Netcom Technologies, Inc.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
NETCOM TECHNOLOGIES, INC. : Case No. 03-32325PM
: Chapter 11
Debtor :
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MEMORANDUM OF DECISION
The court has before it the Debtor’s objection to Claims No. 73 and 74 filed by Estella M.
Lenis and Thomas L. Christison in the amounts of $114,889.70 and $61,879.47, respectively.
Both of these claims are based upon sale of corporate stock to the corporation, the balance of the
purchase price for which was unpaid at the time of the filing of this bankruptcy case. Under the
terms of the Debtor’s Restated Plan of Reorganization confirmed by Order of court entered April
7, 2005, all outstanding corporate stock of the Debtor was cancelled, other than stock owned by
the Debtor’s principal, Roy Rey.
Debtor’s objection, filed March 30, 2005, provided:
Claims 73 and 74
69. Claim 73 was filed by Estella Lenis in the amount of $114,889.70 as a
secured Claim.
70. Debtor believes this Claim is based upon a stock purchase agreement
between Debtor and claimant by which Debtor was repurchasing stock in Debtor.
71. All stock interests in Debtor were extinguished under its Plan as
confirmed by this Court and shareholders were to receive no distributions. All
executory contracts not specifically assumed were rejected under the Plan.
72. Claim 74 was filed by Thomas L. Christison in the Amount of
$61,879.47 as a secured claim.
73. Debtor believes this Claim is based upon a stock purchase agreement
between Debtor and claimant by which Debtor was repurchasing stock in Debtor.
Date signed December 21, 2005
Entered: December 22, 2005 Case 03-32325 Doc 468 Filed 12/22/05 Page 1 of 2

74. All stock interests in Debtor were extinguished under its Plan as
confirmed by this Court and shareholders were to receive no distributions. All
executory contracts not specifically assumed were rejected under the Plan.
75. These Claims (73 and 74) were not secured as Wachovia Bank had a
first priority secured position which, at the time of Debtor’s bankruptcy filing,
made any other liens unsecured by Debtor’s assets.
76. Debtor believes that for the foregoing reasons Claims 73 and 74
should be expunged.
On September 16, 2005, the court entered an Order on the Debtor’s Omnibus Objection
to Claims sustaining Debtor’s objection to the claims other than these two. The court requested a
memorandum to support the objection. A Supplemental Memorandum was filed September 23,
2005. The facts are not disputed. Under the January 4, 2002, Buyout Agreement the securities to
be transferred by Lenis and Christison were placed in the hands of a third-party escrow agent
with the shares to be released from time to time according to the schedule appearing in paragraph
1.B. of the Buyout Agreement. Under paragraph 4.B of each of the Agreements the sellers were
to execute covenants not to compete. The court has no reason to believe that such covenants not
to compete were not delivered at the time of the closing.
While in the absence of any action by the Debtor a pre-filing lien “rides through”
unaffected, here the Plan expressly provided for the treatment of the stock that was the subject of
the secured claim, that is, it cancelled the stock, nullifying all rights of ownership. That does not
destroy the underlying claim, the parties acknowledging that the security is worthless. The court
will therefore enter and order overruling the objection to the Claims.
cc:
Linda D. Regenhardt, Esq.
Harlan L. Weiss, Esq.
Estella M. Lenis
Thomas L. Christison
Robert H. Rosenbaum, Esq.
Garry R. Greenblatt, Esq.
James M. Greenan, Esq.
Ryan D. Sullivan, Esq.
Mark W. Bailey, Jr., Esq.
Christopher C. Fogelman, Esq.
Michael Gallerizzo, Esq.
United States Trustee
Aetna U.S. Healthcare
Jennifer Hollenberg, National Collections
End of Memorandum
Case 03-32325 Doc 468 Filed 12/22/05 Page 2 of 2