Case Document 193 Filed in TXSB on 07/07/12 Page 1 of 6

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1 Case Document 193 Filed in TXSB on 07/07/12 Page 1 of 6 IN THE UNITED STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION IN RE: TAXMASTERS, INC. CASE NO H2 Debtor (Chapter 7) To the Honorable David R. Jones, United States Bankruptcy Judge: TRUSTEE S FOURTH STATUS REPORT 1. In preparation for completing the Debtor s removal from the leased premises at Town & Country (the T&C Property ), the Trustee sought and received court authority to sell two categories of items. The first was the Appliances and Property detailed in Doc. No. 183, and the second was the Cartridges detailed in Doc. No The Trustee received court authority to sell both [See Doc. Nos. 185 and 188]. 2. The Trustee has completed the authorized sale of the Cartridges to Cartridge World Dunvale. All relevant stock has been removed from the T&C Property, and the Trustee has received payment. 3. The sale of the Appliances and Property did not go through. The Trustee files this Fourth Status Report, in large part, to provide a detail of today s events. 4. Prior to filing his motion regarding the sale of the Appliances and Property, the Trustee s counsel met, on two occasions, with Anthony Welch ( Welch ), regarding his desire to purchase certain property. As a follow up to one of those meetings, Trustee s counsel sent an to reiterate certain terms and to explain how the parties would move forward related to the potential sale. In this (which is attached hereto as Exhibit A and is incorporated herein 1

2 Case Document 193 Filed in TXSB on 07/07/12 Page 2 of 6 for all purposes), Trustee s counsel specifically stated that the relevant property was to be removed on Saturday, July 7, 2012, and the movers were to bring supplies to protect the building s slate floor/elevators. Furthermore, Trustee s counsel stated that the purchase price would need to be tendered prior to the move of any of the property. 5. Subsequent to filing the motion to sell and subsequent to receiving court authority to move forward with the sale, Trustee s counsel again ed Welch informing him that court approval had been secured. Trustee s counsel reiterated the need that his movers have appropriate insurance and protective equipment/supplies. A copy of this is attached hereto as Exhibit B and is incorporated herein for all purposes. 6. Shortly after the second , Trustee s counsel sent a third to Welch which provided the address for the building manager of the T&C Property. Trustee s counsel instructed Welch that proof of insurance needed to be sent to her. Trustee s counsel requested that she be cc d. A copy of this is attached hereto as Exhibit C and is incorporated herein for all purposes. 7. Welch responded to both of these s with one word replies OK. Copies of his responses are attached hereto as Exhibit D and are incorporated herein for all purposes. 8. Friday night, when Trustee s counsel had not heard from either Welch or his movers related to the proof of insurance, Trustee s counsel again ed Welch and requested that he confirm that the movers had provided their insurance information to building management. A copy of this is attached hereto as Exhibit E and is incorporated herein for all purposes. 9. Welch failed to respond to the request of Trustee s counsel. Instead, on Saturday morning, at 8:56 A.M., he ed Trustee s counsel to let her know that something had come 2

3 Case Document 193 Filed in TXSB on 07/07/12 Page 3 of 6 up, he needed to go to Austin, and the move would need to be rescheduled. At 9:00 A.M., Trustee s counsel responded indicating that the purchase was contingent upon removal occurring today, and that Welch could still send his movers. At 9:18 A.M., after hearing nothing back from Welch, Trustee s counsel again ed Welch informing him that if the property was not removed today, she would inform the court that he had breached the agreement and no sale would occur. Copies of these s are attached hereto as Exhibit F and are incorporated herein for all purposes. 10. At 9:42 A.M., Welch ed Trustee s counsel stating that the movers would be at the T&C Property. Trustee s counsel responded by asking if they had sent their insurance information. A copy of this exchange is attached as Exhibit G and are incorporated herein for all purposes. 11. Shortly after noon, Trustee s counsel called Welch to confirm that insurance information had been provided to building management. Trustee s counsel was instructed to call a third party who would be handling the move a woman by the name of Charlotte. Trustee s counsel called Charlotte, and Charlotte assured Trustee s counsel that the movers would be at the T&C property at 2:00 P.M., and that she would have the appropriate insurance documentation in addition to the appropriate equipment/supplies needed to protect the floors and elevators. Trustee s counsel left for the T&C Property at approximately 12:55 P.M., in order to be on location for the move by 1:30 P.M. At 1:03 P.M., Welch called Trustee s counsel. Welch informed Trustee s counsel that he had supposedly cancelled his original movers that morning after realizing he needed to go to Austin. Then, when he tried to reschedule them, they were unavailable, so he had to get new movers at the last minute. Because he had to get movers at the last minute, they were already out working, and they were not carrying their insurance 3

