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Still don't understand what the real issues are, do you. Humphries can say whatever he wants to about Foster and Robinson, but that won't help in the New York case any more than it did in his bankruptcy.
When Ribotsky approved of the transfer of the notes from SSEV to Walters companies, HLNT was relieved of the responsibility for those notes. You know what that means, don't you? HLNT didn't default on those notes, and if anything, Walters did. But on the notes that were fraudulently transferred from DLAD to SSEV (HLNT), since contract law applies, there was never any transfer, even despite any approval by Ribotsky of the fraud that occurred. So now guess what! HLNT didn't default on any of the notes, and now PWC must explain the logic of continuing a law suit that really has no basis, and is as bogus as the Asset Transfer Agreement. PWC will also have to explain to NIR investors why they are continuing to waste NIR investors money where HLNT will be able to obtain damages, even without the Counter Claims should HLNT lose on the appeal. PWC is not doing a very good job of justifying why NIR investors should be putting more money into NIR, or why PWC should receive any payments on its fees, since they are not performing very well as the trustee.
But, PD, we are each entitled to our own opinions as are you. Please keep up the good work, though, diverting PWC's attention from the path they should really take, just as you did with Humphries (Humphries does have recourse against you for interfering in his bankruptcy, by the way.). I and the rest of the shareholders appreciate your assistance that you are inadvertantly providing.
Good to know that PWC has been picked to win. As the same prediction was made about Humphries winning the BK Motion for a stay, my confidence in HLNT winning is now soaring.
A Poison Pill? Just who is it a poison pill for? Certainly not the shareholders. But you are of course entitled to your opinion, so maybe you can explain why this is bad for shareholders?
There is also such a thing as selective attention. Where was Foster's and Robinson's knowledge of the fraud that Humphries committed with Walters and Ribotsky. In the same bk filings to which a reference is made, along with the law suits against Humphries by Foster and Robinson, there a reference to the additional fraud committed on Robinson and Foster where Humphries failed to mention anything about the NIR debts. And certainly there was no mention of the Truk Fund or Whalehaven in any of those filings. The implication that knowledge of one issue means that they equal knowledge of all issues is incorrect.
Okay, as to the "bank statement" that shows $200,000 worth of payments to an Arkansas bank account. That one piece of documentation does not explain or confirm that there was any wrongdoing on the part of either Foster or Robinson, and all there is at the moment is speculation as to the signicance of that document and those transfers. Equally, there have been allegations made, but unproven, as to the nature of Foster's bankruptcy, and the lawsuits filed against Humphries. The only proof offered for those allegations is inuendo, which doesn't prove anything.
As for Espinoza, I am just as happy that he wasted his time on circumstantial information about a topic that was relevantly unimportant to Humphries request for a stay. Espinoza should have been focusing on the issues of "bad faith" filings to see if there was even a remote chance of making them look as though they were filed in good faith. Good job on Espinoza's part.
There is only one reasonable explanation. The shares are being held in the belief that if the price falls, they can acquire more shares at a much cheaper price, and they would do this because they truly believe that the company will ultimately take off and run to a much higher PPS.
Certain things seem to be confused or forgotton. Mel and Charlie agreed to a deal to sell HHHI and HOSS to SSEV, only to find out that Humphries had been conducting illegal acts. After that discovery, Humphries was booted. As a part of the infamous "release of liability agreement", Humphries was to provide information and records to the remaining members of the company. Then Chad was brought on and in the process, the new management began finding out about all the other illegal acts that had been committed not only by Humphries, but by Walters as well, along with the assistance from Ribotsky. Those are even the breaches that Judge Kornreich found evident enough for HLNT to continue to pursue in the New York case. If investors don't apply the correct perspective, they are going to be confused and will invariable mislead other investors who rely upon their postings.
Now as to why anyone would take this job, in Chad's case, he was asked to, he owned shares and thought it a good way to protect his investment, and he felt that SSEV held promise with the technologies and products it had to offer. And he did not have the full picture of all the damage that had already been done by Humphries, nor did he have any idea of the efforts it would take to be able to perform the job. But take the job he did, and he has taken appropriate steps to move the company forward, despite the baggage that he took on.
Glad to find out that investors knew all about the pending litigation when Chad took over, and about Truk and Whalehaven. Yet none of those knowledgeable people warned Chad with the specifics so he didn't have to find out by experience? And considering Chad was a shareholder before he even got involved with running the company, I am absolutely certain that he would have been able to make better decisions with all of that information. It is far to easy to criticize when one is using 20/20 hindsight looking backwards, but it is a lot more helpful when working in "real time" to have all this so called wealth of information at ones fingertips.
Rainmaker, you've asked a very good question. Unfortunately, it is very complicated.
Quite simply, the "Lack of Transparency" (L-O-T) is rarely an issue when the PPS is rising. All anyone has to do is go back and look at the posting on this board and they can see that anytime the PPS is rising, the critics go quiet, and most posters are discussing how high the PPS is going to go, yet there is no discussion of the L-O-T. But when the PPS is going down, or going sideways as it has for the last few months, the critics return and many shareholders become disgruntled and the discussion of the L-O-T becomes a major theme again. Worse yet, when the financials come out, and look so unappealing as has the year end for 2011, and fears of another pipe, and a potential of another increase in the A/S, concerns about the L-O-T loom even larger.
You have asked me my opinion about the lack of transparency. The nature of the question itself has to be addressed first, because, whether or not it is intended, the "lack" implies something is being done wrong. It is an interesting distinction that when the PPS is rising, that "Lack" is not perceived as being wrong. This perceived lack of transparency doesn't guarantee that the company is doing something wrong, but because of the lack of information to show otherwise, a conclusion is often jumped too. Add to that the posts of critics who, having no proof of such wrong doing, try to foster that fear by utilizing that lack of information to portray something sinister is going on, and causing more stockholders to become concerned and worried.
The company has two good reasons to restrict the flow of information, the first being of course the law suits, and the second possibly being the "partnership" that has been mentioned in the February news letter. As the partnership does not appear to by fully cemented yet, the release of information prematurely could jeopardize that work being done to secure any partnership or agreement of cooperation. While I don't know all there is not know about what is going on inside of the company, my visit last September (and meeting the management and several of the employees) has led me to believe that the lack of information has not been because of some sinister plot to defraud the stockholders. Because of my visit, I am very certain that any other stockholders who wished to personally visit the company would also take from that visit that the company is honestly working towards the combined benefit of the company and its shareholders. And if shareholders can't travel to visit the company, if they can trust others to make that visit and believe what is reported back to them, then they certainly won't have to rely on my word alone.
So in answer to your question, this "lack of transparency" is not an issue, but that is just my opinion. Stockholders and potential investors should conduct their own due diligence, including visiting the company if need be, and make their own investment decisions.
The Judge, in document #154 on the SCROLL system, gave the following timeframes:
1. Humphries and Walters, and their companies, had 20 days to make any motions, indicate who if any depositions that they wanted to make, and to request any discovery.
2. All depositions of 3rd Party Defendants (Humphries, Walters, and their companies) are to be completed by May 11th. Any requests for additional discovery based upon those depositions must be made within 10 days of such deposition against which such documents are being requested.
That should answer your time frame question. Most of the Documents that have been requested and received don't make it to the SCROLL system, and would only appear during the trial, unless they are used in the filing of a motion, or as a rebuttal against a motion.
Walters cannot hide behind his gated community, and has already notified the New York Court who can be contacted on his behalf with regards to any documents to be served. Walters will oomply with the discovery, although begrudgingly, as he cannot afford to have HLNT file against him for contempt of court.
In June, Ribotsky gave a preview of his (and NIR's) defensive strategy when HLNT first filed to have the severance of the cases removed. Ribotsky basically stated that he accuses Walters and Humphries of committing all the illegal activities. Walters, on the other hand, showed that he intended to use a strategy of putting all the blame on Humphries. Readers can view this in the Document #54, Walters initial response to the HLNT Counter Complaint, and Document #57 includes NIR's attempts to pass the blame.
