It is all about the trademark licensing agreement.
(1) Cirtran failed to meet minimum licensing agreement requirements and did not meet settlement agreement arrangements.
“"Despite its best efforts," Play Beverages acknowledges it failed to meet the minimum net sales required by its licensing agreement.’
Play Beverages, LLC, et al. v. Playboy Enterprices, Inc. et al.
As discussed in detail in Item 3. Legal Proceedings, on December 6, 2012, the bankruptcy court dismissed the PlayBev bankruptcy case that had been initiated by creditors that filed an involuntary bankruptcy petition against PlayBev in April 2011. Shortly after filing, the bankruptcy proceeding was converted into a Chapter 11 reorganization proceeding, with PlayBev acting as debtor-in-possession. Playboy initially sought to terminate its product license agreement with PlayBev, but thereafter stipulated to suspend further proceedings pending the exploration of settlement. PlayBev reached a settlement with Playboy that would have provided for a new license, conditioned on bankruptcy court approval of PlayBev’s reorganization plan, PlayBev’s payment of $2.0 million to Playboy, and other provisions, but PlayBev was unable to obtain the funding needed to pay Playboy the initial amount or otherwise implement the reorganization plan, so the plan was abandoned and the settlement agreement and the new Playboy license did not become effective.
Cirtran 2012 10K
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