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Flooz.Com Files Bankruptcy

Posted by Keith Elder | Posted in Internet | Posted on 18-10-2001

I received an email today that the online company Flooz.Com has filed for bankruptcy as of August 31st, 2001. The email didn’t state whether or not they are completely shutting down but that is usually the case when members or subscribers get this type of alert. Read more for the details. Below is a copy of the email I received. If you are not familiar with Flooz.com they are what I call a “Gift Certficicate” shop. Basically the idea is that you go to there site, buy some “Flooz” and then they would email the recipient for you. That person could then go to multiple shops and spend the money. Not a bad idea, but evidently they didn’t spend enough money on actually finding a way to charge for the service. I use to use Flooz.com quite often for birthdays and other occasions, I guess I will have to actually go to the store from now on.

From: “Flooz.com” To: members@flooz.com Subject: Important Bankruptcy Notices Regarding Flooz.com, Inc. On August 31, 2001, Flooz.com, Inc. (the “Debtor”) filed a voluntary petition for relief under Chapter 7 of the United States Bankruptcy Code with the Clerk of the United States Bankruptcy Court for the Southern District of New York (Case No. 01 B 14833 (REG). You may be a creditor of the Debtor. On August 31, 2001, Hal M. Hirsch (the “Trustee”) was appointed as interim Chapter 7 Trustee. At this time, there does not appear to be any property available to the Trustee to pay creditors. You therefore should not file a proof of claim at this time. If it later appears that assets are available to pay creditors, you will be sent another notice telling you that you may file a proof of claim, and telling you the deadline for filing your proof of claim. The United States Trustee has scheduled a Section 341(a) Meeting of Creditors for December 5, 2001, at 11:00 a.m. at 80 Broad Street, 2nd Floor, New York, New York 10004. Although you may attend, you are not required to do so and your claim, if any, will not be affected if you do not appear. If you want any other information concerning the Debtor’s bankruptcy case or if you would like to obtain a copy of the Court’s official notice, you may visit the Court’s official website located at www.nysb.uscourts.gov. This notice is available without a login and password. ———————————————————————– HARRIS BEACH LLP Attorneys for Hal M. Hirsch, Hearing Date: November 20, 2001 Chapter 7 Trustee 11:00 a.m. One Penn Plaza New York, New York 10119 (212) 736-3636 Hal M. Hirsch (HMH/0417) Eric H. Lindenman (EHL/5106) UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK ——————————————————-x In re: Chapter 7 FLOOZ.COM, INC., Case No. 01 B 14833 (REG) Debtor. ——————————————————-x NOTICE OF MOTION OF TRUSTEE FOR AN ORDER PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 9019 COMPROMISING CLAIMS OF AND AGAINST ROBERT LEVITAN, PETER TAKIFF, AND ANN GRIFFIN, AND DELINEATING OBLIGATIONS OF, AND COMPENSATION TO, LEVITAN, TAKIFF AND GRIFFIN IN CONNECTION WITH THEIR ASSISTANCE IN THE MARKETING AND SALE OF CERTAIN OF THE DEBTOR’S ASSETS AND RELATED RELIEF ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ PLEASE TAKE NOTICE, that Hal M. Hirsch (the “Trustee”), the Chapter 7 Trustee of the estate of Flooz.com, Inc. (the “Debtor”), by his undersigned attorneys, Harris Beach LLP, shall move this Court, before the Honorable Robert E. Gerber, United States Bankruptcy Judge, at the Courthouse, Room 628, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004-1408, on November 20, 2001, at 11:00 o’clock in the fore noon of that day, or as soon thereafter as counsel may be heard, for an Order, pursuant to Federal Rule of Bankruptcy Procedure 9019, authorizing the Trustee to settle and compromise claims of and against Robert Levitan (“Levitan”), Peter Takiff (“Takiff”), and Ann Griffin (“Griffin”) whereby, in exchange for certain consideration given by Levitan, Takiff, and Griffin to the Trustee, including the aid to and participation with the Trustee in the marketing and sale of certain of the Debtor’s assets and the waiver of their priority and unsecured compensation claims against the estate, the Trustee has agreed to provide certain payments to, and release of claims against, Levitan, Takiff, and Griffin. PLEASE TAKE FURTHER NOTICE, that Levitan, Takiff, and Griffin have agreed to render aid and assistance to the Trustee in the Trustee’s efforts to market and sell the Debtor’s brand name, intellectual property, customer list, and the goodwill associated therewith (collectively, the “Assets”), and that such aid and assistance is expected to substantially increase the value to be obtained on behalf of the estate. Absent such aid and assistance, the Trustee does not believe that the maximum value of the Assets will be attained. In particular, Levitan, Takiff, and Griffin shall provide the following, non-exclusive assistance: (i) identify potential asset acquirors; (ii) prepare a summary of assets to be sold, including the preparation of appropriate solicitation letters; (iii) contact potential acquirors and market the Debtor’s assets to such prospects; (iv) appropriate follow-up with respect to the foregoing; (v) create a formal process for soliciting and receiving offers from potential acquirors; (vi) provide detailed information with respect to assets