One thing is for certain, Humphries is the low man in the blame game, and there is no doubt from Walters or NIR's filings that they intend to make Humphries the scape goat for everything. With Humphries failure to proactively comply with the Judge's orders, he has placed himself in an extremely bad situation, one in which Walters, and Ribotsky, can play pin the tail on the Humphries. And it would be in their best interests to do so.
The opinions expressed herein are my own, and each investor should conduct his or her own due diligence and make any investment decisions accordingly.
This part is interesting, "I think any speculation that is put forth should be clarified by the poster as a mere OPINION not LAW".
I frequently post that I am stating opinions, and even suggest that anyone, who reads what I post, should conduct their own due diligence. I generally provide links to that information, or where it can be located, so that they can do that. It would be good if all posters, critics as well, did that.
It was my opinion that Humphries attempt to get a stay would fail. As it turns out, I was correct. Others had a counter opinion, and were wrong.
It has been said that the lack of Humphries stay doesn't have anything to do with the New York case. That is evidently wrong, because with Humphries first bankruptcy filing, the Judge in the New York case severed and stayed the Counter Claims and 3rd Party Action brought by HLNT. In Oct/Nov, the judge determined that the stay was no longer an issue and allowed the rejoining of the CC&3PA to the NIR funds original case. This is all in the documents on the New York SCROLL system, case #600893-2010.
Now there is a discussion that Humphries testimony is going to be damaging to HLNT. There has been reference to a Bank Statement that supposedly has incriminating evidence. This very evidence that Humphries stated that the SEC had and for which he had no access to. Never mind the fact that the Bank Statement has nothing to do with the fraud that was committed. The fraud preceded any involvement of Foster and Robinson in the company, although some critics seem to be confused with the dates in which the events occurred. Now that there is no stay in effect, Humphries cannot hide behind his bankruptcy to avoid having to provide the documents requested in discovery. Nor can he avoid having to give a deposition. And this is all related to the New York case.
PD is partially right, when he says that the Funds have foreclosed on HLNT. That is why they sued in court, to enforce that foreclosure with Judicial Intervention. If a person takes a very, very narrow viewpoint, that only considers the initial filing by the Funds, then PD is correct, it is about contract law and the enforceability of the notes. However, PD has omitted the existence of the Counter Claims and 3rd Party Action (CC&3PA), brought by HLNT, which as PaulQ1 has pointed out, is also about contract law and how fraud superceeds contract law, so PaulQ1 is correct. Josie also has a point, in his post, which is #54785, where he states: "that the only person that can clear this whole thing up is the judge". The judge is doing her part by insisting the law be followed and that Humphries and Walters submit to Depositions and provide the documents that have been requested in discovery. She has also made decisions and issued orders that effectively serve to move the case along. However, both parties have requested a jury trial, and it will be the jury, if the case gets that far, that will ultimately clear this case up.
PD also omitted various other facts, for example, in the Amended Complaint, filed by the Funds, the original complaint was corrected to include DLAD in references to all of the transferred notes, which was NIR's way of trying to cover all the bases, just in case the Notes (transferred from DLAD) were not the responsibility of HLNT. This is in document #7 of the New York case on the SCROLL system. Within that same document, "Wherefore, plaintiffs pray that judgement be entered against SEVI: A. Awarding plaintiffs all sums due under either the Notes or the SEVI Notes, ....", NIR (via the Funds) is trying to cover all the bases by implying that either the Transferred notes are valid, but just in case they are not, then the Original notes (the 2.5 million at the time of transfer with Walters) should be valid.
Now this is all so very interesting, because some would have us believe that only contract lawyers could tell us how this case should go. The interesting issue is that both NIR's and HLNT's lawyers are exactly that, contract lawyers, and they have exactly the opposite points of view, or more so, they are arguing the opposite sides for their clients. What we do know is that HLNT's attorneys believe in HLNT's case so strongly that they have allowed HLNT to carry a large balance for the fees that HLNT's attorney's have charged. This in itself makes a huge statement about the case.
I am curious as to why there is such an objection to the information and opinions that I posted here as I am pretty sure that I am entitled to my opinion, just as others here are. And this is real puzzling, while investors should conduct their own due dilidgence and make their own decisions as is appropriate, where is there any rule that readers do not have freedom to chose who to believe or not believe and therefore, to act on those beliefs?
Ribotsky, very possible, Humphries, not a chance.
Yes. It would be a good idea if he did, too.
Your second question first, yes, Humphries has to undergo a deposition, provide documents requested in discovery, and testify at the trial.
Now your first question. Here is a link to information on what "contempt of court" really is in todays world. It is worth reading before continuing here:
http://en.wikipedia.org/wiki/Contempt_of_court
Humphries is already committed to being in contempt of court. He was to provide the documents requested in discovery by or around the 20th of March, and most likely never met the time requirement as set by the Judge. There is more to be said about this, but it is not appropriate at this time.
Humphries has stated to the court, twice now, that the records have been given to the SEC. This needs to be looked at more closely. First, in Humphries criminal and civil trials, based upon the FBI sting, there shouldn't have been any need for discovery that related to SSEV. If there had been discovery, it would have been related to Humphries and his company Earthworks Entertainment, which was named in both the criminal and civil cases.
Let's suppose though that Humphries did send documents to the SEC as he has said. The most important thing is that if the SEC is conducting an investigation, they are not going to comment on it. None the less, the SEC will have a record of the documents received as they will be responsible for maintaining what is called the "Chain of Custody". See the following link for more information on this:
http://en.wikipedia.org/wiki/Chain_of_custody
The documents that Humphries allegedly sent the SEC are in the protective custody of the SEC, then, along with a listing of every document received, and information as to when it was received. It is not the responsibility of the Court or HLNT to get that evidence, it is the responsibility of Humphries, if he did not keep copies, to arrange with the SEC to reacquire those documents in order to fulfill the discovery requests by HLNT. Now he has stated that he has performed due diligence in order to meet the requests for discovery. He is going to have to prove to the court that he did indeed make the efforts, and to what extent. However, at most, that could have given Humphries an excuse for a delay in providing the documents. Looking at that more closely, Humphries has been without a stay since September 2nd, 2011. His ignorance of or misinterpretation of the law is not an excuse. The judge will view Humphries as having had ample time to have made the necessary arrangements to have reacquired the documents, even with potential difficulties, to have met the most recent order to provide them to HLNT.
It will be up to HLNT to file for a "contempt of Court" charge against Humphries. They will of course ask for sanctions to be applied to him. An interesting issue. The case is in New York, but Humphries resides in Texas. HLNT can still have any contempt of court in New York brought to bear against Humphries in Texas though the Texas courts. He can't hide.
One last note of irony. In his Motion for a stay and his reply to HLNT's Objection to that stay in the state of Texas, Humphries lawyer was able to provide some documentation along with the arguments. It appears that not all of the documents were given to the SEC afterall.
HLNT/NIR/Ribotsky/Humphries/Walters/PWC lawsuits update 03/28/2012:
Entered this evening on the PACER system, Case #12-40634, Document #29, Bankruptcy Court, Eastern District of Texas:
"ORDER DENYING DEBTOR’S MOTION TO IMPOSE STAY
Came on to be considered Debtor Steven Eugene Humphries’ Motion to Impose Stay1 (the “Motion”). From the pleadings filed herein, evidence presented, argument of counsel, and other things before the Court, the Court finds that Debtor has failed to prove by clear and convincing evidence that this case was filed in good faith according to 11 U.S.C. § 362 (c)(4)(D) and that the Motion should be in all things DENIED.
IT IS, THEREFORE, ORDERED that Debtor Steven Eugene Humphries’ Motion to Impose Stay is hereby DENIED.
IT IS FURTHER ORDERED and confirmed that the automatic stay is not in effect, nor is it applicable to this case."
