarcasm that is occasionally my chosen tone and which seems to offend you:
I don't believe that it is a valuable investment technique to calculate the market value of a stock that goes from $.001 to $.005 on a volume of shares traded of 190,000, or somewhere between $190 and $950 in share value, as Spongetech did.
I don't believe that trading volume with a value of between $190 and $950 represents amazing continued demand. Even Spongetech's weekly volume of $15,000 or so in the current week, would not seem to fit the term "amazing".
The discontinuation of services in Spongetech shares by DTC seems to me to render any calculation related to trading an exercise in futility.
To avoid breaking any rules I will not quote from your message. However, I will not constrain myself to just saying I don't think people should sell or whatever it is I believe. That restriction would make this a dull board for everyone and Ihub doesn't limit people to their opinions. Facts can be fun, too! I will respond in the manner that suits me, within Ihub's rules, to the content of any post.
"Sorry if you were wishing for higher prices"
Not sure what makes you think that. It just struck me as an unusual exercise to calculate the market value of a stock for which there is no market. In fact, in the absence of a release of the DTC freeze it could be said that the market value is zero. Save those calculator batteries.
"Not many shares trading, but it adds up."
Sure does. This week it added up to over $15,000.
Remarkable!
Remarkable indeed!
And doing that math makes as much sense as calculating the percentage increase in pps over yesterday:
400% gain. Remarkable!
Presumably based on the specific charges in the indictment a new case# has been assigned to the criminal case and the previous case# has been terminated:
U.S. District Court
Eastern District of New York (Brooklyn)
CRIMINAL DOCKET FOR CASE #: 1:10-cr-00600-ARR All
Case title: USA v. Metter et al
Magistrate judge case number: 1:10-mj-00507-RER
Date Filed: 08/06/2010
U.S. District Court
Eastern District of New York (Brooklyn)
CRIMINAL DOCKET FOR CASE #: 1:10-mj-00507-RER All
Case title: USA v. Metter et al
Date Filed: 05/03/2010
Date Terminated: 08/06/2010
"The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty."
Ain't America great!
The above, regarding certain allegations, is a mere formality. That's right......I said it.
Unless you question the accuracy of the transcripts wherein the defendants acknowledged meeting representatives that don't exist of companies that don't exist and put their signatures on filings that reflected sales to those companies, you must accept that those allegations require no further proof.
In the 17th century Descartes is reported to have said (in French, of course) "I think, therefore I am". That was his philosophical proof of his own existence. If you propose to suggest that some other philosophical theory supports the existence of the representatives met or the companies that bought by all means have at it. I'm sure the United States District Court Eastern Division will evaluate that proof with an open mind. I doubt that it will require the Department of Justice to prove that they don't exist with any more evidence than that which we all, including those that would rather not accept it, have already had the opportunity to read.
"How does Kaja Whitehouse and the New York Post find out and then publish a story before Moskowitz's attorney finds out."
I'd love to know how you know when Moskowitz's attorney found out....please tell us......but maybe he's the one to whom you should be asking your question. Assuming that the underlying premise of your question is true and that SM didn't just decide that he'd rather not be the one to break the news:
The PUBLIC website of The United States Attorney's Office Eastern District of New York shows the pdf that reports the indictment. Based on the properties of that pdf it was:
Created on 8/4/10 at 4:24:16 PM
Modified on 8/4/10 at 4:35:55 PM
http://www.justice.gov/usao/nye/vw/Case%20Updates.html
The Post article was "Posted: 12:46 AM, August 5, 2010".
http://www.nypost.com/p/news/business/sponge_duo_indicted_JKiGsZZFNu4G4Y7u0aXfuK
Why are you not expressing disappointment that Kaja Whitehouse is always providing company news to shareholders ahead of company officials?
It would take more than one nutshell.
But
the SEC couldn't find the 5 customers that the company said provided the vast majority of their sales, doubted the accuracy of their SEC filings and PR's and questioned the basis for the issuance of millions of shares so they instituted a formal investigation and suspended the stock for 10 days. Simultaneously the company failed to file its 2009 10K and as a result was removed from the OTC Bulletin Board trading system, resulting in the inability of any market makers to quote bid/asked prices. The officers and the company were then issued Wells Notices. The SEC then filed a complaint against them and certain related parties. The DOJ, through the FBI had the 2 officers arrested and yesterday, 2 months after their arrest, they were indicted.
