LEGAL

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Legal Matters and Contingencies [Text Block]

16. LEGAL

On June 23, 2011, a claim was filed in the U.S. District Court of Dallas County, Texas by the Estate of Christopher Logan. Amount of damages sought were not provided in the claim. The claim lists eight defendants of which the Company is one. The claim asserts Mr. Logan died breathing carbon monoxide while diving with a T80G medium duty compressor (“T80G”). The claim’s cited belief by the plaintiff that the T80G was sold by Brownie’s based on representations made by Keene Engineering, Inc. also a manufacturer of dive compressors and also listed as a defendant. The Company believes the representation is erroneous because Brownie’s does not sell the make/model cited in the claim, and Brownie’s compressors have the brand name forged into the die-casting on the head of each cylinder. On April 18, 2012, the Company filed a Motion for Leave to Designate Responsible Third Parties on this the Company motioned to have the Court designate the responsible third parties named by the Company in the Motion. Legal counsel advised the Company the court shall grant such a motion unless an objecting party establishes that the moving Defendants failed to plead sufficient facts to meet the pleading requirement of the Texas Rules of Civil Procedure. In the meantime, the case moved to trial and per legal navigators, after four days of proceedings, there was a defense verdict against Honda. The jury placed 77% of fault on Seeders and 23% on the plaintiff. Seeders settled for their $1M policy pre-trial. BWMG was advised by its insurer that it was un-suited before the trial began so no liability will be assigned the Company in this case and/or paid out.

On or about May 3, 2012, the Company received notice of filing of an action for breach of contract, conspiracy to commit securities fraud and injunctive relief against the Company and the first party named in Note 11. CONVERTIBLE DEBENTURES Ref (1). The Plaintiff is the second party referenced in Note 11. CONVERTIBLE DEBENTURES, Ref (1) who purchased the original debenture from the first party. The net book value, excluding interest, on the debenture as of June 30, 2012 was approximately $12,700. The amount named in the lawsuit is “damages in excess of $15,000”, plus other fees. The Company believes this action is without merit. See Note 22. SUBSEQUENT EVENTS for dismissal of complaint without prejudice.

On or about April 27, 2012, the Company received a default notice from BBT under its Forbearance Agreement on the mortgage underlying the Company’s real estate. BBT subsequently received judgment of foreclosure, as the 17th Judicial Circuit of the Circuit Court of Broward County awarded BBT a final judgment in the amount of $1,123,269.30. See Note 22. SUBSEQUENT EVENT for update on mortgage foreclosure.