CirTran Corporation (CIRX)

[MFlores]

Playbev filed for Chapter 11 due to Playbev’s creditors.

“On April 26, 2011, three alleged creditors, LIB-MP Beverage, LLC, George Denney, and Warner K. Depuy, filed an involuntary Chapter 7 petition against PlayBev, seeking its liquidation and related matters. In re Play Beverages, LLC, United States Bankruptcy Court for the District of Utah, Case No. 11-26046. Thereafter, the case was converted to a voluntary Chapter 11 reorganization case. PlayBev worked subsequently as debtor-in-possession to propose and confirm a plan of reorganization based on a new license agreement with Playboy that was to become effective as part of a court- and creditor-approved plan of reorganization, subject to obtaining requisite financing. In addition, CBC entered into agreements with PlayBev to resolve intercompany advances, settle claims, and transfer CBC’s beverage distribution assets to PlayBev. CBC was to receive equity and an ongoing share of revenues from the reorganized debtor. Since the required court and creditor approvals and financing were not obtained, none of the foregoing agreements became effective.”

When the beverage company went into Chapter 11 bankruptcy in August 2011, it agreed with Playboy to extend the existing license agreement while negotiations for a new one were still pending, the complaint said. But Play Bev failed to meet the conditions for the new license agreement after it didn't obtain investment funds to capitalize the reorganized business and confirm its Chapter 11 reorganization plan.