That's only one nutshell's worth of WTF is going on with SPNG.
Does the US District Court follow the New Jersey Superior Court criminal procedures that you posted?
Xeno,
A few days ago SM signed off on another 30 day tolling agreement.
Metter's existing agreement was scheduled to expire tomorrow:
http://viewer.zoho.com/docs/paX42
Is it possible that Metter indicated that he was not inclined to "grant" another extension, forcing the DOJ's hand in seeking an indictment?
I'm primarily asking to try and confirm my understanding
of the legal process, apart from the logic or lack thereof of his decision if indeed he made it.
"Despite my extreme reluctance to foster another over-the-top idea"
Hey grongron!
It's not that over-the-top. It's a great idea......at least William Wesley thought so back in May.
http://iapps.courts.state.ny.us/iscroll/SQLData.jsp?IndexNo=650403-2010
ab,
re: "I was under the impression some of the information required in the requested court filings would also be included in the 10k and/or the Q’s (or other mandatory filings.)"
I did not mean to suggest that elements identical to those that appear in a 10X were not required in the initial court filings. Only that the 10X's include complete financial statements whereas the court filings deal primarily with assets, their liquidity and liabilities. The SEC and the bankruptcy court have different interests and serve different constituencies....investors vs creditors.
"SPNG's alter-ego VAEV gets small loan "
$120,000 seems like a small loan, doesn't it?
But if one does some rough math, even ignoring the 20% conversion discount, the ownership percentage that a conversion would create if transacted today is pretty amazing.
At today's pps of $.006, the principal amount converts to 20,000,000 shares. The last reported o/s(6/22) was 52,739,807.
Of course 27%+ of what is a whole nother question.
"We trust the shareholders who appeared in court last week will immediately file and fund a plan for the
company to end the bankruptcy case."
Ya think he really means it?
I'll bet he would've rather asked "Now what, geniuses?"
:o)
ab,
re: "Further, SPNG is now delinquent with requested court filings.(which include financials. The same financials management has had over 400 days to prepare)"
The court filings that were due on 7/23 do not include income statements and most of the income statement items (cost of sales, most operating expenses, depreciation, etc.) that would have been and are ordinarily reported as part of the 10K's and Q's.
Some of the required schedules are:
Schedule A - Real Property (12/07)
Schedule B - Personal Property (12/07)
Schedule D - Creditors Holding Secured Claims (12/07)
Schedule E - Creditors Holding Unsecured Priority Claims (4/10)
Schedule F - Creditors Holding Unsecured Nonpriority Claims (12/07)
Schedule G - Executory Contracts and Unexpired Leases (12/07)
Schedule H - Codebtors (12/07)
One of the more important and probably most challenging documents required is a Statement of Financial Affairs.
http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_Official_2010/B_007_0410.pdf
I have compiled the items that the company is most likely to have to respond to....the form is designed for both individual and business filers so it includes a lot of stuff we don't care about. The form calls for certain information that might prove surprising.
1. Income from employment or operation of business
State the gross amount of income the debtor has received from employment, trade, or profession, or from operation of
the debtor's business, including part-time activities either as an employee or in independent trade or business, from the
beginning of this calendar year to the date this case was commenced. State also the gross amounts received during the
two years immediately preceding this calendar year.
3. Payments to creditors
b. Debtor whose debts are not primarily consumer debts: List each payment or other transfer to any creditor made
within 90 days immediately preceding the commencement of the case unless the aggregate value of all property that
constitutes or is affected by such transfer is less than $5,850*.
c. All debtors: List all payments made within one year immediately preceding the commencement of this case
to or for the benefit of creditors who are or were insiders.
4. Suits and administrative proceedings, executions, garnishments and attachments
a. List all suits and administrative proceedings to which the debtor is or was a party within one year immediately
preceding the filing of this bankruptcy case.
b. Describe all property that has been attached, garnished or seized under any legal or equitable process within one
year immediately preceding the commencement of this case.
5. Repossessions, foreclosures and returns
List all property that has been repossessed by a creditor, sold at a foreclosure sale, transferred through a deed in lieu
of foreclosure or returned to the seller, within one year immediately preceding the commencement of this case.
