Replies to post #325192 on Spongetech Delivery Systems Inc (fka SPNGQ)

[Macho Man]

The SEC is not a "creditor" here. It is suing for fraud. The distinction is quite clear.

The bankruptcy filing is relevant to the MSG's, Citi Fields and Chicago Blackhawks of the world, i.e., the sports franchises SPNG screwed over.

[puppydotcom]

yes, you can. you cant get rid of criminal charges but all old debts and those incurred prior to filing are part of the creditors claims. since there have been no judgements, it just goes away. somehow, but i dont know how.


so you claim by filing BK it removes any fraud charges and claims?

NOTES

1. Debts not discharged include debts for alimony and child support, certain taxes, debts for certain educational benefit overpayments or loans made or guaranteed by a governmental unit, debts for willful and malicious injury by the debtor to another entity or to the property of another entity, debts for death or personal injury caused by the debtor's operation of a motor vehicle while the debtor was intoxicated from alcohol or other substances, and debts for certain criminal restitution orders.11 U.S.C. § 523(a). The debtor will continue to be liable for these types of debts to the extent that they are not paid in the chapter 11 case. Debts for money or property obtained by false pretenses, debts for fraud or defalcation while acting in a fiduciary capacity, and debts for willful and malicious injury by the debtor to another entity or to the property of another entity will be discharged unless a creditor timely files and prevails in an action to have such debts declared nondischargeable. 11 U.S.C. § 523(c); Fed. R. Bankr. P. 4007(c). return to text

http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter11.aspx


What is the Role of the U.S. Securities & Exchange Commission in Chapter 11 Bankruptcies?
Generally, the SEC's role is limited. The SEC will:
• review the disclosure document to determine if the company is telling investors and creditors the important information they need to know; and
• ensure that stockholders are represented by an official committee, if appropriate.
Although the SEC does not negotiate the economic terms of reorganization plans, we may take a position on important legal issues that will affect the rights of public investors in other bankruptcy cases as well. For example, the SEC may step in if we believe that the company's officers and directors are using the bankruptcy laws to shield themselves from lawsuits for securities fraud.