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SpongeTech Delivery Systems, Inc. Message Board

  • pilond2 pilond2 Jul 21, 2010 9:26 AM Flag

    JULY 21 **E-MAIL** to S. Gregory HAYS (OUR **TRUSTEE**)...


    From: David Pilon <>
    Sent: Wed, July 21, 2010 8:44:00 AM
    Subject: Worries on your appointment at SpongeTech

    Hi Mr. Hays,

    I am a SpongeTech shareholder.

    You have been appointed as Trustee for SpongeTech Chapt. 11 process.

    But, you are the same person that SEC wanted to appoint as receiver to bring SpongeTech to status quo and liquidate company assets to whatever creditors.

    This worries me because I am under the strong impression that SpongeTech is NOT a candidate for liquidation, but more for turnaround, but SEC wanted liquidation, and wanted you to be appointed, and now you end up being appointed via bakruptcy court, but still, you are the person SEC wanted in place.

    Also, management from SpongeTech indicated their intention was to use some form of prepackaged bankruptcy. That indicates to me even more that SpongeTech is NOT a candidate for liquidation, but more for turnaround.

    Also, if you look at the exhibits 41-1 to 41-7 and 42-1 to 42-6 filed in SEC case against SpongeTech, and coming from Alvarez & Marsal (A & M) (a firm specializing in turnaround advisory), you will see that A & M analyzed certain sales SpongeTech made from July 2009 to April 2010 and you will see the company made $7.7 million dollars, with only 23 full time employees and 57 representatives paid on commission. To me, these are very good numbers, considering the company was in such a troubled period during those specific 10 months. If you need help to get copies of those exhibits, please let me know.

    You will also see that the companies (SpongeTech + DICON) have 450+ SKUs and are in multiple household names retailers (Walmart, Walgreens, CVS, etc.) (again, this has been verified and documented by independent firm Alvarez & Marsal in the exhibits mentioned above)

    My question for you Mr. Hays is: What is your appointement objective for SpongeTech: turnaround or liquidation?

    Thank you,
    David Pilon

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