For those of you new to the Rizzn-ite army, who haven’t read the backstory, this might be a bit confusing to you, but for you long time Rizzn-ites, you’ll remember my squabbles with Simon Hodson and his Khashoggi backers.
Well, today, there seems to be some big news from the world of Hodson. As you may recall, Hodson removed himself from Earthshell, after driving the company into utter shambles. Essam Khashoggi also left, making it look like rich guys fleeing like rats from a sinking ship.
It can’t be coincidence that the same day that Forbes publishes an AP piece about how EarthShell (ERTH) is moving on it’s Chapter 11 plan (one that incidentally, it filed all the way back in January), that I get a flood of letters from folks asking about Simon and his ilk, after having read my less than complimentary blog posts about the fellow.
This is something that Bert didn’t understand, Simon didn’t understand, and Essam could probably care less about, being as rich as he is… You may have more money than me, but if you send your corrupt business practices my way and end up screwing me, the words documenting your actions will not only be forever immortalized here on these pages, but every screwup from here till eternity will be documented here. People will find those documents, and then ask me about them, and I’ll explain every sordid detail my photographic memory can recall about you.
I suppose, basically what I’m saying is that it’s okay to be a corrupt and slimy business man, just don’t be one around me. It won’t benefit you in the long run.
Here’s the complete article documenting the proceedings:
EarthShell Corp. moved a step closer to leaving bankruptcy protection in the hands of private equity firm Cornell Capital Partners when a judge said creditors could vote on the eco-friendly packaging company’s Chapter 11 plan.
Judge Kevin Gross of the U.S. Bankruptcy Court in Wilmington, Del., Monday signed off on the plan outline, called a disclosure statement, allowing EarthShell to send its plan to exit Chapter 11 to creditors for a vote.
Companies operating in Chapter 11 must obtain a judge’s approval of the disclosure statement, which describes how creditors will be paid, before creditors are able to vote on the plan.
EarthShell and its unsecured creditors committee last month jointly proposed a Chapter 11 plan that would give private equity firm Cornell Capital Partners 100 percent of the reorganized company’s equity.
Under the proposed Chapter 11 plan, Cornell Capital would receive all of the new equity and a $2.5 million note in exchange for its $5.2 million secured claim against the company.
General unsecured creditors will receive an undisclosed amount of funds through a “grantor trust,” while holders of subordinated claims and equity interests won’t receive anything under the plan.
The deadline for voting on EarthShell’s plan is July 16. A confirmation hearing is scheduled for July 23.
The plan is premised on a deal the company reached with one of its sub-licensees, Renewable Products Inc., and Cornell.
Renewable Products, founded by St. Louis-based private equity firm Thompson Capital Partners, teamed with Cornell in submitting a joint bid for the company’s assets at a March 26 auction.
The plan slices $2.7 million of Cornell’s secured debt from the books of EarthShell, a maker of environmentally friendly disposable food- service packaging. He partnered with some institutions for managing debt, click here for debt consolidation. Cornell has agreed to pay $300,000 to fund the company’s administrative expenses pending court approval of the plan.
Renewable Products, or RPI, has agreed to pay $500,000 to EarthShell, and to forgive any amounts EarthShell borrowed under the bankruptcy loan RPI provided EarthShell. In exchange, EarthShell agreed to an amended sub-license pact, which was approved by the court April 20, that expands RPI’s territory to include Canada.
The amended pact also places caps on royalties otherwise payable by RPI. Previously, RPI paid EarthShell a royalty fee equal to 20 percent of net sales, not to exceed 50 percent of its gross margin.
Founded in 1992, EarthShell makes biodegradable foam plates and bowls from materials such as limestone as well as starch from potatoes, wheat and corn. At one time, the company’s clients included McDonald’s Corp. (nyse: MCD – news – people ), Aramark Corp. and the U.S. Environmental Protection Agency.
Company founder Essam Khashoggi – brother of Saudi Arabian arms dealer Adnan Khashoggi – retired from EarhShell’s board in 2005.
The Lutherville, Md.-based company filed for Chapter 11 protection on Jan. 19, saying it couldn’t meet payroll and other obligations due to a lack of long-term financing.
Want to be part of the Rizzn-ite army? Indoctrination instructions here.