6. Assignments and receiverships
b. List all property which has been in the hands of a custodian, receiver, or court-appointed official within one year
immediately preceding the commencement of this case.
9. Payments related to debt counseling or bankruptcy
List all payments made or property transferred by or on behalf of the debtor to any persons, including attorneys, for
consultation concerning debt consolidation, relief under the bankruptcy law or preparation of a petition in bankruptcy
within one year immediately preceding the commencement of this case.
10. Other transfers
a. List all other property, other than property transferred in the ordinary course of the business or financial affairs of
the debtor, transferred either absolutely or as security within two years immediately preceding the commencement of
this case.
11. Closed financial accounts
List all financial accounts and instruments held in the name of the debtor or for the benefit of the debtor which were
closed, sold, or otherwise transferred within one year immediately preceding the commencement of this case. Include
checking, savings, or other financial accounts, certificates of deposit, or other instruments; shares and share accounts
held in banks, credit unions, pension funds, cooperatives, associations, brokerage houses and other financial
institutions.
18. Nature, location and name of business
If the debtor is a corporation, list the names, addresses, taxpayer-identification numbers, nature of the businesses,
and beginning and ending dates of all businesses in which the debtor was a partner or owned 5 percent or more of
the voting or equity securities within six years immediately preceding the commencement of this case.
19. Books, records and financial statements
a. List all bookkeepers and accountants who within two years immediately preceding the filing of this
bankruptcy case kept or supervised the keeping of books of account and records of the debtor.
b. List all firms or individuals who within two years immediately preceding the filing of this bankruptcy
case have audited the books of account and records, or prepared a financial statement of the debtor.
d. List all financial institutions, creditors and other parties, including mercantile and trade agencies, to whom a
financial statement was issued by the debtor within two years immediately preceding the commencement of this case.
20. Inventories
a. List the dates of the last two inventories taken of your property, the name of the person who supervised the
taking of each inventory, and the dollar amount and basis of each inventory.
21. Current Partners, Officers, Directors and Shareholders
b. If the debtor is a corporation, list all officers and directors of the corporation, and each stockholder who
directly or indirectly owns, controls, or holds 5 percent or more of the voting or equity securities of the
corporation.
22. Former partners, officers, directors and shareholders
b. If the debtor is a corporation, list all officers or directors whose relationship with the corporation terminated
within one year immediately preceding the commencement of this case.
23 . Withdrawals from a partnership or distributions by a corporation
If the debtor is a partnership or corporation, list all withdrawals or distributions credited or given to an insider,
including compensation in any form, bonuses, loans, stock redemptions, options exercised and any other perquisite
during one year immediately preceding the commencement of this case.
[If completed on behalf of a partnership or corporation]
I declare under penalty of perjury that I have read the answers contained in the foregoing statement of financial affairs and any attachments thereto and that they are true and correct to the best of my knowledge, information and belief.
Date
Signature
Print Name and Title
ps. I have absolutely no idea what recourse the court has for the failure of whoever is responsible at this point for not having filed the required documents on a timely basis. So I don't have any idea what incentive might exist for whoever is responsible to do so.
"Plus, I can't imagine that the US Trustee would let him just walk off the job and leave the BK to founder in the hands of former management."
You wouldn't think so.......that's exactly why I'm fishing around for some specifics.
That said, his mere presence doesn't provide him any authority once he has resigned. I think.
Yes, his attorney uses the phrase "intention to resign" in the notification to the court, but Hays himself announces "please let this serve as my formal resignation" in his letter to the US Trustee that appointed him.
The word "effective" doesn't appear in either document.
So we can either ASSUME that it's immediate as it would be in most circumstances in which a person announces his or her formal resignation or there may be precedent in the US Trustee/Chapter 11 Trustee relationship that calls for his remaining in place until a replacement is assigned.
We'll probably find out before we're done kickin' it around :o)
"it looks as if Hays will remain in charge until another is appointed."
pj,
that may be the norm, but I didn't see any wording that indicated that specifically. You did?
Stating that he is aware that the US Trustee is actively looking for a replacement wouldn't seem to be the same thing.
But it is a very important issue. I hate to ask, but who's in charge?
I suspect that his resignation letter, which was both clear and reasonable, should actually have said:
"Nuts to this. I'm outta here!"