Bluhorshu, PaulQ1 gave you most of the answer in his post (#54637).
Here is the scenario. As a liquidator, you take over a company that has been poorly managed and you are stuck with the job of collecting on notes that have become toxic. An additional problem that you face is that lots of investors have been following the company and are well aware of its history, and many investors have been discussing your chances of being able to do anything with this failed company. In assessing your options and developing a strategy on how to deal with this, you decide to take certain steps that will make it look like the investors who have discussed your options are wrong.
In the case of the Appeal by PWC, like PaulQ1 said, it doesn't cost that much to file the appeal, and it can always be withdrawn at a later date. But it gives the appearance that they are willing to bear additional court costs to win the case with HLNT.
By the way, PWC made a bad strategic error in this appeal, which is going to become evident over time.
Rdsd posted about a company called EP Global Communications, which although it was off topic, can be used to explain the next step in PWC's strategy. Investors have discussed that PWC is a liquidator, not a Ribotsky who converts notes into deeply discounted shares. So to silence such critics, PWC decides to take a company (like EPGL) and get the company to make an announcement that it will honor the full conversion of all the debt to shares of stock. So suddenly, here is NIR, managed by PWC, willing to continue to convert debt into shares, thereby proving all the critics wrong.
But lets take a closer look at this strategy. Here is EPGL, with a 5 Billion A/S, and approximately a 4.8 Billion O/S. We are not told what the total debt to be converted is, or what the conversion price or rate is, but the stock is currently not trading at $.0001. Either there is going to be a large increase in the A/S, or there is going to be a Reverse Split, which is more likely the case. But to get the stock to sell, even after the R/S, the company is going to have to do a P/R. They did in the same P/R about the debt resolution. The current management agreed to leave amicably, meaning that they wanted out and didn't want anything to do with NIR's (PWC's) plan to pump and dump. The reason PWC chose this stock, it has been in the dark for some time, and no one really knows about the financial condition of the company. After all, they could have chosen another likely candidate, ECMH (PD's stock of special interest). Most likely, this stock is going to go Caveat Emptor, and after the R/S, it will nosedive right back down to .0001, just like ECMH did after its Reverse Split. And to add icing to the cake, PWC (NIR) will put in its own management team to make sure this happens, just like HLNT mentioned in its law suit.
So what is PWC's strategy? To try and convince everyone that they are willing to go the legal route (and we'll see just how far they are willing to take it), and to prove to everyone that they are willing to perform the NIR convert, pump, and dump system just to prove everyone wrong.
I feel sorry for any one currently invested in EPGL, and for anyone who stands to be sucked into that fiasco. Just so that PWC can try to show everyone what they are willing to do.
The opinions expressed herein are my own and investors should perform their own due diligence and make their investment decisions accordingly.
"On the other hand they can be baited with stuff that could work better for Highline and Chad."
You mean, for example, discussing a return date of March 27th for the discovery when the actual date was around the 20th? The 20 day time frame is actually based upon consecutive calender days, although I did mention that if the judge included weekends, it could put it as late as the 27th. Oops. Do you think that Humphries lawyer, Espinoza, would have filed for an expidited hearing for the 20th if I hadn't talked about the 27th? Nah, couldn't be. That is why Humphries should have hired himself a lawyer in the New York case, pretty sure that Walters lawyer didn't confuse the dates. What can I say, I'm not a lawyer, and my opinion is not good for legal advice for reliance by Humphries, Walters or Ribotsky. Speaking of which, allegations of fraud in a civil case can also have legal implications of fraud in a criminal case. Humphries should know this, as he had to go through both a civil fraud case parallel with his criminal fraud case in Florida. Wonder if Ribotsky is already preparing his criminal defense? How about Walters?
More on Humphries:
The civil case filed by the SEC against Humprhies is Case #10-cv-23606, and can be located on PACER in the District Court, Southern District of Florida. And just on the 29th of February, the SEC obtained a civil penalty judgement for disgorgement against Humphries of $14,973.06, including interest ("representing the amount of disgorgement of ill-gotten gains" against Humphries and his company Earthworks). See Document #43. Funny how Humphries didn't include that in his bankruptcy filing. Must be one of those innocent mistakes he is so prone to.
But what is more interesting is the criminal case against Humphries. This was case #10-cr-60259, also in the District Court of the Southern District of Florida. From Document #1, we have the following Charges:
CONSPIRACY TO COMMIT SECURITIES FRAUD (18 U.S.C. SEC 371)
"8. From in or around June 2009 through in and around August 2009, in Broward County, in the Southern District of Florida, and elsewhere, the defendants, STEVEN HUMPHRIES and JOHN BUCKEYE EPSTEIN, did willfully, that is, with the intent to further the object of the conspiracy, and knowingly combine, conspire, confederate and agree with each other and others, known and unknown to the United States Attorney, to commit certain offenses against the United States, that is, to knowingly, willfully, and unlawfully, by the use of means and instrumentalities of interstate commerce, the mails, and the facilities of national securities exchanges, directly and indirectly, use and employ manipulative and deceptive devices and contrivances in connection with the purchase and sale of securities, and: (a) employ a device, scheme and artifice to defraud; (b) make untrue statements of material facts and omit to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (c) engage in acts, practices and courses of business which would and did operate as a fraud and deceit upon any person, in connection with the purchase and sale of securities, that is, common stock issued by Earthworks Entertainment, Inc. and the Fight Zone, Inc.; in violation of Title 15, United States Code, Sections 78j(b) and &*ff(a), and Title 17, Code of Federal Regulations, Section 204.10b-5."
Very wordy, but these are the interesting points:
1. Humphries pled guilty to these charges.
2. These acts of fraud occurred in June to August of 2009.
3. Neither Mel Robinson nor Charles Foster were included in these charges.
If you change the name of the companies to Systems Evolution and you throw in NIR, Dealers Exchange, Monarch Bay, and STI, and you add Ribotsky and Walters and throw out Epstein, this sounds what HLNT has specified in its Counter Claims and 3rd Party Action. How very interestingly parallel.
Imagine, Ribotsky claimed that he quit funding SSEV (Humphries at the time) in the months preceeding the FBI sting. But several other interesting points come to mind:
4. Robinson and Foster caught Humphries in acts of fraud, and he was forced out of SSEV.
5. Neither Robinson nor Foster were aware of the FBI sting that had already been conducted when they forced Humphries out.
6. Could it be believed that Humphries would only conduct fraud in one case (company) and not in others? Certainly not.
7. Humphries financial difficulties began before the Asset Agreement ever took place, and was the motivating issue for his part in the fraud.
Ribotsky had essentially already cut Humphries off from the money well and had told Humphries to figure out a way to pay back the notes.
There are these things that need to be considered. Walters had no reason to agree to any Asset Purchase Agreement unless there was something in it for him. Humphries could not have done this on his own, Walters had to go along with the game. But neither gentlemen would or could have done it with out Ribotsky's, and subsequently, NIR's, blessing and approval, and therefore knowledge. By 2009, Ribotsky was already in trouble himself as NIR had already stopped honoring requests from NIR investors for the withdrawal of their investments. Ribotsky and Humphries were motivated by their financial situations (Ribostky for NIR and Humphries for himself personally and for his companies). Walters was just greedy and went along with the game, which is why he felt it necessary to concoct the elaborate release from liability.
More dominoes are going to be falling soon and more dots are going to be connected.
The opinions expressed herein are my own and all investors should conduct their own due diligence and make their investment decisions accordingly.
Didn't you tell us that if Espinoza does his job right that Humphries had something like a 75% chance of winning? As much as you know and are able to ferret out, just thought you might have already found out and could tell us. Bad news or not.
