Replies to post #305317 on Spongetech Delivery Systems, Inc. (fka SPNGQ)

[puppydotcom]

nope... not a chance spong can survive .. if spng files BK is over .. share holders will get zip

commons are last in line .. and this company faces millions and millions in debt from all pending liabilities from the suits and the SEC

[OldTymer]

CFG, yes, that's the unknown at this time...

What their debt to assets are. If they have enough assets, good chance the shareholders will come out of this okay. Of course, like you said, IF they file Chapter 11. I don't think they have any plans to file. It's an option of last resort. Can't wait to see how this all ends up. What a wild ride! And me, I forgot my saddle.

[StinkyJunk]

"Post Bankruptcy Balance Sheet, will tell the story."
I disagree with that statement....Post BS (no pun intended)will not be audited (like pre was ever audited..ugh)...you can hide a lot of stuff behind the scenes...but who says they're going 7 or 11?

[Xenophon]

"The rush to turn a unsecured debt to a secured one is a powerful motive"

In what way does getting a court judgement against a debtor turn that debt into secured debt? Secured by what security interest?

A secured debt is debt backed by specific collateral such that default allows the creditor to obtain ownership of that collateral.

A court judgement is not secured by any collateral. It is judgement that can be registered as a lien against property - butt what property does SPNG really own? We have no evidence (that I am aware of) that SPNG (the legal entity) owns any real property or even inventory of sponges at this or any point. So the judgement could be registered as a lien against what?

And a lien is not technically a secured debt, as a lienholder cannot acquire ownership of the liened asset as a result, the lienholder only has a right to prevent the owner from transferring ownership without first extinguishing the lien.

Maybe this is not your understanding - if not, please educate me as to where I am incorrect as I would like to learn something if my understanding is not correct.