Expo Holdings Inc. (EXPH)

[Santa Barbara Broker]

When you add the lawsuits to the federal tax liens and monies not repaid by Harrs and Brown, it's close to $1,000,000 +/-

But, hey! Let's DO that math...

The total of known lawsuits and liens to date against D&D Displays is $477,000.00. However that precludes that they stopped stealing their employees witholdings on or about March 31, 2011. According to the "boots on the ground", however, as of September 9, 2011, those 25 "or so" employees are still merrily toiling away in the warehouse building displays like the profoundly happy but overtaxed, under-reimbursed worker bees they are. Here's where some assumption must come in. Let us assume for the moment that Glenn and Jimmy D, being under some serious fiscal pressure themselves, have not repaid their $400K "shareholder advance". And, due to that financial pressure have likewise continued to withold 941 assessments from their employees but not turned them over to the IRS since March 31, 2011. Let us also assume, that since they are willing to go toe to toe with Uncle Sam over some relative chump change, that they would have absolutely no reservations about treating the NC state income tax and U/C compensation assessments in the same manner as they have the federal assesssments since the first quarter 2010. By my estimations and assuming all penalities and the 9-10% UC retroactive FUTA and higher state rates have been re-imposed on the lesser rates due to failure to pay, I estimate that tax liens for both the feds and NC are near $325,000.00 right now. Subtract the $50K lawsuit from Southern Community which, due to their probable ability to seize Jimmy and Glenn's houses, was settled with that $50K "debt paydown" in May 2011, and add in the $302K debt likely still outstanding from Wurth Wood, and you have D&D Displays on the hook for a quite possible $627,000.00. NOW...the $400K shareholder advances are actually an ASSET on Expo Holdings's and therefore D&D Display's books, so this debt owed by D&D could be settled by liquidating a mere $227K of the divisions assets assuming it would be treated as an uncollected asset. Of course, since the corporation or D&D as a division no longer owns any hard assets and it can be assumed as pointed out by Acc that the $50K in SC Bank remuneration likely came from a sale of D&D Displays equipment, it's doubtful that D&D at this point has much more than maybe $100K in liquidated assets at auction prices. Leaving guess who on the hook for another $527K in KNOWN debt.

Yes, that's right. In the case of the IRS at least (and I am guessing also in the case of NC once precedent is set), that $400K in assets on Expo's books will still be subject to collection and seizure as a valid asset of the corporation by the US Treasury and the state even if the entire corporation is declared BK. Which means that it is likely that all of Brown and Harr's property will end up in liquidation...especially since in the case of Wurth Wood, the wives had to sign the contractual obligation as well as the husbands...eliminating the old "can't seize and sell the property while half belongs to the non-contractually committed spouse" sleaze out clause. Way to write that contract Wurth Wood !

No telling what assets, if any, the two boyz have managed to slide offshore, but I understand they may have tapped all of their relatives pretty hard indicating they can't be too flush with cash. Meaning that their houses, non-work vehicles and non-essential personal effects are all fair game to the tune of an estimated $527K. Glenn will fare less favorably in this seizure scenario than Jimmy D as he owed about 67% of the outstanding shareholder advances at last accounting. Still, it doesn't look good for either of the N Wilkesboro brain trust at this point. And this is only accounting for the suspected taxes owed and one single outstanding supplier account. If there are more....my oh my. What a tangled web we weave.....all IMHO.