Note that the list of things that the company is unable to fund didn't include what may have played a significant role in his resignation.......funding of the trustee.
08/03/2010 74 Notice of Withdrawal / Notice of Resignation of Trustee S. Gregory Hays filed by Christopher F. Graham on behalf of S. Gregory Hays. (Attachments: # 1 Exhibit A)(Graham, Christopher) (Entered: 08/03/2010)
Just for the record:
Back in January I expressed an interest in seeing an actual Wells Notice, given that the only reference to one that I had seen was in the 8-K filed by the company and it was unclear to me at the time as to whether it represented a "complete" Wells Notice as received by the company or merely a report of the receipt of a Wells Notice.
The SEC, in its recent response to Pensley's reply to their PI/Asset freeze motion, included his original Wells letter as Document 106-2.
I STILL don't know how to capture and reproduce a Pacer document, but Pacer subscribers can view it there.
The company provided a detailed listing of the alleged security laws violated in their 8-K.
Pensley's Wells letter did also.
The company's 8-K said "The recommended actions would seek, among other things, permanent injunctions and civil penalties."
Pensley's Wells notice was more specific:
"In connection with the contemplated action the staff may seek: (1) preliminary and permanent injunctions prohibiting future violations; (2) disgorgment of ill-gotten gains and prejudgment interest thereon (3) an accounting; and, (4) civil penalties pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act."
I obviously have not seen the original Wells Notices issued to SM, MM and Spongetech, so it's impossible for me to be certain that the 8-K did a soft sell on what the SEC indicated they sought therein…..you can guess that for yourself.
The company had no obligation to report the Wells Notice at all.
OT,
Can I get a mulligan on this?
Basically the DOJ has agreed with SM for a third time to "stop the clock" for a 30 day period, deferring the date by which the DOJ is required to file "an information or indictment".
The form provides 3 choices for the extension……plea bargain, trial prep or "fill-in-the-blank". Presumably the selected item is agreed upon…..both parties being required to sign the form.
Your most recent post says: "If the case is that much of a slam dunk (and it probably is), I couldn't understand why the FBI would waste their time plea bargaining with him, knowing in the end they wouldn't accept a plea bargain."
In an earlier post you said: "I was just thinking out loud as to whether it was ethically correct for the FBI to be in a plea bargain, knowing there was basically no chance they would accept it."
To say that the DOJ is wasting their time or acting ethically improperly based on a lack of intent on their part to actually come to an agreement assumes a lot. It would be a shame, and in my opinion highly unlikely, if you were right about that. If the case is a slam dunk it only increases the likelihood of a settlement and the DOJ has, or should have, an obligation to pursue the most efficient course to a just conclusion. To conclude from the "x" on the form that the DOJ is actually plea bargaining and doing so disingenuously doesn't make sense to me.
I know I'm repeating myself, but I'm convinced that if the form only had one choice, and that choice was "where's the fire, anyway?", both parties would just check the box and sign off to the same effect. So, while your if/then statement is logically sound, I don't think it comports with the facts and is probably moot anyway.
I know that you have a clear perspective on SM's activities and I'm sorry to have suggested otherwise. I was reacting to your words ("Unethical in the sense that they are giving Moskowitz the false impression") without proper regard for their context.
Sorry, OT.
I have always been uncomfortable with the idea that law enforcement can lie to someone in an interview while the reverse can have serious repercussions. But that seems to be the way it goes.
I just bristled at the idea that you stated your feeling that SM might be in the process of being taken advantage of.
But as to the specifics, the little check marks on that form are meaningless. They basically represent an agreement by the parties to waive the speedy trial rules for a month while they do other stuff. There is no real evidence of any plea negotiations and that check mark is a formality, not a commitment.
"Unethical in the sense that they are giving Moskowitz the false impression"
OT,
Allow me to humbly suggest that you read the above phrase over and over and over again until you realize that it might reflect how horrible it is to deceive someone who has relied on deception to fleece unwitting investors of millions.
Your compassion appears to know no bounds.
That may be so, but it still appears that he swapped out for collateral of roughly half the value and by no measure adequate to cover a $2,000,000 bond. It seems the process is done with a whole lot of winking and nodding, kind of like sentencing someone to jail for 90 days and letting them out in 13.
