To: scion who wrote (10980 ) 8/15/2007 8:24:38 AM From: scion Respond to 8. Plasticon’s financial performance was further hampered by the diversion of funds to Turek-controlled 2 These proceeds, however, were diverted to LexReal Co. LLC (“LexReal”). Exhibit 2 at F-17. LexReal is a Kentucky Limited Liability Company owned by Turek. Id. While LexReal later purportedly provided services to Plasticon to reduce the amount owed, Id., the diversion is still highly suspect. “During the fourth quarter 2006, the Company identified $720,000 in term debt that was incurred in 2005. Proceeds from the borrowings were deposited with LexReal. The loans were booked and offset against amounts owed to LexReal, with no increase in debt. The loans have been called, requiring the Company to provide 270,296,888 of common shares in satisfaction of the notes. On October 29, 2006, the shares were issued at a cost of $162,178. The Company is in the process of determining the impact on 2005 financial statements and will make the necessary entries in completing the accounting for 2006.” Exhibit 3 at F-16.on May 14, 2007, two days before Plasticon and Pro-Mold filed their petitions, Pro-Mold wired $100,000 to LexReal. Pro Mold, Inc., Cash Receipts and Disbursements Ledger, attached hereto and incorporated herein as Exhibit 4.
