] On June 25, 2001, our former subsidiary, BlueStar
] Communications Group, Inc. made
] an irrevocable assignment for the benefit of its
] creditors of all its assets to an
] independent trustee in the
] state of Tennessee. Immediately thereafter, the Assignee
] began an orderly liquidation of BlueStar that was
] initially expected to be completed in the fourth quarter
] of 2002. However, the Assignee has informed us that it is
] still in the process of resolving some matters among
] BlueStar%u2019s creditors and that the process may extend
] into the second half of 2003.
]
] An ABC under Tennessee law
] is a non-judicial alternative to a plan of liquidation
] under Chapter 7 of the United States Bankruptcy Code. As
] a result of the ABC, BlueStars former assets are no
] longer controlled by us or BlueStar and cannot be used by
] either BlueStars or our board of directors to
] satisfy the liabilities of BlueStar. Consequently, the
] liquidation of BlueStar%u2019s assets and the discharging
] of its liabilities are currently under the sole control
] of the Assignee. Therefore, due to this loss of control,
] we deconsolidated BlueStar effective June 25, 2001, which
] resulted in the recognition of a deferred gain in the
] amount of approximately $55,200 in our consolidated
] balance sheet as of December 31, 2001. Such deferred gain
] represented%2

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