I can't get zillow to accept the address for some reason:
136-24 71st rd. Flushing, NY
Just a minor correction. Apparently the house is in his wife's name. So he substituted HIS WIFE'S house for his parents house.
Am I crazy to think that this provides him the um, opportunity, to head for parts unknown without unearthing mom and dad? He certainly wouldn't need his own house any longer.......besides, even from Google Earth altitudes it can't be worth 2 mill. I wasn't crazy when I got here, honest.
Ris, I'm a little surprised that you didn't mention that Mosko has reportedly told some people that the subsidiaries are holding $5million in cash that is immediately available.
Couldn't quite get the words out?
:o)
I'll believe it when I see it.
Finding an attorney to file it should be challenge enough all by itself.
I'm seriously undergunned to discuss this issue with a REAL lawyer, but I don't like to fish in a thunderstorm, so:
You state: "As adverse to the corporation yes, butt not adverse as to the creditors - which I believe is the appropriate test."
My initial reaction was:
I thought the law decided what the "appropriate test" should be? I mean, didn't attorney Whitley provide us with a verbatim citing from the law? And did it not indicate "nor shall the trustee have a direct or indirect connection to a party that holds a materially adverse interest to the debtor’s estate"? And wouldn't the obvious interpretation of that be that to the extent that a "connection" could be established between Hays and the SEC, the SEC has a material adverse interest to SPNG's estate in the form of their complaint and Hays fails the LAW'S test for a "disinterested person"?
After all, that's been my argument all along and who is this X person to decide what the "appropriate test" is in the face of the cited law.
Well, I learned a lesson.
I don't have any compunctions about Mr. Whitley's integrity......I've supported the uncompensated effort he's expended in his own interest and on the behalf of others. I've defended him based on those efforts against boneheads who questioned him in spite of his expression of a desire to help them. But I have not been able to confirm the wording of his citing.
Excuse me for repeating it:
"nor shall the trustee have a direct or indirect connection to a party that holds a materially adverse interest to the debtor’s estate."
HOWEVER, both of the following references use the wording that follows them:
uscode.house.gov/pdf/2006/2006usc11.pdf (does not link....use Google)
http://www.law.cornell.edu/uscode/html/uscode11/usc_sec_11_00000101----000-.html
(14) The term ‘‘disinterested person’’ means
a person that—
(A) is not a creditor, an equity security
holder, or an insider;
(B) is not and was not, within 2 years before
the date of the filing of the petition, a
director, officer, or employee of the debtor;
and
(C) does not have an interest materially
adverse to the interest of the estate or of
any class of creditors or equity security
holders, by reason of any direct or indirect
relationship to, connection with, or interest
in, the debtor, or for any other reason.
The ONLY way that Mr. Whitley's "citing" implying that Hays' connection to the SEC precludes him from being a disinterested person would be under the "for any other reason" clause, because Hays certainly "does not have an interest materially adverse to the interest of the estate or of
any class of creditors or equity security holders". He obviously has no "relationship to, connection with, or interest in" Spongetech. And the law does not deal with his disqualification due to any "connection" that he may have with any other party (eg. SEC) that does have a material adverse interest.
Thank you for putting me through this.
Lesson: Believe half of what you hear and all of what you see.
ps. I know Mr. Whitley reads this board occasionally and I would welcome a source for his citing if he notices this and is so inclined.
He reiterated the concept of value (I don't recall if he specifically restated the presence of cash) in the 6 subsidiaries in the hearing. He also stated that there are 11 trademarks (I checked, appears correct) and suggested that there are people clamoring to license them, thereby providing a ready source of funds. (I swear I think I heard him say that Vanity was one of those potential licensees!).The underlying theme being that he was feeding fund raising ideas to Hays left and right and none were being given adequate consideration. Damn that Hays, anyway.
It was the first time I ever heard him speak and I admit to being a little confused. I didn't always see a segue that connected the issues and the judge pretty much let him have at it without interruption. I suspect that it wasn't the first time that this judge was addressed by a company officer in SM's position (arrested and essentially deposed from a power position in a failing enterprise) and he probably learned a long time ago to just let 'em talk. Now I want to go back and listen again. Damn.
