Spongetech Delivery Systems, Inc. (fka SPNGQ)

[starfire]

Without going into excruciating detail...... I guess the way the issues were presented implied that they would have a very negative impact on the BK petitioning process. But my response implied those issues don't pose a nuclear threat to the BK petition. I believe the petitioning party will be asked to rectify. Time will tell.

Issue #1:
"The individual authorized by the debtor entity (the corporation or partnership) to file the petition should sign the petition and
include the individual’s title and the date on the lines provided. By signing the petition, the
authorized individual is representing that the information in the petition is true and correct, and
that the individual has been authorized to file the petition on behalf of the debtor."
The petition was signed by the Vice President of Sales. There has been no filing reporting his election to the BOD or establishing his position as an officer of the corporation. Did he have authority to file the petition and, if so, who provided it?

Issue #2:
"A corporation that files a bankruptcy case must be represented by an attorney."
"If an attorney is representing the debtor in the bankruptcy case, the attorney must sign and
date the petition and set out the attorney’s name, address, and telephone number in the spaces
provided."
The Printed Name of Attorney for Debtor on the petition is Edward Neiger. However, a letter to the court sent the day of the filing appears as document #2 in the docket, with the docket text stating "Letter informing Court that Neiger LLP does not represent the Debtor filed by Edward E. Neiger on behalf of Edward Neiger. (Neiger, Edward) (Entered: 07/09/2010)". The letter itself says "I write to inform this Court that neither I nor my firm represents the Debtor in this case. This firm has been engaged to provide bankruptcy and restructuring advice to Spongetech, but it has not agreed to represent the Debtor in this case, and I did not sign the petition." On the last point, there is some kind of mark in the signature area of the petition, leaving the question as to whether it is Neiger's signature or something else. Note that Neiger's signature DOES appear on his letter and it looks absolutely NOTHING like the mark on the signature line of the petition. This could be a BIG problem.

Issue #3:
"The debtor is required to complete and file Exhibit “A” only if the debtor is a corporation
requesting relief under chapter 11 and if the debtor is required to file periodic reports with the
Securities and Exchange Commission (“the SEC”) pursuant to section 13 or section 15 of the
Securities Exchange Act of 1934. If required, the debtor should check the box on page 2 and
complete and attach the “Exhibit A” form."
http://www.uscourts.gov/uscourts/RulesAndPolicies/rules/BK_Forms_1207/B_001A_0997f.pdf
The referenced box is unchecked and there is no sign of any attached exhibits on the form or in the docket. Note that the form allows for the possibility that the filing may not be current: "The following financial data is the latest available information and refers to the debtor’s condition on XXXXXX."

Issue #4:
"Accordingly, the form requires the chapter 11 debtor to self identify at filing whether it believes it
is a small business debtor and to disclose whether its debts are less than $2,190,000 million by
checking the appropriate boxes."
No box was checked.

Issue #5:
"If the debtor is a business, the debtor should
state the county where the principal place of business is located. A business debtor should
designate the location of the principal assets of the debtor, if different from the street address."
This section was left blank. The list of assets when provided will determine whether, based on Dicon values, it should have be