HLNT/NIR/Ribotsky/Humphries/Walters/PWC lawsuits update 3/27/2012:
On the 22nd, Humphries attorney filed a request for an expidited hearing for the Motion for the Continuation of a stay (Document #16 on the PACER system). Seems that Humphries house is to be auctioned off on the 3rd of April, and he felt it was necessary to get the case tried sooner. The request was granted and the hearing was moved up to today, 9:30 am, CST (Document #16). It is remarkably coincidental that the supposed deadline for Humphries to submit the documents requested in discovery in the New York case is also today.
In addition, as was expected, HLNT filed an Objection to the Motion (Document #17), stating that the Motion should be denied as there is no stay in effect that should be continued. They have also asked the Judge to issue a declaratory order to state for the record that there is no stay in effect. HLNT has also filed for an alternative action, having HLNT declared exempt from any stay as Humphries is involved, in a case in New York, in which he has been alleged to have committed fraud.
It is evident that someone from Humphries camp reads this board, as he has retracted his statement in the New York court about the Stay being in effect, and also on the 22nd, his attorney filed a corrected Motion referencing the correct code sections (Document #18). Espinoza corrects his deficient original filing, and is attempting to portray Humprhies as a good faith filer, who has just made a few mistakes in his past bankruptcy filings. It is going to be interesting to see if the judge falls for that line.
Now comes an unexpected twist, an attorney for the SEC has applied for a Pro Hac Vice to represent the United States in this bankrutpcy. It appears that Humphies neglected to mention that he has a judgement against him in the state of Florida from a civil case that paralleled his criminal case that got him convicted.
A lot of twists and turns here in just the last few days. As soon as I can get the courts order, I will post it here, although that could take a few days.
PD, you have been championing Humphries and his lawyer, Espinoza. Do you know what the result is yet?
The opinions expressed here in are my own, and all investors should conduct their own due diligence and invest accordingly.
HLNT/NIR/Ribotsy/Humphries/Walters/PWC lawsuits update 03/26/2012:
Both sides have now filed appeals, NIR (under the management of PWC) for the issue of Ribotsky's aiding and abetting of Walters and Humphries, and HLNT, for each of the issues the Judge denied in their Counter Claims and 3rd Party Action filing.
First, a TimeFrame:
Both Parties had 30 days in which to file an appeal over the Judge's Order, based upon the Notice of Entry filed by NIR's lawyers. The timeclock started from the moment the first Appeal was filed, so all dates now revolve around that filing. The following link give the calender of events and when they must occur for the Appellant Division, First Department:
http://www.courts.state.ny.us/courts/ad1/2012%20Calendar.pdf
As it can be seen, the oral arguments for both appeals will not be heard until sometime in September. In the meantime, both parties have 20 days to file their briefs, 15 days to respond to the other's briefs, and then 10 more days to reply to any response. All filings should be completed by the first week in May.
Second, Appellant Court Rules:
The rules of the Appellate Division, First Departement can be found at this link:
http://www.courts.state.ny.us/courts/ad1/Practice&Procedures/rules.shtml#600.17
It is a lot of reading, so the most important rules at the moment are 600.10, 600.11, and 600.17 as they are the most applicable for the immediate future for these appeals. While both the two parties, NIR and HLNT, have filed appeals, NIR, by virtue of having filed first, has become the Appellant, and HLNT has become the Cross Appellant. Under the rules, both parties will be required to file their briefs, responses and replies in a cooperative manner.
The following links contain the New York Law of Civil Practice with regards to the Appeals Process and the Appellate Division:
http://codes.lp.findlaw.com/nycode/CVP/55
http://codes.lp.findlaw.com/nycode/CVP/57
The first reference is to appeals in general, the second is to spedific issues within the Appellate Division.
Third, NIR's (PWC's) Appeal:
Ribotsky followed a strategy that virtually guaranteed him a victory in court if the Notes he created were ever challenged. This strategy involved the setting up of Notes under various Funds that were seperate from NIR, although managed by NIR. By doing this, the Funds could sue for failure to honor the notes and the requests for conversions. At the same time, any wrong doing on the part of Ribotsky or NIR could be shielded from the Funds, making it next to impossible for any victim of NIR wrongdoing to win, as the Funds were free of "unclean hands". This also allowed Ribotsky to play as dirty as he pleased.
In the case of HLNT, the method in which the debt was transferred was different than what Ribotsky had done in the past. Some of the Notes in question were for loans received by Dealers Advance, a company run by Humphries, and Dealers Advance (DLAD) spent that money however Humphries pleased. But Humphries never developed DLAD as more than a small time company and as a result, it could not handle the conversions necessary to satisfy NIR's notes. To do this, Humphries, Ribotsky and Walters all consipired together to create a transfer of the debts to SSEV(HLNT's predecessor) so that Humphries could pay back NIR. It is because of this involvement of Ribotsky that PWC is concerned. In a jury trial, a jury could potentially find that the Funds, as innocent participants, are not so innocent, and therefore, HLNT could be found not responsible for the transferred notes. PWC wishes to reargue the case for the "In Pari Dilecto", stating that because Walters and Humphries were involved, HLNT must be responsible.
Although I will not discuss the ins and outs of PWC's argument at this time, the argument itself is an invalid one, simply because of the events that took place, and after NIR files its briefs, I can provide more information as to why they will lose. It is almost certain that NIR (PWC) will lose at this appeal level. Should they lose, it can be considered that they would appeal to the final level, the Court of Appeals for the state of New York.
It will be interesting to see what PWC uses for its support of its appeal when NIR submits its briefs.
Fourth, HLNT's appeal:
The judge stated that HLNT didn't plead, with enough specifics, the case for the fraud for Ribotsky, Walters, Humphries and their associated Businesses. While HLNT could probably have been able to do this had discovery been completed, and not delayed by Walters and Humphries, the true issue here is that the Judge erred severely in the interpretation of the intent of the law with regards to the pleadings, and therefore, in the application of that law in her decision.
While I will not present the basis for HLNT's appeal at this time, the probability of HLNT succeeding in the appeal is very high. Equally, it will be interesting to see the briefs presented by HLNT, and as well, each sides responses and replies to those appeals.
Remember, HLNT's position in the CC&3PA is to get damages, and by the reinstating of the denied portion of the Counter Claims, this will become possible for HLNT during trial.
Fifth, other issues:
While the appeals are going on, the existing cases are supposedly progressing towards trial. The next interesting event will be concerning Humphries. If he has not already provided the documents requested in discovery, then they are due by tomorrow, even under the most lenient of views on the deadline the judge gave. Don't expect Humphries to comply, as he will fight pass the point of good judgement, unless he reverses himself and gets smart. After tomorrow, I will present some more information on Humphries, and also why his excuses for not providing the documents requested in discovery will get him into more trouble.
Lastly, regarding Humphries Bankruptcy and his motion to have a Stay put in place. That hearing is coming up on Monday. The judge shouldn't have any problem making her decision on the day of the oral arguments. If Humphries should win, we should find out within 24 hours from Humphries himself. Should he lose,
we will have to wait until the Judge's order is posted to the PACER System.
The information provided here and above is a courtesy for those who wish to learn more about the court cases and the appeals. The opinions provided herein are my own and all investors should conduct their own due diligence and make their own investment decisions accordingly.
Yes, 007. We will be hearing the truth very soon and it isn't going to be what you want it to be, HLNT will not be going to .0001, and HLNT will be surprising a lot of critics. See ya on the other side!
For those who are interested, here is some background information on the appeals courts and the appeals process.
First, there are two levels of appeals courts in the State of New York, the first level being the New York Supreme Court Appellate Division, and the second being the Court of Appeals of the State of New York (the final authority on New York State level court cases). The following link gives you the background on the Appellate Division, from Wikipedia.
http://en.wikipedia.org/wiki/New_York_Supreme_Court,_Appellate_Division
Both appeals, PWC's via the NIR Funds, and HLNT's, will go to the Appellate Division, First Department since it is the Court of Juridiction that covers the court in which the original suits have been filed. This is also a very important understanding because while New York State has various rules governed by law, beyond that initial set, each Department has its own additional rules to be followed.
