Earthshell News: Bankruptcy Proceedings are, erm, proceeding.

Hey folks.

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 Chapter 11 Plan Set to Vote

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. 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.

Earthshell Files for Bankruptcy

Awww… poor millionaires and billionaires. Their cashcow Earthshell is finally over.

Earthshell filed for bankruptcy today, according to the Houston Chronicle:

EarthShell Corp., which makes fast-food packaging from biodegradable materials like limestone and food starch, has filed for Chapter 11 protection from creditors.

The Lutherville, Md.-based company listed assets of $16,176 and debt of $11.9 million in its bankruptcy petition, filed Friday in the U.S. Bankruptcy Court in Wilmington, Del.

EarthShell didn’t say in its bare-bones filing why it was seeking bankruptcy protection.

However, EarthShell said in a regulatory filing earlier this month that it had defaulted on a $5 million financing pact from Cornell Capital Partners LP.

Among the company’s largest unsecured creditors is a firm controlled by founder Essam Khashoggi, who is owed $1.9 million. Khashoggi _ brother of Saudi Arabian arms dealer Adnan Khashoggi _ owns about 32 percent of the company, according to the firm’s most recent annual report.

EarthShell also owes bondholder SF Capital Partners $2.4 million.

EarthShell, which has lost money for years, posted a $6.2 million net loss in 2005, the last full year for which results are available, compared with a $7.3 million loss in 2004.

The company funded its operations with a combination of loans and debt. EarthShell shares, which trade over the counter, closed Friday at 21 cents each.

Founded in 1992, EarthShell’s clients include McDonald’s Corp., the U.S. Environmental Protection Agency and food service providers Aramark Corp. and Sodexho Inc.

Now that Earthshell is bankrupt, and is probably going to disappear soon, how will we track the sordid goings on of Essam Khasshoggi and Simon Hodson? I’m not sure, but knowing those two wacky rich-guys, they’ll be showing up soon with some new scam to perpetrate upon the public.

FlyDLUX: E. Khashoggi/Simon Hodson update… Earthshell cracking financially.

This via Kelly Carson of The Examiner:

EarthShell Corp., a publicly traded company on the Over the Counter Bulletin Board under the symbol ERTH, said in a release that it would be unable to meet its payroll and other financial obligations after Friday because of the funding shortfall.

“The company has not been able to secure the resources to complete our mission at this time,” company chairman and chief executive Vincent J. Truant said in a statement.

Data compiled by the financial research firm Morningstar shows that major shareholder Essam Khashoggi and E. Khashoggi Industries LLC began dumping blocks of shares in the company last month. Shareholder Lavla Khashoggi also sold blocks of EarthShell stock throughout November.

Essam Khashoggi, who is chairman of E. Khashoggi Industries LLC, resigned as chairman of EarthShell’s board of directors in July 2005. He held the position since the company was founded in November 1992.

The shareholders sold a combined portfolio of more than 65,000 shares at prices ranging from $1.55 per share to $1.33 per share. Late Friday, shares of EarthShell were trading on the OTCBB at 29 cents per share. Its 52-week high was $2.30 per share and its 52-week low was 23 cents per share.

Calls to Truant, chief financial officer D. Scott Houston and company spokeswoman Cindy Eikenberg were not returned.

EarthShell manufactures and markets paper products for the food-packaging industry. At the beginning of the year, the company had six employees.

In its reports to the Securities Exchange Commission, EarthShell said it is involved in litigation involving two equipment vendors seeking to collect about $600,000 for manufacturing equipment for the company’s facility in Goettingen, Germany.

The company also reported to the SEC this year that it has suffered “significant losses since inception, has minimal revenues and has a working capital deficit of $11,458,467″ at the end of last year.

Another one of Simon Hodson’s shell games coming to a close. What will that kooky millionaire do next?
–
/mark “rizzn” hopkins
For my blog, profile, wikipedia and digg entries, simply Google “rizzn”
Check out Season 1 of Podded Meat, my new Vodcast Network (SFW): http://poddedmeat.com
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Humpday Roundup

[rizzn's note: this entry contains paid placement]

Hey there Rizznites. What’s the good word? Still fielding suggestions for the new blogging network – The best one so far is 32D. We also added a new person to the blogging lineup. Just to preview who’s going to be writing for us, I’ll give you the list so far:

MADshow’s Newsguy Jon aka Jonboy – Armasystema: it’ll be a daily blog and periodic podcast continuation of his show Respect Knuckles.
Darrell – I Gave Darrell A Dollar: the latest incarnation of infectious insanity.
Wendy - Borrowed Fire: The daily life of a Texan twenty-something.
Matthew - GonzoBlogger: The globetrotting Jew tells all, Hunter S. Thompson-style.