4 Case Document 193 Filed in TXSB on 07/07/12 Page 4 of 6 information with them. Because of that, the new movers would not be able to provide the appropriate insurance documentation prior to the move. At this point, Trustee s counsel asked Welch, Are you lying to me? 12. Welch s response was especially emphatic not with regard to the fact that he was telling the truth, but rather, with regard to his assertions that Trustee s counsel was a racist, was treating Welch as though he were from the ghetto, and that she would never be acting this way with a white man. (Welch is African-American.) Welch also told Trustee s counsel that [he] could create real problems for [her]. Trustee s counsel responded by asking Welch if he was threatening her. Needless to say, communication broke down at that point. Prior to ending the phone conversation, Trustee s counsel did state that what she wanted was for the move to occur at 2:00, for the movers to be insured, and for the movers to have the appropriate equipment/supplies. Welch stated that he would call Trustee s counsel back. At 1:14 P.M., Welch called Trustee s counsel back and informed her that the move would occur on Monday. Trustee s counsel stated, No, it will not, and hung up. Welch called Trustee s counsel two more times after that call; however, Trustee s counsel did not answer. Welch later sent two text messages to Trustee s counsel. The first read, We can still savage [sic] this deal, its [sic] up to you. The second read, If you go through with the deal I can bring the cashier [sic] check to your office Monday. In between receiving the two text messages, Trustee s counsel called the Trustee to report the above-detailed events. The Trustee directed his counsel not to go forward with the sale. 13. Given that the sale with Welch did not go forward, the Appliances and Property are still sitting at the T&C Property. All other matters have been addressed i.e., the Cartridges have been removed and there is no additional property/trash to look through with regard to 4

5 Case Document 193 Filed in TXSB on 07/07/12 Page 5 of 6 locating client documents and/or other papers that should be stored temporarily. Trustee s counsel and a representative from the Trustee s office have consolidated the trash as best possible and it awaits removal by building management. To the best of the Trustee s knowledge, nothing remains at the T&C Property which constitutes a document requiring preservation or property which the Trustee intends to administer. 1 Trustee s counsel has briefly detailed today s events for the counsel to the landlord of the T&C Property. More importantly, Trustee s counsel has stated to the landlord s counsel that the Debtor is fully vacated from the T&C Property as of today. To the extent the landlord would like to make the Appliances and Property available to charity, Trustee s counsel is willing to arrange for a pick-up by a local charity; however, the Trustee does not intend to supervise such move. The Trustee will continue to communicate with the landlord in terms of whether abandonment or some other arrangement will be appropriate as it relates to the Appliances and Property. DATED the 7 th day of July, Respectfully submitted, By: /s/ Heather R. Potts HEATHER R. POTTS State Bar No W. STEVE SMITH State Bar No Lamar Street, Ste Houston, Texas Telephone: (713) Facsimile: (713) ATTORNEYS FOR TRUSTEE 1 Shred-It mistakenly overlooked one console when they removed their other consoles on July 2, They will remove that console on July 10, Also, a Trustee representative will return to the T&C Property tomorrow afternoon or Tuesday to remove some recently purchased boxes which were too big to be removed today. Trustee s counsel has informed the landlord and building management about these two issues and has stated that neither issue should prevent the landlord from moving forward with any action to show the property and or begin renovations/preparations for a new tenant. 5

6 Case Document 193 Filed in TXSB on 07/07/12 Page 6 of 6 CERTIFICATE OF SERVICE I hereby certify that true and correct copy of the above filing will be served on July 9, 2012, on all parties listed on the attached list via regular first class mail, postage prepaid. All ECF users registered in this case will receive electronic service (via PACER) of this filing on July 7, /s/ Heather R. Potts HEATHER R. POTTS 6

