People are freaking out about 9E declaring bankruptcy. Whether these rumors are being stoked by penny stock daytraders or company men trying to elicit concessions, there are very sound legal reasons to assume the company will not declare any bankruptcy until May 25th, 2012, or later.

Disclaimer: I am not a lawyer. If you need legal advice, contact a licensed attorney. This is not to be constituted as legal advice.

When a corporation declares Chapter 11 or Chapter 7, the bankruptcy court (and especially the company's creditors) will immediately begin hunting for "avoidable transfers" and "fradulent transfers." The court will review any payments or agreements-to-pay made 90 days or less prior to the BK filing. For payment agreements with former company directors, this time period is extended to 1 year pre-bankruptcy filing.

Any payment agreements or payments made in the 90 day period prior to the BK filing (or 1 year period for former/current directors like Phil Trenary) are considered avoidable transfers. In the eyes of the law, these transfers are construed as giving the beneficiaries unfair priority over other creditors. As such, the judge voids these agreements, and any assets/cash paid will be seized as property of the bankruptcy estate/trustee.

What I'm highlighting here is that, if Pinnacle declares BK before May of next year, Phil's big fat consulting fee arrangement would very likely be considered an avoidable transfer to a former director in the year leading up to a BK filing.

I have a very strong feeling that Pinnacle will not declare BK until a year has passed since Phil's payment arrangement/golden parachute deal was signed. This, of course, assumes that Phil has not performed a Michael Jackson/Bank of America stunt and placed the monies in a Cook Islands Trust, held in the name of a Nevis LLC, held in the name of a Wyoming LLC.