At 2:45 PM PST motion was granted by court for Clsc to remain in BK 11 until next court date of June 10, 2009. No objections were made by either BK court trustee Hauser (present) or YA Global via telecom.
BK 7 filing rejected by court.
All other issues resolved in clsc favor.
10 day appeal is possbible to these rulings but unlikely due to no objections as stated above.
Court/Judge is now allowing clsc to immediately move forward with submitted plans to begin manufacture, distribution and sale of Pre-Histin. Announcements of these plans and agreements to the general public can also be immediately released.
Judge is requiring Clsc to submit monthly progress reports in Feb, March, April and May showing progress toward resolving creditor payments (Cornell/YA global and Gryphon) and developing revenues and profitability. YA global payments have been made as per a previously negotiated plan.
Gyphon as creditor payments to be negotiated at substantially reduced funding (IMO) by clsc in near term to remove this other debt obstacle to going forward.
These monthly reports are to be made to both YA Global and the court trustee only, not to the judge.
As long as reports made and show progress toward clsc as viable commercial entity, judge will not weigh in on the matter until June 10. If sales have begun and creditor issues resolved on June 10, then clsc can request emergence from Ch 11 reorg, request to remain in Ch 11, or YA could again try to seek Ch 7.
Bottotom line is federal court has granted clsc management 5 months to prove this is a viable business with near term profitability allowing the current shareholders an opportunity to re-coup their investments.
All in all a great day for this company that now must execute in a timely manner and make reports to the trustee monthly.
MPT
