Spongetech Delivery Systems, Inc. (fka SPNGQ)

[Christy from Google]

A very sloppy job on the MOR in general, and in particular the payroll taxes. Clearly a mistake by the preparer.

Reason #1:
Fiduciary duties of Trustee to IRS. The IRS gets paid Post-Petition, or its major problems.

Reason #2:
The Payroll processor is ADP, and they will not be a party to a problem with the IRS.

Reason #3:
MOR-1 Schedule of Receipts and Disbursements indicates net Payroll is $48,125 and payroll taxes are $11,603. Total $59,728.
MOR-Attachment 5B indicates the following payments to ADP:
6-29-10 $8,093.50 (WE #26 & 25)
7-30-10 $17,460.96 (WE 28), $10,227.86 (WE 29), $11,602.75 (WE 30); and
7-31-10 $4,173.88 and $9,237.61 (WE 31)

Total $60,796.56
Difference is payroll processing fees of $1,068.56 (a guess)

Reason #4:
The $29,078 makes no sense, while the paid $11,603 above does make sense

The reason for the mistake (IMO, of course):

Just the necessary paperwork required in a bankruptcy. Just takes time to setup the bank accounts, get ADP st8 and have the Trustee get his arms around situation. If you noticed the payroll wasn't paid until the end of July, yet the accruals were made mid-July. Just sloppy accounting and DD by lawyers. And thats just one minor mistake.

The BS and IS presentation for Pre and Post, was Horrible.