to potential acquirors; (vii) assist the Trustee in the negotiation of the sale of such assets; (viii) assist the Trustee and potential acquirors in the due diligence process; and (ix) assist the Trustee in the valuation of the assets and the value of the offers made to purchase the assets. Levitan, Takiff, and Griffin will also waive their priority and unsecured compensation claims against the estate. Levitan holds an aggregate claim of $27,500.00, Takiff holds an aggregate claim of $40,417.00, while Griffin holds a claim of $4,231.00. As part of this agreement and in addition to rendering the foregoing affirmative aid and assistance, they will waive such claims against the estate. PLEASE TAKE FURTHER NOTICE, that in exchange for the foregoing aid and assistance of Levitan, Takiff, and Griffin, and the waiver of their claims, the Trustee has agreed to provide payment thereto pursuant to the following formula: (i) Payment of $20,000.00 if a sale approved by the Trustee and formally approved by the Court and such sale provides for payment, in whole or in part, in cash; (ii) Payment of additional compensation, consisting of the greater of: (a) $30,000.00 provided that at least $2,500,000.00 in debt is eliminated, or (b) if, after elimination of liabilities as a result of Levitan, Takiff, and Griffin’s efforts, there is a cash distribution to unsecured creditors, then Levitan, Takiff, and Griffin shall receive fifty percent (50%) of the increase in the net cash distribution to unsecured creditors, on a percentage basis; and (iii) Reimbursement of expenses reasonably and necessarily incurred in connection with the foregoing services, estimated not to exceed $5,000.00*. Additionally, the Trustee shall not seek to recover the following pre-petition payments made to Levitan, Takiff, and Griffin: (i) with respect to Levitan, $33,653.85 in order to continue his employment as president of the Debtor and to continue his efforts to reorganize and, thereafter, assist in the preparation for a bankruptcy filing, $17,213.01 in reimbursement for expenses of the Debtor paid by him; and the purchase of two (2) laptop computers from the Debtor for $950.00; (ii) with respect to Takiff, the forgiveness of $100,000.00 in loans by the Debtor in exchange for his agreement to reduce contractual severance from $195,000 to $16,250.00 as well as Takiff’s agreement not to seek employment elsewhere until September 2001; with the $16,250.00 never having been paid but instead incorporated into Takiff’s “Stay-On Agreement” which provided for payment to Takiff of $52,500.00, required Takiff to remain as Chief Financial Officer and assist in the Debtor’s attempts to sell assets and, thereafter, to aid in the administration of the Debtor’s case, and the purchase from the Debtor two (2) laptop computers and a printer for an aggregate amount of $1,350.00; (iii) with respect to Griffin, $36,794.54 pursuant to the August 22, 2001 “Stay-On Agreement” to remain as controller of the Debtor and to assist in the Debtor’s attempts to effect a sale of its assets and, upon such failure, to aid in the preparation for the bankruptcy filing, and the purchase of two (2) laptop computers and printer for a total of $800.00. PLEASE TAKE FURTHER NOTICE, that the Trustee shall also execute and deliver a release to each of Levitan, Takiff, and Griffin as to their individual liability for their actions as directors and officers of the Debtor, but that such releases shall not extend to or cover any liability that may be recoverable against Flooz’s directors and officer’s liability insurance policy. PLEASE TAKE FURTHER NOTICE, that, pursuant to the Order of the Court dated October 1, 2001, service of this notice is being made upon the approximately 325,000 individuals that are holders of flooz dollars by electronic means. Service upon all other creditors and parties-in-interest of the estate is being made by conventional mail notice. PLEASE TAKE FURTHER NOTICE, that objections, if any, to the relief sought in the Motion, must be made in writing, must state with particularity the basis for the objection, and must be delivered to Chambers, with a copy served upon: (i) the undersigned counsel for the Trustee, (ii) the United States Trustee, 33 Whitehall Street, 21st Floor, New York, New York 10004, Attn: Tracy Hope Davis, Esq.; and (iii) Baer, Marks & Upham, LLP, 805 Third Avenue, New York, New York 10022, Attn: Jay Gottlieb, Esq., not less than three (3) days prior to the hearing date. PLEASE TAKE FURTHER NOTICE, that the Notice, the Application, and the proposed Order are on file with the Clerk of the Court, together with all other documents filed in this case, and may be viewed and downloaded, for a fee, by accessing the Court’s official website, www.nysb.uscourts.gov. Dated: New York, New York October 18, 2001 HARRIS BEACH LLP Attorneys for Hal M. Hirsch, Chapter 7 Trustee By: s/ Eric H. Lindeman ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Eric H. Lindenman (EHL/5106) One Penn Plaza New York, New York 10119 (212) 736-3636 * Levitan, Takiff, and Griffin estimate that such costs will include approximately $1,000.00 for mailings, $500.00 for secretarial services, as well as additional costs for computer-related expenses telephone and cell phone reimbursement. Levitan, Takiff, and Griffin estimate that such expenses shall not exceed $5,000.00.

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