Replies to post #327657 on Spongetech Delivery Systems Inc (fka SPNGQ)

[Xenophon]

DIP financiers are NOT guaranteed repayment - they are a higher priority than pre-petition unsecured creditors, but if the business is not viable, they are below essential business expenses like payroll, insurance, warehouse rent, office lease, etc.

Many DIP financers lose money and many lose it all.

Especially in pennystock land where suckers who are in for a common share PP are often dumb enough to be suckered for a hopeless DIP financing loss (aka "the suckers double DIP").

Never underestimate the stupidity and self-destructiveness of human beings trying desperately to chase their losses. Go to any casino and watch the losers at the ATMs, then signing markers and losing the house, then selling their car at the used car lot, and walking back to the craps/blackjack tables PLANNING to win it all back THIS TIME.

[puppydotcom]

And Pupster, Hymenroth is half-correct on the contract damages issue, however IIRC the claims were for money that was actually owed for the month(s) that were in arrears and for which Spongetech had rented the advertising and it was not resold to other clients. I'd have to dig up and reread the MSG, etc. lawsuits, butt I am pretty sure those checks were not for prepaid ads but were already months in arrears (IIRC the last RME check was for services rendered the prior Nov/Dec).

they defaulted on the written agreements - that's why they're debtors in the BK .. the contracts are written according to the agreements between the two parties - if they allow an early out .. its their agreement ..

its up to the harmed party to decided to start legal action on spng
spongy has no say ...

bad checks are still bad checks .. no matter how they're spun by spongy and the supporters - the companies holding the bad checks ... have said so

any way all of this is moot now because of the Chapter 11