In addition to the court of Jurisdiction, there is an appeals process governed by New York Law. The appeals process is described briefly in the following article:
http://www.newyorkappellatelawyer.com/about-appellate-law/
This is not a recommendation of the Law Office that wrote the article, but the artical itself is written in easy to understands language.
This information will be useful in further discussions about the two appeals that have been filed.
Yomoney, I can truthfully say, for the record, that I have never been paid any money, or otherwise, by HLNT, for any of the work that i have done for myself and others on this board, or for any advice that I have given HLNT that they have used.
I've already given my opinion and an answer to your question. You are assuming that the issue of ownership has not been resolved. Any resolution to that issue will be addressed by HLNT, as it should be, at a time that they feel is appropriate.
But to make use of this post. Humphries files a declaration stating that a stay was in place, but later retracted that statement. The guy can't keep from hurting himself. With his declaration, he committed perjury. But when it comes to not complying with the judge's order to produce documents in discovery, at least he could have the Judge's benefit of a doubt that his reliance on a non-existant stay was because he was representing himself and that he just didn't know any better. Now, as he clearly understands that there is no stay in effect, he no longer has a any excuse for failing to comply with the judge's order. The guy lost in a no win situation.
Irrelevant!
PWC/NIR could give a rat's posterior about any issues of who has what ownership in HLNT. They want to collect on all the outstanding notes. By the way, did you note that when NIR filed the amended Complaint, they named DLAD also?
Humphries could give a rat's behind about who has control of HLNT. He is fighting to keep from having to testify in the bogus transfer agreement, especially as there are implications of criminal wrong doing.
Walters could give a rat's whatever about who makes the decisions at HLNT. He is also fighting to avoid having to testify in the bogus transfer agreement, because he is also concerned about implications of criminal wrong doing.
You can lump Ribotsky in with Humphries and Walters.
The two big issues of importance are the NIR suit, and HLNT's ultimate performance and success. Those are relevant. And if HLNT does performn and succeed, then the NIR suit becomes moot in any case.
As to your reliance on "television", that is your choice. But what it comes down to is your making an assumption that the ownership issues have not been resolved and you are relying on information from a past insider. The truth is you really don't know what is going on and for all we know, that issue has been resolved and will be reported at the appropriate time.
But that issue has no bearing on Humphries Bankruptcy, or the NIR case with regards to the fraud that was committed.
HLNT/NIR/Humphries/Walters/PWC lawsuits update 03/22/2012:
Shrewdop, it was filed today, but didn't appear on the SCROLL system until this evening. Just a couple of quick comments this evening and I will post more on it over the weekend.
1. Either side has the right to appeal any part of the Judge's decision.
2. PWC, as the trustee, has made the decision to file the appeal.
3. The appeal concerns the Counter Claims #6, the aiding and abetting of the breach of fiduciary responsibility of Walters and Humphries by Ribotsky.
4. The appeal centers around the Judge's denial of the 'in pari dilecto' defense (IPDD for short).
Item 1 is a given. Item 2, however deserves some immdiate discussion. PWC, has been informed that there is a weakness in the NIR case should this counterclaim be allowed to stand. As Ribotsky was an agent of NIR, ergo the Funds, then PWC is aware that this could have an undesireable influence when it comes to trial, if it should. While winning this appeal could have a benefit to Ribotsky, ie eliminating any reference to his wrongdoing so to speak, PWC is not concerned about him, they are concerned about being able to collect on the notes, so they hope to remove this negative potential from the court case.
Item's 2 through 4 will be discussed more in detail later.
Other Notes:
1. This was just the preliminary notice of the appeal, the lawyers for NIR still need to put forth their argument(s) as to why they claim the Judged erred in her decision, but they have started the clock on the set of events that must occur in the appeal, up to and including the decision of the appeals court.
2. This is also the first level of appeal, as there is the Court of Appeals itself, and who knows, with a bad decision, PWC may be willing to go that far. Still not a problem for HLNT.
Good try. But the fraud that Humphries, Walters and Ribotsky committed (as an agent of NIR and all of those funds) preceeds any acquistions of HHHI and HOSS, however completed or incomplete, so your question is totally irrelevant.
Au Contrair, Mr. PD. I read your whole posts, but only comment on what is relevant. You have your opinion, we all do, but readers here need to know what is truly important and why.
Humphries will testify, he won't have any choice, although you can bet that he will pleading for his rights against self incrimination, a lot.
So you only give Humphries a 70% chance, cause you haven't really looked at the BK that deeply? Yeah, right. Espinoza filing under the wrong Code Section, and your thinking he's gonna win. Humphries having to retract his declaration that a stay was in place, the same non-existent stay that Espinoza is asking for a continuance on? Yeah right! You sure are trying to seperate yourself from your ealier belief that Espinoza is going to kick the backsides of HLNT. Humphries filing one day after the time limit on the Credit Counseling was an oversight? An innocent mistake? The law doesn't care, PD. The judge will have to rule against Humphries. You seem to keep missing the part of the Code Section 326c4d, where it states "but mere inadvertence or negligence shall not be substantial excuse unless the dismissal was caused by the negligence of the debtor’s attorney". His lack of income in the Chapter 11 case was at the very least 'mere inadvertance' if not pure negligence coupled with perjury. And in his last case filed in October? "I just miscalculated by one day" is an admission to the very heart of negligence and certainly mere inadvertance. Since Humphries can't blame his actions on an attorney (he filed on his own), then the judge will have no choice but to look at the Motion and deny it. I see a 99.9999 % certainty that Humphries will get no stay. Regardless, on the day of the hearing, there will be more information presented to the judge that affects Humphries Motion to invoke a stay. Espinoza isn't going to be able to defend Humphries at all. "If he is good, it should be a cake walk...". Yeah, right again, PD!
Why do you think the Judge in the New York case was very specific about the time frame of 20 days in which Humphries was to provide the documents requested in discovery? She knew the bankruptcy law with respect to the stay. Even allowing for weekends, that puts the deadline at the 27th of March, and the hearing on the stay that Humphries will lose anyway, isn't until the 3rd of April. If nothing else, Humphries seems to be ignoring the reality that he is simply burying himself.
And this is the biggest laugher of them all, "The PWC lawyers are gonna eat whoever shows up alive." PWC has no standing in this case, they use the NIR lawyers, as long as the NIR lawyers get paid. If the NIR lawyers withdraw, then they can use thier own to represent NIR. But it will be at their expense (PWC's) unless PWC can milk NIR for more attorneys fees.
"Like I've told you from day one, everything Robinson?HLNT related is a con. I have injected myself inta that DD." Yes, youv'e just injected yourself into that one big time. Can't wait to hear from you on your next post.
PD, in the past, you have told us, and I paraphase this, that Humphries is going to sink HLNT in the NIR case with his testimony. Repeatedly you have told us this, last year, about 3 months ago, a couple of weeks ago, just a few days ago.
From your post # 54242, you state: "I also suggest you look deeper into section 362, the automatic stay and interested parties. It seems your reading and then reportin your wish list instaed of facts." Yet today, you state: "As for Humphries, here's what I think about his stay. Almost nothin. It means virtually nothin ta me." Do we begin to detect a subtle shift in your belief in Humphries? You went on to say today the following: "He also says he expects it to be back in place upon confirmation on Ap 3. If his attorney Espinoza does his job it will be in place." It appears you have a lot of faith in Espinoza, since you are already qualifying his performance with an "If" statement. And yes, we will see what happens on April 3rd, won't we!
By the way, did you know that there has not been a stay in effect since September 2nd, 2011? Seriously! Humphries 2nd BK filing on the 2nd of August invoked CS 362c3a, allowing for a 30 day stay. It expired 30 days later because there was never any motion to continue it in that case. Walters attorney knows that, ask him why he had to withdraw his motion that the severance of the Counter Claims and 3rd Party Action from NIR's original case remain in effect. And just in the last two days, Humphries himself had to retract his "declaration" that a stay existed. It certainly seems to me that the stay, or lack of it, affect the New York Case. Yep, Yep, Yep!
