Paintball, Inc was founded in 1989 (As National Paintball, Inc) to service the retail storefronts that comprise the majority of the marketing power within the paintball industry. In 2001, company reached an agreement with Mantua, NJ based National Paintball, Inc (and to settle litigation that was pending regarding that issue) to change its name to Paintball, Inc to end any confusion caused by the existence of two companies named "National Paintball, Inc.". William R. Fairbanks is the President of Paintball, Inc. Paintball, Inc is based in Greenville, SC and has distribution centers in Dallas, TX and Paramount, CA. They claim to be able to service 90% of their customer's orders within two days. Paintball, Inc is in turn owned by American Sports Development Group, also based in South Carolina, and ASDG also owns American Inflatables, Specialty Insurance Services, and Warrior Sports Gear. ASDG is a publicly traded company, thus they report their earnings and liabilities with the Securities and Exchange Commission (SEC)
In March of 2003 ASDG, the parent company of Paintball, Inc. decided to close the Texas distribution center, causing rumor to spread that perhaps Paintball, Inc was in financial trouble, and was looking to reduce their liabilities and costs. The SEC report filed March 31st, 2003 indicates that Paintball, Inc lost approximately 1.9 Million dollars for the year ending 12/31/2002, and first quarter losses in 2003 had reached approximately 529,000 dollars, and an outstanding promissory note (loan) coming due on April 30th, 2003 from South Trust bank for 1.4 million dollars. The bank had informed the company that it would not be renewing the loan, and would expect payment in full. This led the auditors to raise concerns that Paintball, Inc would be unable to continue as a business due to lack of operating funds.
On June 23rd, 2002 Paintball, Inc filed suit against The Sports Authority, Inc which is a retail sporting goods chain alleging that they
i) Conspired with certain people to order paintball markers from Paintball, Inc., then falsely claim they were defective in an attempt to avoid paying for them, then turn around and sell them anyways.
ii)Engaged in unfair trade practices that are in conflict with South Carolina trade law that damaged and continue to damage Paintall, Inc's interests
iii)Converted (legal term for stealing, or selling fraudulently) Paintball, Inc's property.
The lawsuit seeks to get actual damages in excess of $1,000,000.00, with additional damages for 3 times that amount, and associated punitive, consequential damages and legal fees. As of the writing of this article, the suit was still in its early stages.
Further compounding Paintball, Inc's troubles was a lawsuit filed by Larry Cossio of Warrior Sports Gear and Specialty Insurance Services. In Mr. Cossio's suit he alleges:
i) Paintball failed to pay notes in the aggregate principal amount of $179,499 when due that were issued as part of the purchase price Paintball paid to acquire Mr. Cossio's business in July 2001
ii) Paintball consummated the business combination with Inflatables knowing it would have a material adverse effect on Paintball
iii) Mr. Fairbanks fraudulently induced Mr. Cossio and his wife with material misrepresentations to accept 897,495 shares of the Company's common stock in satisfaction of the principal amounts on the notes and failed to convey the stock so purchased
iv) Mr. Fairbanks has diverted over $1.3 million in funds from the Company to Genesis Racing (a company majority-owned and controlled by Mr. Fairbanks that races automobiles and for which Mr. Fairbanks is a race car driver) for Mr. Fairbanks' personal benefit.
v) The Defendants have failed to pay Mr. Cossio a bonus earned under his employment agreement with the Company.
The SEC filing indicates that on March 11th, Mr. Cossio tried and failed to get a restraining order against Paintball, Inc to restrain the company from selling any substantial asset of Paintball, Inc except in the normal course of business. The suit is ongoing, and time will tell if Mr. Cossio's allegations are true. As of the March 31st report, ASDG felt that Mr. Cossio's allegations were without merit.
In April of 2003 the Paintball Insider reported that Paintball, Inc was in the process of being sold to Camden Holdings, a Nevada corporation. According to SEC filings shown on the SEC website, ASDG executed an agreement with Camden Holdings to sell all the assets of Paintball, Inc. to Camden Holdings. The same filing also indicates that on June 5th, ASDG's board of directors voted to terminate the agreement to sell Paintball, Inc. to Camden Holdings. No reason is stated for this apparent turnaround.
During the course of this year's International Amateur Open, rumor circulated that Paintball, Inc had filed for Bankruptcy. In an SEC filing dated July 16th, ASDG informed the SEC that it had in fact filed for reorganization under Chapter 11 of the Federal Bankruptcy Act, stating that this action was prompted by the inability of ASDG to renegotiate its loan with SouthTrust Bank or to find an alternate form of financing. The Bankruptcy filing indicates that it was filed on July 17th, 2003 and Paintball, Inc's 20 largest creditors include:
AT&T- $78,537.47
Brass Eagle-$66,596.51
Catalina Cylinders-$72,509.77
Dority & Manning, PA-$43,184.95
Abrams and Company-$24,585.45
CFW Enterprises-$30,494.07
William Fairbanks-$97,000
Genesis Trading Corp-$225,475
Irving Independant School District (Texas)-$16,434.73
Matthew Brown-$150,000
Nelson Technologies-$482,909.03
Power Paintball Products, Inc-$51,937.14
Procaps-$88,388
State of California-$65,435.89
Technicaps USA, Inc.-$203,627.59
Tippmann Pneumatics-$520,000
WDP-$131,840
WS & Associates-$67,199.34
Wyche, Burgess, Freeman & Parham-$52,950.36
ZAP Paintball, Inc-$720,925
An attempt was made to contact several companies in regards to the Chapter 11 Bankruptcy filing that Paintball, Inc has instituted, but none were willing to comment on this issue. That's a typical answer, as it's not wise to comment on a pending legal matter. Chapter 11 Reorganizations can take years, and currently, Paintball, Inc continues in operation. How long Paintball, Inc will stay in business is an open question.