Over the next few days, the splash pages will be up on the site, and I’ll have the next few names dropped here on the site. Look out for updates!

Places in Florida
I’ve been looking to get on the road and do some vacationing, so I’ve been getting information about travel out in Florida. One of the things that crossed my desk was this deal about Winter Park, and it was actually pitching me Winter Park Real Estate. I’ve actually driven through the area, and much like most of South Florida, it is like an endless suburb … it’s sort of in the middle of the state. Not sure exactly what the draw is to the place, other than its proximity to Orlando, but I know that there are a good deal of tourism agencies based out of there, and from what I understand quite a bit of money flowing through there for the average businessman. Back in the FlyDLUX days, a good number of our agents were out in that area.

I’ve also got some info on Orlando, as well, which I haven’t read through yet. More on that tomorrow.

On the Subject of Flash and Splash Pages
One of the companies I work with is having a huge internal debate on the topic of a splash page. The debate they are having is meritorious on both sides, but the debate itself is the developer’s attempt at a distraction from having to do real work. It’s reverse from most situations… usually it’s the developer pushing a splash page, but here it’s the client wanting one.

Coincidentally to this conflict, I saw this on Techdirt:

The common use of “flash intros” to corporate websites has never made much sense. Generally, they’re a pain, and even for the few folks who want to watch them, after seeing it once, why should they ever want to go back again? Yet, for some reason, web designers love them, and somehow keep convincing corporations to use them. However, a usability expert studying these things now says that ” the skip intro button is the most used button on the Internet.” While you can quibble over the hyperbole, it does make sense to question why so many firms keep using these types of entryways, when it clearly keeps people from the content they actually want — such as how to buy your product.

[via Techdirt]

Interestingly enough, I see this as one of the few design situations where a splash page is beneficial. We’re talking about a gaming site, and the site is going to be graphically and textually driven, so to entice people in and to spark imagination, images are going to play a big role. The designer in this case is saying that having a splash page is going to reduce the pagerank of the site overall. A way to breach this deficit in pagerank that a splash page can cause is including a blogstyle update on the page that changes periodically, so that weblogs.com and all the other ping services are aware of the site, and that it’ll get referenced periodically in other’s blogs.

Quote of the Entry:
[from a resignation letter my friend Charlene recently recieved] “I wish you continued success in your goals to turn vibrant, productive, dedicated employees into an aimless, inept group of dehydrated, lifeless carcasses.”
– Misti Gensler

Large Set of Small Updates

Quite an interesting day it’s been. I’ve been saving these blog posts to put into a long newspost for about a week or so. Good stuff in here. As for me, I’m keeping busy, and business is finally picking up again after a weeklong slump. Expect a project progress report later this week.

f o u r [ ] 2 n i t e
For those of you in the East Texas area thie evening, FourSquare behind IHOP. It’s the secret way to meet cool Tyler people. Starts at 9PM.

Suge Knight declares bankruptcy
Death Row Records label head Suge Knight has filed for bankruptcy, after he refused to pay US$107 million in an ownership dispute of his record company. Knight had lost a lawsuit filed by Lydia Harris last year. Harris had claimed that Knight had swindled her out of her 50 percent stake in Death Row Records.

Harris had alleged that Knight concocted a scheme to “destroy her ability to lay claim to her rightful share of the ownership and profits” of the label. The presiding judge had awarded the massive sum to Harris after discovering that Knight and his attorneys had not provided certain financial data.

Nanowires to Power Your Implants
Researchers at Georgia Tech have come up with a new way to power medical implants, using the motion of the body to generate electricity. By implanting fibers called nanowires, which are just 20-40 billionths of a meter in diameter, the researchers believe they can produce enough energy to drive implantable devices or even smart apparel. The zinc-oxide nanowires are piezoelectric, like the quartz crystals in a wristwatch, so the more you bend ‘em, the more energy they produce.

Adnan Khashoggi Sued by SEC
Our good buddy Adnan is in the news again. Boy we love those Krazy Khashoggi’s over here at Rizzn.Com. For those of you who don’t know, Adnan’s brother Essam was involved in the FlyDLUX ordeal back in 2003. Khashoggi is best known as an arms broker in the Iran- Contra scandal of the mid-1980s, when he served as middleman for illegal sales of weapons to Iran. He was often described then as one of the world’s richest men.

peace or something like that
My good buddy Rob is still out in Africa bringing good will to all mankind. He writes the following on his blog (of interest to those of you following his series on the Lords Resistance Army).

That’s the word for the moment, folks. Be good.

/rizzn