Replies to post #110440 on Protagenic Therapeutics Inc. (PTIX)

[GaryJPalys]

Yup! That's the the document says, it would not be allowed under chapter 7 either...

[quim23]

Go atrn!!!

Nice post!! Thanks for your info!!

[Old Hillbilly]

RSPennyStocks, You misread the Document. I don't want you or your group to trade thinking they can not file chapter 7 so this is safe!
Please re read the doc in full context and knowing the definition of "Discharge"
I know a lot of people are intimidated by legal docs and with foot notes put in the middle doesn't help understanding the context.
First lests all get the definition of "Discharge" from the Federal Gov web site:

What is a discharge in bankruptcy?
A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Although a debtor is not personally liable for discharged debts, a valid lien (i.e., a charge upon specific property to secure payment of a debt) that has not been avoided (i.e., made unenforceable) in the bankruptcy case will remain after the bankruptcy case. Therefore, a secured creditor may enforce the lien to recover the property secured by the lien.
http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/DischargeInBankruptcy.aspx

Now lets see how this applies to a ch 7 case:

Chapter 7 Eligibility
To qualify for relief under chapter 7 of the Bankruptcy Code, the debtor may be an individual, a partnership, or a corporation or other business entity. 11 U.S.C. §§ 101(41), 109(b). Subject to the means test described above for individual debtors, relief is available under chapter 7 irrespective of the amount of the debtor's debts or whether the debtor is solvent or insolvent. An individual cannot file under chapter 7 or any other chapter, however, if during the preceding 180 days a prior bankruptcy petition was dismissed due to the debtor's willful failure to appear before the court or comply with orders of the court, or the debtor voluntarily dismissed the previous case after creditors sought relief from the bankruptcy court to recover property upon which they hold liens. 11 U.S.C. §§ 109(g), 362(d) and (e). In addition, no individual may be a debtor under chapter 7 or any chapter of the Bankruptcy Code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing. 11 U.S.C. §§ 109, 111. There are exceptions in emergency situations or where the U.S. trustee (or bankruptcy administrator) has determined that there are insufficient approved agencies to provide the required counseling. If a debt management plan is developed during required credit counseling, it must be filed with the court.

One of the primary purposes of bankruptcy is to discharge certain debts to give an honest individual debtor a "fresh start." The debtor has no liability for discharged debts. In a chapter 7 case, however, a discharge is only available to individual debtors, not to partnerships or corporations. 11 U.S.C. § 727(a)(1) Although an individual chapter 7 case usually results in a discharge of debts, the right to a discharge is not absolute, and some types of debts are not discharged. Moreover, a bankruptcy discharge does not extinguish a lien on property.
http://www.uscourts.gov/FederalCourts/Bankruptcy/BankruptcyBasics/Chapter7.aspx

All business ch 7 are not allowed a "Discharge" If the liquidation of assets does not pay off all debt the remaining debt stays with the business shell.
The SEC said that the plan should be denied because in essence it would discharge debt and we know that is not allowed for business.
Really simple to understand if you look at the statement in the context used.
If you look at my posting history here and even on other boards you will see I try and correct misconceptions the best I know how.
I have "cleaned up" the paragraph in the doc to make it easier to read in its entirety in full context with relevant foot notes at the bottom:

All business ch 7 entities are not entitled to a discharge! business file ch 7 almost daily!
Please don't trade with the false security that ATRN can not change over @ any time if they run out of options!
The judge may even force them to go ch 7 under certain conditions! see
http://www.law.cornell.edu/uscode/text/11/1112
But usually the debtor will convert when he has painted himself into a corner and realizes "Game over"!
This can happen at any time. http://investorshub.advfn.com/boards/read_msg.aspx?message_id=69147395
That stock crash to the bottom in about 15-20 min!
They too were trying to pull a fast one using some related connections to pose as the "stalking horse" which ia a no no!
ATRN is a Q stock now which is one of the riskiest plays.
Hopefully they have a "stalking horse" lined up but if they do they should have just gone that rout with full disclosure from the get go!
Of course if fraud charges are ever brought up they trump all!
Best of luck to all with your trading decisions. Never trade with what you can not afford to lose and try to always preserve capital for the next play!
(I hope I e-mailed this info to your correct address RSP)

Edit: full document is here: http://www.scribd.com/doc/103222564