http://www.sec.gov/Archives/edgar/data/1073874/000094344003000414/0000943440-03-000414.txt
http://www.sec.gov/Archives/edgar/data/1073874/000109000203000122/0001090002-03-000122.txt
In March of 2003 ASDG, the parent company of Paintball, Inc. decided to close the Texas distribution center, causing rumor to spread that perhaps Paintball, Inc was in financial trouble, and was looking to reduce their liabilities and costs. The SEC report filed March 31st, 2003 indicates that Paintball, Inc lost approximately 1.9 Million dollars for the year ending 12/31/2002, and first quarter losses in 2003 had reached approximately 529,000 dollars, and an outstanding promissory note (loan) coming due on April 30th, 2003 from South Trust bank for 1.4 million dollars. The bank had informed the company that it would not be renewing the loan, and would expect payment in full. This led the auditors to raise concerns that Paintball, Inc would be unable to continue as a business due to lack of operating funds.
On June 23rd, 2002 Paintball, Inc filed suit against The Sports Authority, Inc which is a retail sporting goods chain alleging that they
i) Conspired with certain people to order paintball markers from Paintball, Inc., then falsely claim they were defective in an attempt to avoid paying for them, then turn around and sell them anyways.
ii)Engaged in unfair trade practices that are in conflict with South Carolina trade law that damaged and continue to damage Paintall, Inc's interests
iii)Converted (legal term for stealing, or selling fraudulently) Paintball, Inc's property.
The lawsuit seeks to get actual damages in excess of $1,000,000.00, with additional damages for 3 times that amount, and associated punitive, consequential damages and legal fees. As of the writing of this article, the suit was still in its early stages.
Further compounding Paintball, Inc's troubles was a lawsuit filed by Larry Cossio of Warrior Sports Gear and Specialty Insurance Services. In Mr. Cossio's suit he alleges:
i) Paintball failed to pay notes in the aggregate principal amount of $179,499 when due that were issued as part of the purchase price Paintball paid to acquire Mr. Cossio's business in July 2001
ii) Paintball consummated the business combination with Inflatables knowing it would have a material adverse effect on Paintball
iii) Mr. Fairbanks fraudulently induced Mr. Cossio and his wife with material misrepresentations to accept 897,495 shares of the Company's common stock in satisfaction of the principal amounts on the notes and failed to convey the stock so purchased
iv) Mr. Fairbanks has diverted over $1.3 million in funds from the Company to Genesis Racing (a company majority-owned and controlled by Mr. Fairbanks that races automobiles and for which Mr. Fairbanks is a race car driver) for Mr. Fairbanks' personal benefit.
v) The Defendants have failed to pay Mr. Cossio a bonus earned under his employment agreement with the Company.
The SEC filing indicates that on March 11th, Mr. Cossio tried and failed to get a restraining order against Paintball, Inc to restrain the company from selling any substantial asset of Paintball, Inc except in the normal course of business. The suit is ongoing, and time will tell if Mr. Cossio's allegations are true. As of the March 31st report, ASDG felt that Mr. Cossio's allegations were without merit.
In April of 2003 the Paintball Insider reported that Paintball, Inc was in the process of being sold to Camden Holdings, a Nevada corporation. According to SEC filings shown on the SEC website, ASDG executed an agreement with Camden Holdings to sell all the assets of Paintball, Inc. to Camden Holdings. The same filing also indicates that on June 5th, ASDG's board of directors voted to terminate the agreement to sell Paintball, Inc. to Camden Holdings. No reason is stated for this apparent turnaround.
During the course of this year's International Amateur Open, rumor circulated that Paintball, Inc had filed for Bankruptcy. In an SEC filing dated July 16th, ASDG informed the SEC that it had in fact filed for reorganization under Chapter 11 of the Federal Bankruptcy Act, stating that this action was prompted by the inability of ASDG to renegotiate its loan with SouthTrust Bank or to find an alternate form of financing. The Bankruptcy filing indicates that it was filed on July 17th, 2003 and Paintball, Inc's 20 largest creditors include:
AT&T- $78,537.47
Brass Eagle-$66,596.51
Catalina Cylinders-$72,509.77
Dority & Manning, PA-$43,184.95
Abrams and Company-$24,585.45
CFW Enterprises-$30,494.07
William Fairbanks-$97,000
Genesis Trading Corp-$225,475
Irving Independant School District (Texas)-$16,434.73
Matthew Brown-$150,000
Nelson Technologies-$482,909.03
Power Paintball Products, Inc-$51,937.14
Procaps-$88,388
State of California-$65,435.89
Technicaps USA, Inc.-$203,627.59
Tippmann Pneumatics-$520,000
WDP-$131,840
WS & Associates-$67,199.34
Wyche, Burgess, Freeman & Parham-$52,950.36
ZAP Paintball, Inc-$720,925
An attempt was made to contact several companies in regards to the Chapter 11 Bankruptcy filing that Paintball, Inc has instituted, but none were willing to comment on this issue. That's a typical answer, as it's not wise to comment on a pending legal matter. Chapter 11 Reorganizations can take years, and currently, Paintball, Inc continues in operation. How long Paintball, Inc will stay in business is an open question.
http://www.sec.gov/Archives/edgar/data/1073874/000094344003000414/0000943440-03-000414.txt
http://www.sec.gov/Archives/edgar/data/1073874/000109000203000122/0001090002-03-000122.txt