So tell me, PD. Do you seriously think that Humphries Motion to institute a stay will pass? Seriously? Oh, yeah, I forgot. You qualified it today with your "If" statement, trying to cover the possible denial of the stay by saying that Espinoza just didn't do his job. After all, that is what Humphries said about his lawyer in the August 2nd, 2011 BK filing.
I once suggested to you that you create a time line of events so that sense could be made out of what happened in all of this case. I made up one, although I haven't updated it in the last 10 months or so, but you didn't like it, anyway. You came up with your own abbreviated time line, which was wrong. Not my problem.
Your belief in that HLNT is going to have a problem is moot, in respect to the charges that have already been approved by the Judge. HLNT's defense against the notes transfers, on the other hand, is going to depend on the discovery to fill in the blanks that HLNT had in its pleading about the fraud. Humphries is still trying to play the dodge the discovery and deposition game, and come April 3rd, he's going to find out that he can't play that dodge anymore.
But in the interim, he still has to comply with the New York Judges directive to provide the documents requested in discovery, because there is no stay and he cannot hide behind that as it is, and he has even admitted to that. Saying that he is requesting a stay does not protect him.
It is also interesting that you mentioned in another post (#54410) the aspect of a summary judgement. Should he fail to provide the documents requested in discovery, in the time frame the judge has set, he is subject to a summary judgement on behalf of HLNT. Humphries should have just provided the documents. Better yet, he should not have committed the fraud in the first place.
Yes, PD, please do explain to Espinoza the take that you have on things. He needs more confusion at this time.
Quite interesting.
In the first part that that has been set in bold type, the reference to the statement made in Foster's Suit against Humphries appears, when correlated with what has been presented in the Release from Liability, seems to "insinuate" that Foster and Robinson knew all about the NIR notes. The problem with that "insinuatation" is that it fails to stand up when proper context is applied to that information, along with the timeframe in which the documents occurred.
The deal worked out with Humphries indicates that, according to the evidence presented in terms of SSEV's financial statement, that Humphries didn't tell Foster and Robinson of the NIR notes in July and August of 2009. The Release from Liability was not created until the end of February, 2010, at which time, Robinson and Foster were told of the Note Conversions. The requirement to show them how the Conversions had to be done, and the absence of the Notes in the July 2009 financials simply serve to confirm and support the statement made in Foster's filing against Humphries in July and August of 2010. Now in the case filed against Humphries in Bankrupcty court in Jan/Feb of 2012, that information was presented in the proper context, of explaining what was done during the contract negotiations in 2009.
In addition, Foster's filing against Humphries indicated that Foster did not get paid for the Companies that were transferred to SSEV in July/August, and by the time that statement was made in the Release of liabiltiy, the assets of the HOSS and HHI companies had still not been paid for by Humphries, so the statement that all that was in SSEV was the software asset was correct, as the contract in which the HOSS and HHI were to be transfered were never consumated under contract law.
There is no slight of hand, except in which the events are taken out of context and the dates are ignored so as to look like there is some sinister plot going on involving Robinson and Foster.
Regards Foster's and Robinson's current ownership involvement in the company is concerned, HLNT will release that information at the appropriate time, and until that time, to say that either man is converting preferred to common and selling them is more inuendo.
But PD, I do have a question for you. Humphries has made a declaration to the Judge in the New York cases that a "Stay" is in place. Now he has come along and said that there is no Automatic Stay.
Please enlighten all of us as to why you think I was wrong on that issue, since he has now changed his declaration?
Vino, in the Judges order issued on the 28th of February, Humphries was instructed to provide documents in discovery within 20 days (Document #154 on the SCROLL System). Generally, that means 20 consecutive calender days, which would mean that he has to comply by tomorrow, the 19th of March, allowing for the 29th of February. If the judge allows him any time for weekends and holidays, then that would give him until the 27th. But personally, I doubt that he will comply, since in his declaration he filed last week, he restated his position that all of the Documents were with the SEC (Document #157 on the SCROLL system).
However, he could still surprise us.
It is not enough to state that he has given the documents to the SEC, Humphries is going to have to show the court what steps he took to get the documents, ie, who did he contact at the SEC and when and why wasn't he able to get the documents. Of course, what he says will have to be verifiable, for example, any written correspondance making such requests or asking for clarification for any reason that his request was denied, on any demands, or phone records showing when he called as who he called. What he doesn't understand is that HLNT's lawyers are going to be talking to the SEC to confirm his story, and if there are any holes in it, they will certainly be sure to inform the Judge.
Additionally, Humphries is relying on his belief that he has a stay in effect, which he is going to find out very soon, isn't true.
Humphries, if he doesn't comply with the Judge's order or produce valid proof as to why he was unable to provide documents demanded in discovery, will have destroyed any chance he may have had of defending himself in the New York case as regards to the Counter Claims and 3rd Party Action.
Humphries has been playing a game of dodgeball with the courts, and he is able to get smacked right between the eyes with the ball for his shenanigans. This next week is going to really be something.
Of course, the opinions expressed herein are my own and investors should conduct their own due diligence and invest accordingly.
In post #54242, where it was said "Go back and read and understand the PACER docs Sparks.", I decided that I should give readers a day to follow the advice and see if it made sense. Went to the mountains today, enjoyed a 3 mile hike at the 6000 to 7000 foot elevation, and came back to see what happened. And here I find another post that is compounding the errors in the post listed above.
Confidence in the super stud heavy hitter Espinoza seems to be well placed. What is it? Oh yeah, he filed a Motion of Continuation of Stay in Consecutive Case. In his filing, it is stated that Humphries "hereby moves that this court order, under Title 11 United States Code Section 362(c)(4), that the full protections of the Automatic Stay be applicable to the debtor in this case...". This is on page 1, in the first paragraph of the filing.
As has already been pointed out, Espinoza has already conceded that this filing has three prior filings, so accordingly, Code Section 362(c)(4) [CS 362c4, for a shorter expression] applies per Paragraph CS 362c4ai. But Paragraph CS 362c4ai also states "... the stay under subsection (a) shall not go into effect upon the filing of the later case; ...". I don't know how this could be interpreted in any other way other than to say that there is no Automatic Stay at the time this case is filed.
But there is more here. Under Paragraph CS 362c4b, "if, within 30 days after the filing of the later case, a party in interest requests the court may order the stay to take effect in the case as to any or all creditors (subject to such conditions or limitations as the court may impose), after notice and a hearing, only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed;". There has not yet been a hearing on this Motion by Espinoza. So again, there is no stay in effect.
So like PD tells us to do, lets connect a few dots. Dot 1, this is the 4th filing. Check; Dot 2, no Automatic Stay is in effect. Check; Dot 3, Espinoza has filed a Motion to have the stay put into effect. Check; Dot 4, no hearing has been held and no stay has been put into effect. Check;
Now lets turn to the NY Case. Humprhies has filed a declaration with the Judge in which he states "a stay is presently in effect."
Having provided that information, lets add a few more dots. Dot 5, Humphries has declared a stay is in effect. Check; Dot 6, no stay is in effect. Check; Dot 7, Humphries has made a false statement. Check; Dot 8, Humphries has committed perjury. Check;
I would say that most readers can guess where this will go from here, and I would dare say, Humphries in in something deep and that something deep is going to hit the fan this next week. And this is the man that we have been frequently told in the past is going to be the key to HLNT's undoing when he gets up there to testify?
Sorry to be redundant, but there is even more yet. Let's forget, for the moment, that Humphries screwed up, and take another look at Mr. Espinoza's Motion. In his Motion, under the paragraph marked as number 6, "Pursuant to Title 11 United States Code Section 362(c)(3)(b), ..." Hey, wait a second. CS 362c3 doesn't apply to this petition, and therefore, CS 362c3b doesn't apply here either. My goodness, super dooper Espinoz is filing under the wrong code section, even after he identified the correct code section, CS 362c4, in his opening paragraph.