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17 Case Document Filed in TXSB on 07/07/12 Page 1 of 2 SERVICE LIST FOURTH STATUS REPORT Ellen M. Hickman Office of the U.S. Trustee 515 Rusk Ave., Ste Houston, TX Johnie J. Patterson Miriam Goott Walker & Patterson, P.C. P.O. Box Houston, TX *Tax Masters, Inc. d/b/a Texas TaxMasters d/b/a TaxMasters 900 Town & Country Lane, Ste. 400 Houston, TX Turner/CNN Attn: Louise Sams One CNN Center Atlanta, GA Johnie J. Patterson jjp@walkerandpatterson.com Blank Rome One Logan Square 130 N. 18 th St. Philadelphia, PA *Maxximedia 202 Travis Houston, TX Fox News Channel Media Sales 1211 Ave. of the Americas, 22 nd Fl. New York, NY AMEX P.O. Box El Paso, TX Westwood One Attn: Hiram Lazar San Vicente Blvd., Ste. 350 Los Angeles, CA History Channel Attn: Ms. Nancy Alpert 235 East 45 th St. New York, NY DAP c/o Briarhollow Realty Group 2000 S. Dairy Ashford, Ste. 140 Houston, TX Locke Lord Bissell & Liddell 600 Travis, Ste Houston, TX MSNBC Attn: Sharon Otterman 30 Rockefeller Plaza New York, NY Dell c/o DFS Customer Care Dept. P.O. Box Austin, TX Caufield & James 2851 Camino Del Rio South, Ste. 410 San Diego, CA Malone & Bailey Richmond Ave., Ste. 800 Houston, TX Yahoo 3333 West Empire Ave. Burbank, CA The Weather Channel 300 Interstate North Parkway Atlanta, GA Patrick R. Cox c/o John Wesley Wauson WAUSON PROBUS, P.C. 1 Sugar Creek Center Blvd, Ste. 880 Sugar Land, TX John Rottaris 456 Main St., Ste. 600 Buffalo, NY Discovery Channel Attn: Bruce Campbell 1 Discovery Place Silver Spring, MD Securities & Exchange Commission 100 F. St., NE Washington, DC20549 RRBB 265 Davidson Ave., Ste. 210 Somerset, NJ Securities & Exchange Commission Suite Cherry St., Unit 18 Fort Worth, TX ESPN Advertising/Communications 77 W. 66 th St. New York, NY Hal F. Morris Ashley F. Bartram Office of the Attorney General Bankruptcy & Collections Division P.O. Box Austin, TX 78701

18 Case Document Filed in TXSB on 07/07/12 Page 2 of 2 Office of MN Attorney General 1400 Bremer Tower 445 Minnesota St. St. Paul, MN *Robert J. Rosenberg 53 rd at Third 885 Third Ave. New York, NY 1022 David Augustus The Spencer Law Firm 4635 SW Freeway, Ste. 900 Houston, TX Merchant Services, Inc. d/b/a EVO c/o Erin J. Jones erin@jmkllp.com Mark Siurek msiurek@warrensiurek.com The State Bank of Texas c/o William A. (Trey) Wood III trey.wood@bgllp.com The State Bank of Texas c/o Jason G. Cohen jason.cohen@bgllp.com Harris County c/o John P. Dillman houston_bankruptcy@publicans.com Terry L. Abram c/o Howard B. Cohen Gross, Shuman, Brizdle, & Gilfillani 465 Main Street, Suite 600 Buffalo, NY Ms. Deena Wissore P.O. Box 2151 Running Springs, CA Jeffrey A. Marks Vorys, Sater, Seymour and Pease LLP 302 East Fourth St. Suite 3500, Great American Tower Cincinnati, OH Sharon E. Marshall 5837 Martel Ave. Dallas, TX Securities & Exchange Commission c/o Jolene M. Wise wisej@sec.gov Kelly, Remmel & Zimmerman Merchant Service, Inc. d/b/a EVO c/o Timothy H. Norton 53 Exchange St. P.O. Box 597 Portland, Maine Otis Lee Harris, Sr. c/o E. Rhett Buck 3730 Kirby Dr., Ste Houston, TX Jim R. Smith Interest c/o Karen E. Murray Craddock Massey LLP 1400 Post Oak Blvd., Ste. 640 Houston, TX Alan M. Serna c/o Sidney J. Diamond Diamond Law 3800 N. Mesa, Ste. B-3 El Paso, TX The Comptroller of Public Accounts of the State of Texas c/o Jason A. Starks Assistant Attorney General Bankruptcy & Collections Division P.O. Box Austin, TX Patrick R. Cox 247 Hedwig Rd. Houston, TX Leonard H. Simon PENDERGRAFT & SIMON The Riviana Building 2777 Allen Parkway, Ste. 800 Houston, TX 77019