Worthington Energy, Inc. (fka WGASQ)

[xZx]

montecito was paid in cash (over $1.5M) and in stock (at a very high price). they also had a note for $500K, as i recall. see the PR linked below:

The agreement calls for a deposit of $250,000 paid to Montecito by April 4th. The remaining balance of $1,750,000 plus 15,000,000 shares of Paxton common stock are due to Montecito by May 27, 2011.

http://mobile.wnd.com/markets/news/read/18028469/paxton_energy_enters_into_definitive_purchase_agreement

we were in default on the $500K and the stock they received was at 2.64 per share, if my memory serves.

i don't see where montecito has any right to contest the stock they were granted. there was no warranty given that the stock would stay at any price. this is the nature of cash and equity deals.

so if this is montecito's argument, imho it will fail in front of a judge.

the $500K needs to be paid, and ventana group stands at the ready to lend the first tranche of $3.5M, of which montecito will probably get their $500K.

perhaps the only debate in the settlement will be how much additional stock do we give montecito to make them "whole"?

maybe 17M restricted shares? we shall see. jmho.