The Petition
Your Honor,
We the shareholders of SpongeTech Delivery Systems hereby request that you DEMAND that the financials of SpongeTech Delivery Systems and ALL of its subsidiaries be submitted to the court immediately. Mr. Moskowitz has told many shareholders that there is money being held by the other 6 subsidiaries. Why the SEC is not asking for these themselves should raise some concerns on your behalf.
Also we request that you demand a full and accurate share count of all outstanding shares. This will show Your Honor that the naked short selling we talked about DOES exist.
Having the information listed above is the ONLY way for ANYONE to know exactly where SpongeTech stands, financially speaking.
Your Honor, if you do not make these demands you are effectively signing off on the demise of SpongeTech and the loss of millions of dollars investors have made in the company. We see absolutely no reason whatsoever why this cannot be done before the trustee or the SEC can make another move to destroy the company. If you so order it.
pj,
Except it doesn't apply because the judgment, assuming there is one, wasn't a debt at the time the bankruptcy was filed.
As in this case, Worldcom filed bankruptcy after the SEC filed their complaint. Subsequently, per the link that you provided:
"That proposed settlement further provided that, as a result of the company's pending bankruptcy case, the Commission's judgment would be satisfied by WorldCom's payment, after review and approval of the terms of the settlement by the Bankruptcy Court, of $500,000,000."
"it shows the sec fines or sanctions are not exempt and are collected by the SEC from the corporation .."
What it shows is that the judgment is subject to the terms of the bankruptcy settlement.
Now, my question is, was and forever more shall be pending an intelligent response, where does the payment of that judgment fall? Ahead of, behind or as one of the previously provided classes of creditors?
Creditors Holding Secured Claims
Creditors Holding Unsecured Priority Claims
Creditors Holding Unsecured Nonpriority Claims
"I don't see where "materially adverse" is defined. "
And I don't see where that question comes from.
"A wild thought, but does "the law" *assume* the SEC is an "adversary" merely by filing suit?"
Hardly a wild thought. The filing of the suit DEFINES the SEC as an adversary.
"this goes to prove cash damages are not exempt from bankruptcy !!"
I never said that cash damages are exempt from bankruptcy. I don't even know what that means.
"I wonder if there is any precedent establishing whether a working association with the SEC/other governmental agency is acceptable/unacceptable?"
Mr. Whitley cites 4 sections of the law and around a dozen different cases in his brief to the court:
http://viewer.zoho.com/docs/gqq9e
I assume a couple of those cases are on point in terms of that issue, but I don't have a Westlaw or whatever subscription one might need to research that. If so, the judge will have to make his decision based on them. Unless of course the US Trustee's office files something citing precedents that have the opposite interpretation.
Lube up your recliner.
All good points.
1. Just as Pike was once thought to have seen things that the rest of us couldn't (Wrong!), maybe this guy is seeing things, too. But he apparently has a hands-on background that Pike didn't. The only thing that would make any sense is if he had an eye toward some kind of control. But you're right, his judgment is suspect......he really does SOUND good, though :o)
2. Makes too much sense. Leaves little room for lawyerin'.
3. I agree.....I wouldn't think it was an unusual relationship. That said, I'm not so sure that that's a good thing. What we are saying is that what we feel is an acceptable practice appears to be contrary to the letter of the law.
As cited by the pro bono attorney:
"In order to satisfy the "disinterested party" requirement to qualify as a trustee for a particular estate, the trustee must hold no interest materially adverse to the debtor, to a particular class of creditors, or equity holders, nor shall the trustee have a direct or indirect connection to a party that holds a materially adverse interest to the
debtor’s estate."
The argument that is being made is that the SEC, as plaintiff in the complaint they filed, is a party that holds a materially adverse interest to the debtor’s estate. And that Hays' history represents a "direct or indirect connection" to them. And apart from the argument that "everybody's doin' it" I don't know how to refute it.
"Plus the SPNG liabilities listed don't include the shareholder suits, SEC fines, and whatever other stuff Mosky has been sweeping under the rug and hasn't surfaced yet."
Agreed. It sure seems insurmountable to me.
And in spite of my last post regarding the relative strength of the pro bono attorney's argument regarding the "relationship" between Hays and the SEC, its kind of goofy to think that any Trustee that has any decent amount of experience wouldn't have a similar relationship.