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[QUOTE]Originally posted by lilhen2005: [QB] I don't know about this, could go file chapter 11 according to the Nov 25 8K. I would waiy lower, and then watch for news,JMHO. Form 8-K for MED GEN INC -------------------------------------------------------------------------------- 25-Nov-2005 Triggering Events of Financial Obligation Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement On November 22, 2005 the Company received an adverse ruling in the previously settled matter: Global Healthcare Labs, Inc. et. al. versus Med Gen Inc. et al. The facts are as follows: On August 6th 2004, after a jury trial, a verdict was entered in favor of Global Healthcare against the Company on a breach of contract claim, with damages of $2,235,783 dollars. On August 24th, 2004 the District Court entered a final judgment in the sum of $2,489,418.19 with interest of 7% per year. On January 10th, 2005, the parties filed a joint notice of stipulation of settlement based upon a December 3rd, 2004 agreement and the Court retained jurisdiction over the Settlement Agreement. The Settlement Agreement required the Company to make timely payments of $200,000 dollars over a five month period and register 8,000,000 common shares of stock. On February 10th, 2005 Global unilaterally disaffirmed the Settlement Agreement. The Company filed a motion to enforce the provisions of the agreement in March 2005. The uncontroverted facts are as follows: The Company made the first payment on time, the second payment was two days late and the third payment was 7 days late (of which four days were due to a UPS delivery problem). The fourth payment was made 13 days late as the Company was undergoing severe cash flow problems at the time and the check was delivered only after Mr. Mitchell, the President borrowed the necessary funds on a home-equity loan to cover the amount. The Company also tendered the final future payment at that time in advance of the payment schedule. The stock was registered on August 12th, 2005 and the plaintiff's orally rejected delivery. The Court ruled that because the settlement contract had a "time is of the essence clause" the untimely payments made by the Company allow Global Healthcare to disaffirm the agreement. The Court ruled that Enriquillo Export & Import Inc v. M.B.R.Industries Inc. applies and the Company's 13 day late tender was not adequate performance {Enriquillo had a 58 day delay}. Furthermore, the Court ruled that the $75,000 dollars of payments cashed by Global and tendered by the Company under the original settlement agreement shall not be returned but rather applied to the judgment. The Company has ten days to file written objections to the original trial judge or be barred from an appeal to this adverse ruling. At present the Company has retained the firm of Furr & Cohen Esq.'s. and notified its lender, whose outside counsel is working closely with the Company's counsel to reach a new settlement with the judgment creditor. The parties have orally agreed to a standstill agreement while they exhaust all possible remedies in the instant matter. In the event a new accord is not reached within a few weeks, the Company will be required to file a Chapter 11 bankruptcy petition. The Company has 5,788,777 shares issued and outstanding and approximately 1022 shareholders of record. Management will explore and exhaust all options and remedies before filing any petition for reorganization. [/QB][/QUOTE]
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