Dicon Technologies, Inc., a wholly owned subsidiary of Spongetech, is a debtor in a Chapter 11 Proceeding in the United States Bankruptcy Court for the Southern District of Georgia. Many of the emails received by the Trustee inquire as to when the Dicon case will be moved to New York and consolidated with the Spongetech case. The Trustee has had discussions with the Trustee for Dicon who advises that Dicon and its creditors will oppose any effort to move the Dicon Bankruptcy Case to New York and/or to consolidate the Dicon case with the Spongetech case. The Dicon Trustee advises that there are over $1,000,000 in claims asserted against Dicon which are unique to Dicon and Debtor has approximately $1,160,000 receivable from Dicon. Please note that since the Dicon case was “first filed” in the Bankruptcy Court for the Southern District of Georgia, it cannot be easily transferred to the New York Bankruptcy Court. The Dicon Trustee will also oppose any effort to consolidate Dicon with Spongetech. The Trustee is continuing to review and analyze the situation with Dicon and is in communication with the Dicon Trustee. The Trustee has not reached any conclusions as to whether to forcibly seek the transfer of the Dicon case to New York or to forcibly seek the substantive consolidation of Dicon with Spongetech.
In deciding how to address the Dicon situation, the Trustee’s primary consideration will be how to best maximize the value of Spongetech’s ownership interest in Dicon for the benefit of creditors and shareholders of Spongetech.
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