Alright, let's pretend for a moment that Espinoza didn't file under the wrong CS to see where he is headed. The rest of that first sentence of paragraph 6 follows: "... on the motion of a party-in-interest -- debtor herein -- for continuation of the Automatic Stay, the court may extend the stay ...., after notice and hearing, completed before the expiration of the 30 day period, only if the party-in-interest demonstrates that the filing of the later case is in good faith...". The word 'continuation' implies that something exists that is to be continued. However, Mr. Espinoza has labored to demonstate that there is no stay in effect in his previous paragraphs. The original stay was terminated when Humphries Chapter 11 bankruptcy was dismissed for cause. In his second bankruptcy, CS 362c3 applied, and the Automatic Stay ran 30 days and just as automatically terminated before the 2nd filing was terminated for cause. In Humphries 3rd filing, even assuming that the 30 rule of CS 362c3a applied, the Automatic Stay automatically expired in November, 30 days after the case was file. So it is quite evident here that Mr. Espinoza is arguing for something that doesn't even exist.
But for the sake of argument, lets pretend that there is a stay in existence for which he is arguing for a continuation. The motion requires that Mr. Espinoza prove that the prior filing have been done in good faith. Mr. Espinoza contends that the first case, the Chapter 11 Case, was dismissed because Humphries missed a BK meeting as he was incarcerated. Wrong! The Trustee had the case dismissed because Humphries could not show income to support the requirements for filing a Chapter 11 BK. The law requires that Humphries have a substantial excuse, and mere inadvertance, ie being incarcerated, is not a substantial excuse to not having the income to support a Chapter 11 filing. So the Chapter 11 filing was dismissed in bad faith. In the second filing, Espinoza makes mention of Humphries excuse that Humphries attorney in that case didn't file a fee in time. So far, his attorney in that case hasn't stepped forward to admit that was true. Maybe that needs to be looked into. But we can still give Humphries the benefit of the doubt in that instance. However, in the third filing in October, in which CS 362c4 also applied, and there was no Automatic Stay (Walters lawyer tried to use a non existant Automatic Stay in filing a motion in the New York Case, but quickly withdrew the motion when it was pointed out that there was no stay.), the filing was dismissed for cause because Humphries did not meet the filing requirements, as he miscalculated the time coverage of the Credit Counseling by one day. The miscalculation also fails as a substantial excuse as it also falls under the mere advertance rule. So his October filing was also in bad faith. So in reality, Mr. Espinoza is simply trying to pretend that Humphries filed in good faith by ignoring the requirements of a substantial excuse without inadvertance.
From PD's post #54242: "I also suggest you look deeper into section 362, the automatic stay and interested parties. It seems your reading and then reportin your wish list instaed of facts. Bone up bro, you're headin in the wrong direction. None of this will mean a hill of beans in the NIR v HLNT case but I already see Espinozas stay strategy even if a legal interested party raises it's head."
Ain't my wish list. It seems that Espinoza's game winning strategy is one in which they pretend that CS 362c4 doesn't exist, and that they pretend that CS 362c3 applies, and that they pretend that there is an Automatic Stay in place, and that they pretend that Humphries filings have all been in good faith. Lots of pretendsies in that strategy. Super Stud Heavy Hitter Espinoza has turned out to be nothing more than a powder puff. He, at the very least is ignorant of the law, and at the worst, is outright incompetent. Seems we have here some more of that "handful of air" stuff that Humphries, Walters and Ribotsky used to put together that "Asset Agreement".
Okay a few more dots to connect. Under CS 362c4aii, "on request of a party in interest, the court shall promptly enter an order confirming that no stay is in effect;". Dot #12, an interested party can have the judge confirm that no stay is in effect. Check;
By the way, the missing Dots 9 through 12 will be filled in by HLNT's lawyers in the New York case this next week.
As I have discussed in Post #54239, "according to Title 11 U.S.Code, Section 523(a) "A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt— ..." and with particular reference to Paragraph (4): "for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;".
Dot #14, a party in interest can file to have the claims declared non dischargeable under CS 523a. Check; Oh, by the way Dot #13 will be taked care of by HLNT's lawyers for the bankruptcy case.
When HLNT files its complaint against Humphries in the current BK filing, they will be able to depose Humphries. Dot #16, Humphries will be deposed. Check; Dots #14 and 15 will be filled in by HLNT upon filing their complaint as a party-in-interest in Humphries current BK.
Enough has been said here for readers to get through, and more can be said later. There will be more Dots to connect along the way. But I will say that I do hear more dominoes falling. Humphries ability to use the Automatic Stay to avoid the New York case. Gone. Humphries ability to use Bankruptcy to protect himself, about to be gone. Humphries ability to avoid a deposition and provide discovery, about to be gone.
Who cares about Humphries? You do, you have often said in your posts that 'Humphries is the key' in some related line of wording. So if Humphries doesn't fulfill your prediction, now he has no value?
HLNT/NIR/Humphries/Walters/PWC Lawsuits update 03/16/2012, Part III and Summary:
Now back to Humphries Texas Bankrupcty case and Document #4 Motion for Continuation of Stay in Consecutive Case.
First, in paragraph #5 of that filing, Humphries attorney, Mr. Espinoza, states that Humphries 3rd filing was dismissed "...after the court found that debtor had failed to comply with the requirements of Title 11 of U.S. Code Section 103(h)...".
Second, in paragraph #6a of that filing, Humphries attorney attempts to casually dismiss Humphries failure to correctly file his 3rd petition by offering as proof that Humphries "miscalculated the 180 days by one day."
According to Title 11 of the U.S. Code (Bankruptcy code), Section 362, Subsection (A), Paragraph (4)(D), "
for purposes of subparagraph (B), a case is presumptively filed not in good faith (but such presumption may be rebutted by clear and convincing evidence to the contrary)—
(i) as to all creditors if—
(I) 2 or more previous cases under this title in which the individual was a debtor were pending within the 1-year period;
(II) a previous case under this title in which the individual was a debtor was dismissed within the time period stated in this paragraph after the debtor failed to file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be substantial excuse unless the dismissal was caused by the negligence of the debtor’s attorney), failed to provide adequate protection as ordered by the court, or failed to perform the terms of a plan confirmed by the court; ..."
Mr. Humphries, not any attorney, failed to file correctly and this failure falls under the "mere inadvertance or negligence" meaning of the code. This will leave the Judge no choice but to dismiss, as required by law, the Motion filed by Humphries attorney, and Humphries will not be able to get the stay, automatic or not.
But now HLNT will file the really effective response. In the Third Bankruptcy filing, HLNT filed a complaint against Humphries in which they sought to have a determination made as to whether or not HLNT's claim was dischargeable. But now, according to Title 11 U.S.Code, Section 523(a) "A discharge under section 727, 1141, 1228 (a), 1228 (b), or 1328 (b) of this title does not discharge an individual debtor from any debt— ...
" with particular reference to Paragraph (4): "for fraud or defalcation while acting in a fiduciary capacity, embezzlement, or larceny;".
Interpretation:
The New York Judge's upholding of the Breach of Fiduciary Responsibility by Humphries directly ties into and supports the Complaint that HLNT will file. This will make the case easier for HLNT against Humphries and allow HLNT to have the Counter Claims and 3rd Party Action removed from the influence of any Bankruptcy filing by Humphries, permanently. That will make any case that HLNT is involved in go smoother.
An added dimension. Humphries was in a lose/lose situation when it came to filing this latest bankruptcy petition. Had he not done so, he could not use the bankruptcy to give him an excuse in the New York case. But because he has filed bankruptcy, HLNT can now go after him with the "Party-in-Interest" complaint. And what that means? HLNT can now get a deposition from Humphries that he can't refuse, cause it is part of the bankruptcy complaint. But expect a lot of invoking of his rights against self-incrimination.
