d. James N. Turek, president and sole director of Plasticon, issued to himself as compensation 3,603,771,000 shares of common stock of Plasticon with a market value of $14,846,168 on the date of issue;
e. During the fourth quarter of 2006 Plasticon identified $720,000 in debt that was incurred in 2005. Proceeds from the borrowings were deposited with LexReal Co., LLC, which is owned by James N. Turek. The loan proceeds due to Plasticon were offset against amounts owed to LexReal on Plasticon’s books at the loans were incurred in 2005, but the loans themselves were not recorded on Plasticon’s books. The loans were subsequently called requiring Plasticon to provide 270,296,888 of common shares in satisfaction of the notes.
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Plasticon’s Post-Petition Conduct
d. Plasticon has borrowed money post-petition without authorization of the court. The cash receipts log provided by Plasticon reveals that $102,332.90 has been loaned to the Debtor by James Turek and LexReal Co., LLC;
e. Many of the LexReal loans (Exhibit 7) contain oppressive terms that cannot be justified by any valid business purpose. The loans are all convertible into Plasticon common stock at a rate of $0.0001 per share. In addition to carrying a 10% interest rate, many of the notes require an upfront closing fee of 100% of the loan amount payable in Plasticon common stock again using a rate of $0.0001 per share. Some of the notes even contain a default interest rate of 20% daily.
09/14/2007 215 AFFIDAVIT of John Todd Wright, filed by U.S. Trustee (RE: related document(s)156 Motion to Appoint Trustee,, filed by U.S. Trustee U.S. Trustee). (Daugherty, John) (Entered: 09/14/2007)
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