Commitments and Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note 3. Commitments and Contingencies

Legal Matters

From time to time, the Company may become involved in litigation relating to claims arising out of our operations in the normal course of business.  Other than as set forth below, no legal proceedings, government actions, administrative actions, investigations or claims are currently pending against us or involve us which, in the opinion of our management, could reasonably be expected to have a material adverse effect on our business or financial condition.

On October 28, 2011, Mr. Robert Weinstein, our former Chief Financial Officer, filed a Demand for Arbitration with the New York office of the American Arbitration Association against GEM seeking unpaid wages and benefits that Mr. Weinstein claimed he was owed under the terms of his employment agreement with GEM.  In February 2012, Mr. Weinstein was awarded a judgment totaling $391,914.  On October 5, 2012, in connection with such claim, Mr. Weinstein obtained a judgment against GEM for the sum of $414,235 in the Supreme Court of the State of New York, New York Count.  In connection with such judgment, Mr. Weinstein served Riverbay (as defined below) with the Restraining Notice to Garnishee, dated as of October 23, 2012 (the "Notice"). The Notice asserts that under New York law, Riverbay is prohibited, among other things, from making any payments to GEM that may be due under any agreement between GEM and Riverbay, pending the resolution and/or satisfaction of the aforementioned judgment.  The Company is continuing to contest Mr. Weinstein's claims and the amount that he may be due under this employment agreement.  The Company's management believes that if Mr. Weinstein's claim is ultimately resolved against GEM and the Company is forced to make any material payments to Mr. Weinstein under his employment agreement or if GEM is unable to receive at least a material portion of the payments due to it from Riverbay, this will materially adversely affect the Company's financial position, results of operations or liquidity.  This amount has been accrued as of September 30, 2012 and December 31, 2011.

On September 8, 2011, an action entitled Cooper Electric Supply Co. v. Southside Electric, Inc. was filed in the Superior Court of New Jersey.  GEM succeeded to the business of Southside Electric, Inc. ("Southside") pursuant to a share exchange between Southside and the Company in May of 2010.  We were served in October 2011.  The plaintiff asserts damages in the amount of approximately $23,700 for non-payment for goods supplied by the plaintiff to Southside.  The Company's management believes the resolution of this matter will not materially affect the Company's financial position, results of operations or liquidity.  As of September 30, 2012, this amount is reflected in accounts payable.

On September 26, 2011, the landlord for the Company's former Teaneck, New Jersey office filed a complaint for unpaid rent and legal fees of $15,179 in Superior Court of New Jersey. A judgment was granted in his favor in such amount. These amounts were accrued at December 31, 2011 and September 30, 2012.

Operating Leases

In 2011, the Company leased office space in Teaneck, New Jersey and in Sunshine and Midtown, Miami, Florida.  As of December 31, 2011, all office space leases were terminated.  In October 2011, the Company moved its corporate office to Baton Rouge, Louisiana.  The Company is utilizing office space, at no charge, from its Chief Financial Officer.  Rent expense for the nine months ended September 30, 2012 and for the fiscal year ended December 31, 2011 was $0 and $77,062, respectively.  Of the amount incurred for 2011, $12,900 is included in accrued expenses at September 30, 2012 and December 31, 2011.