George L. Miller, Trustee

Eight Penn Center, Suite 950

1628 John F. Kennedy Boulevard

Philadelphia, PA  19103

 

Phone:  (215) 561-0950

Fax:  (215) 561-0330

Email:  [email protected]

 

 

January 18, 2007

 

STATUS UPDATE #13

 

NOTE: The Status Updates are cumulative.  Please read all thirteen updates.

 

Case Administration

 

Over 26,534 proofs of claims have been recorded to date.  The Clerk of the Bankruptcy Court has advised me that all timely filed claims have been docketed.  If you have questions regarding proofs of claim, I recommend you have your attorney research your questions. Please have your attorney research your claim to determine if it is filed.

 

Litigation

 

I will not comment on pending litigation other than to describe the procedural status of such matters.  Please review status update #11 and 12 for additional information.

 

State Court Action

 

No activity since Status Update #12 was issued.

 

The Federal District Judge must decide whether the matter should be heard in Federal or State

Court.  Awaiting the Judge’s determination.

 

Bankruptcy Court Action

 

No activity since Status Update #12 was issued.

 

The Bankruptcy Court Judge must determine whether to dismiss the Trustee’s claims against

each of the Defendants or allow the Trustee to proceed with the lawsuit.  Awaiting the Judge’s

determination.

 

Both the State Court Action and Bankruptcy Court Action will likely take years to litigate unless

settlements are reached between all parties.

 

Preferences

 

One of my duties as a Bankruptcy Trustee under 11 U.S.C. Section 704 is to investigate the financial affairs of the Debtors.  Based upon my review of the financial affairs of the Debtors, it appears certain creditors who were either vendors or noteholders received preferential payments from the Debtors.   Generally a preferential payment under Section 547 of the Bankruptcy Code  is a debt payment made to a creditor in the 90-day period before a debtor files bankruptcy (January 21, 2005) (or within one year if the creditor was an insider) that gives the creditor more than the creditor would receive in the Debtors’ Chapter 7 case.   Accordingly, on or about January 18, 2007 I will be initiating numerous lawsuits to recover these preferential payments under Sections 547, 548, 549 and 550 of the Bankruptcy Code.   I have limited the lawsuits to those parties who received in excess of $10,000 of preferred payments.  I am commencing these actions to fulfill the requirements imposed upon me as a fiduciary in my capacity as Bankruptcy Trustee.