Question-and-Answer Session
Operator
(Operator Instructions). And your first question comes from [David Erlac] from [Carrelage Advisors]. Your line is open sir.
Unidentified Analyst
Yes, I was wondering about the status of the Paolino lawsuit and the effects that it would have on the company in terms of costs, whether it's reserves there (inaudible).that the result is not positive for the company. Could you say something about that please?
Bob Kramer
I don't believe there are any reserves for the litigation that accountants and Greg Krezmien, the CFO have studied this carefully and under the appropriate accounting principles, we don't feel at this point reserves are appropriate. David is there a further question.
Unidentified Analyst
I was just wondering I guess there was Mr. Paolino. He has some claims against the company, so those claims you are saying there is no reserves for in the event that?
Bob Kramer
Well principally there is two as you know and as disclosed in our public report, there are two ongoing litigations, there was also an inquiry made by the branch of the SEC concerning the disclosure, surrounding the situation, company did supply documents and the SEC was satisfied with the company's disclosure.
So there remains whistleblower action, and as we stated in the most recent filing, the Secretary of Labor it's initial determination was that they were the company against Mr. Paolino. Mr. Paolino has appeal that decision on and this is right under the law which set it before an administrative law judge.
Mr. Paolino has filed request that the hearing that was set for the later part of January '09 be stayed and not brought to a hearing. The company is opposing that motion and are seeking to bring that to a hearing and the company though there is no guarantees in litigation, the company is very optimistic that it can prevail on the action.
Unidentified Analyst
And one final question on that point, and then I have a (inaudible).
Bob Kramer
Sure. I was going to discuss the arbitration next, but please ask your question.
Unidentified Analyst
Well, one thing I was confused about. There was I guess an allegation that there was $500,000 either misappropriated or misused, I wasn’t quite sure. Could you explain what happened with respect to the 500,000 odd numbers, or what is alleged to have occurred?
Bob Kramer
I’m not sure I understand the question David. The whistleblower complaint is mainly centered about a complaint by Mr. Paolino that under the Sarbanes-Oxley Act that he complained of a wrongdoing on the Corporation’s part and the Corporation then retaliated by firing him. The initial fact finding was that the Corporation that he had not engaged in a protected act and there was no retaliation, and that the Corporation had good independent reasons for terminating him.
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