BANKRUPTCY FILING

9 Months Ended

Jun. 30, 2011

Reorganizations [Abstract]

BANKRUPTCY FILING

NOTE 11. BANKRUPTCY FILING

On August 5, 2008 the United States Bankruptcy Court for the Central District of California entered an Order Confirming Second Amended Plan of Reorganization under Chapter 11 of the Bankruptcy Code (the "Plan") of the Company. The Plan classifies claims and interest in various Classes  according  to their right to priority  of  payments  as  provided in the United States Bankruptcy  Code,  11 U.S.C.{section} 101 et seq. (the  "Bankruptcy  Code").  The Plan provides that upon payment of all obligations pursuant to the Plan, the Company shall be discharged of liability for payment of debts, claims and liabilities incurred before confirmation of the Plan, to the extent specified in {section}1141 of the Bankruptcy Code.

The Plan provided for the treatment of each Class, and for the cash payments that each Class of creditors will receive (and for the existing equity interests and rights that equity security holders will retain under the Plan. The effective date of the Plan was August 15, 2008 (the "Effective Date"). The Company has been funding the Plan through cash on hand and accumulated by the Effective Date to pay off the allowed Priority Unsecured Tax claims.

On the Effective Date, unexpired leases and executory contracts were assumed as obligations of the reorganized Company.  The Order of the Court approving the Plan constitutes an order approving the assumption of each lease and contract.  Within 120 days of the entry of the order confirming the Plan, the Company filed a status report with the Court explaining what progress has been made toward consummation of the confirmed Plan.  The status report was served on the United States Trustee, the twenty largest unsecured creditors, and those parties who have requested notice. Status reports are filed every 120 days and served on the same entities until the Plan is fully consummated.

All persons or entities holding preferred or common stock in the Company are referred to in the Plan as "Interest Holders". The pre-existing pre-petition equity ownership interests and rights of all Interest Holders will be left intact and unimpaired. Of the total amount of common shares issued, a majority of the common shares were issued to insiders of the Company. However, the Directors and President of the company elected to convert their debt of $1,670,000 to Preferred Convertible Stock rather than issue approximately 33,400,000 shares of common stock as stated in the Plan.