Speaking of which, do you suppose that Walters thought that he might need to consult a criminal attorney in the Texas Case? Like there could be a criminal issue over two little notes, now c'mon. Wonder if that could be because of a little ol deposition that he will have to give in that case. Do we hear an echo, invoking of his rights against self incrimination? And the judge in that case isn't going to put up with any B.S. when it comes to Walters games with discovery.
Summary:
The legal strategy of trying to bury HLNT in legal fees does not seem to be working. Now, Walters and Humphries both boxed themselves into a confined space. What's the analogy? Oh yeah, like being down by 20 points in the NCAA, with 5 seconds left on the clock, so they decide to hide the basketball. Real winning strategy that is. HLNT will get the depositions, and the discovery. But this all reflects back to the New York case and the Judge's dismissal of HLNT's allegations of fraud and the ability of HLNT to appeal that decision. And that's another area that is turning up some interesting material. But that is for another post.
The opinions presented in these three posts are my own, and each investor should conduct his or her own due diligence and make any investment decisions accordingly.
And as PD says, connect the dots if you want.
Mr. Espinoza failed to mention that in his original PHV application. My guess is that you missed the part where the Bankrupcty Judge told Espinoza to get his application straight or it would get thrown out. The bankrupcty judge didn't tell that to Mr. Robinson or Mr. Southern, just to Mr. Espinoza.
HLNT/NIR/Humphries/Walters/PWC Lawsuits update 03/16/2012, Part II:
The filing of true interest is Document #4, Motion for Continuation of Stay in Consecutive Case. Rdsd has provided a link to the this document on the New York Scroll system, where Humphries has himself had the document filed as an exhibit with his filing (Document 157), stating that "Moreover, declarant has
now filed a Chapter 7 Bankruptcy Petition, Case No. l2-40634, in the United States Bankruptcy Count for the Eastern District of Texas on March ll, 2012, and a Stay is presently in effect."
According to Chapter 11 of the U.S. Code (Bankruptcy code), Section 362, Subsection (A), "a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title, or an application filed under section 5(a)(3) of the Securities Investor Protection Act of 1970, operates as a stay, ...". However, Subsection (C) states: "Except as provided in subsections (d), (e), (f), and (h) of this section—" and subsequently in Paragraph (4) of Subsection (c): "(A)
(i) if a single or joint case is filed by or against a debtor who is an individual under this title, and if 2 or more single or joint cases of the debtor were pending within the previous year but were dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707 (b), the stay under subsection (a) shall not go into effect upon the filing of the later case; and
(ii) on request of a party in interest, the court shall promptly enter an order confirming that no stay is in effect;
(B) if, within 30 days after the filing of the later case, a party in interest requests the court may order the stay to take effect in the case as to any or all creditors (subject to such conditions or limitations as the court may impose), after notice and a hearing, only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed;
(C) a stay imposed under subparagraph (B) shall be effective on the date of the entry of the order allowing the stay to go into effect; and
(D) for purposes of subparagraph (B), a case is presumptively filed not in good faith (but such presumption may be rebutted by clear and convincing evidence to the contrary)—
(i) as to all creditors if—
(I) 2 or more previous cases under this title in which the individual was a debtor were pending within the 1-year period;
(II) a previous case under this title in which the individual was a debtor was dismissed within the time period stated in this paragraph after the debtor failed to file or amend the petition or other documents as required by this title or the court without substantial excuse (but mere inadvertence or negligence shall not be substantial excuse unless the dismissal was caused by the negligence of the debtor’s attorney), failed to provide adequate protection as ordered by the court, or failed to perform the terms of a plan confirmed by the court; or
(III) there has not been a substantial change in the financial or personal affairs of the debtor since the dismissal of the next most previous case under this title, or any other reason to conclude that the later case will not be concluded, if a case under chapter 7, with a discharge, and if a case under chapter 11 or 13, with a confirmed plan that will be fully performed; or
(ii) as to any creditor that commenced an action under subsection (d) in a previous case in which the individual was a debtor if, as of the date of dismissal of such case, such action was still pending or had been resolved by terminating, conditioning, or limiting the stay as to such action of such creditor."
Clearly, this states that on Humphries current filing, there is no automatic stay.
By Humphries saying that a stay is now present in his declaration, Humphries has made a false statement. It is going to be interesting to see how the Judge in the New York case handles this.
In addition to his growing troubles, Humphries is about to violate (if he hasn't already done so) the New York Judge's order to produce documents for discovery. He has merely reiterated his claim back in April, which the Judge specifically referred to in issuing her order to produce documents. He is now going to have to explain why he has not produced documents, and substantiate his excuse, not just give one.
This next week is going to be very, very interesting.
The only question that remains is, is Walters going to try to pull the same dodge? We are going to get to set how wise he really is (or not).
End of Part II
HLNT/NIR/Humphries/Walters/PWC Lawsuits update 03/16/2012, Part I:
By necessity, I am breaking up this update into three parts, there is just so much information involved. All three parts will be posted tonight.
Humphries is really something. But oddly enough, his Pro Hac Vice attorney actually makes him look better. A link to the term, "Pro Hac Vice" is given here below:
http://en.wikipedia.org/wiki/Pro_hac_vice
But first, a little background from Humphries 4th Bankruptcy Petition. This is from the Petition filed by Humphries (which requires a Credit Counseling Statement be signed by the debtor, and includes an explanation of the types of bankruptcies), which is document #1, and on pages 7 and 8 is the following:
"Chapter 7: Liquidation ($245 filing fee, $46 administrative fee, $15 trustee surcharge: Total fee $306)
Chapter 7 is designed for debtors in financial difficulty who do not have the abiltiy to pay their exiting debts....
The purpose of filing a chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, the court may deny your discharge and, if it does, the purpose for which your filed the bankruptcy petition will be defeated.
Even if you receive a general discharge, some particular debts are not discharged under the law. Therefore, you may still be responsible for most taxes and student loans; debts incurred to pay nondischargeable taxes; domestic suppoort and property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicatd from alcohol or drugs. Also, if a creditor can prove that a debt arose from fraud, breach of ficuciary duty, or theft, or from a willful and malicious injury, the bankruptcy court may determine that the debt is not discharged."
The part that is underlined is my own indication of significance and relates back to the New York case in which the Judge has already found that HLNT has a cause of action against Humphries for that very issue.
But now for the real teaser. Mr. Espinoza, a lawyer from California (Wonder why a lawyer had to come all the way from California to represent Humphries Pro Bono, and who convinced him to do so?) requested that he be allowed to represent Humphries in his prior filing just as it got dismissed. Now he is back again to help Humphries with his current filing. But an interesting thing has occurred. When he filed for the Pro Hac Vice (PHV), he seemed to have omitted a few details. He listed, in document #5 (his application to appear as PHV) that he only had one reprimand in his past, some 18 years ago, you know, just a little tiff between lawyers over who owed what. But it appears that he wasn't being honest, and the Judge in the case issued him an order to get his application corrected, in one day, or risk having his application "stricken by the court without further notice". The Judge's order was document #7. So sure nuff, in one day, Mr. Espinoza files an updated PHV application, and it shows that not only did he have a reprimand for non payment of a fee 18 years ago, but now come to find out that he had a DWI in 1975 that he forgot to mention. Furthermore, in 2006, he received a reprimand for the mishandling of client money, although the client did get the money back. This was in document #8, as filed by Espinoza. The judge granted his PHV, mostly because he has performed PHV services in other cases in Texas. This is document #11. All these documents are available on the PACER System, Bankruptcy Court, Eastern District of Texas, Case #12-40634.
No doubt, Humphries creditors are pleased to have this man represent Humphries.
End of Part I.
Your opinion. Right now, I am doing due diligence on the Humphries bankruptcy. Your gonna laugh at what shows up there.
That is an interesting take there, PD. You mean that all HLNT has to do is file a document with the corporate division to make you a director, and make your responsible for everything that they do? Laughable.