Extract from Doc 23: Part 2
Transcription of Doc 23
38. Riezman Berger, P. C. received the new certificate registered in the name of Plasticon representng the Pro Mold Shares together with the Stock Pledge Agreement and Irrevocable Stock Power
39. The Third Agreement states that paragraph 7.5 will be added to the Agreement:
Attorney Fees: Notwithstanding anything to the contrary contained in this Agreement, upon the closing of the transactions contemplated by this Agreement the parties agree that PLNI (Plasticon), on the one hand, and the Trust, LLC and JPM (Murphy), on the other, shall each be liable for the payment of 50% of all legal fees and expenses incurred by the Trust, LLC and/or JPM (Murphy) in connection with this transaction, and such fees and expenses shall be paid by PLNI (Plasticon) as directed by JPM (Murphy) within ten (10) business days from the final invoice to PLNI (Plasticon).
40. The final invoice for the payment of 50% of all legal fees and expenses incurred by the Trust, LLC and./or JPM (Murphy) was submitted to Plasticon.
41. As of this date, Plasticon has failed and refused to pay 50% of all legal fees and expenses incurred by the Trust, LLC and/or Murphy in connection with this transaction.
42. The Trust, LLC and/or Murphy have paid 100% of the legal fees and expenses in connection with this transaction.
43. Pro Mold failed to timely pay its rent to the LLC for September, October, November and December 2006 and January 2007 in the amount of $61,173.60 plus attorneys’ fees and court costs until the LLC filed suit in the Circuit Court of St. Louis County, Missouri on or about December 18, 2006.
44. Pro Mold failed to timely pay the October, November and December 2006 and January 2007 payments in the amount of $56,477.68 plus attorneys’ fees and costs in regard to the Regions Bank debt that was transferred to the Trust until the Trust filed suit in the Circuit Court of St. Louis County, Missouri on or about December 18, 2006.
45. The Trust transferred and assigned its’ interest in the $1,000,0000 Note to Pro Plas, LLC, a Missouri limited liability company.
46. Plasticon failed to pay the $125,000 principal payment on the $1,000,0000 Note on April 1, 2007.
47. Plasticon requested and Pro Plas granted Plasticon an extension of time until April 16, 2007 to make the April 1, 2007 principal payment.
48. Pro Mold tendered and Pro Plas accepted a $125,000 check on or about April 16, 2007.
49. Pro Plas attempted to cash the check and was told by the bank that Pro Mold had insufficient funds on deposit to cover the check.
50. Pro Plas notified Pro Mold.
51. Pro Mold stopped payment on the check.
52. On April 20, 2006 Pro Plas declared an Event of Default pursuant to the terms of the $1,000,000 Note including but not limited to the following:
4.1 the failure by Borrower to pay any installment of principal or interest, or any other amount,payable pursuant to this Note on the date when due; or…
53. The Stock Pledge Agreement states the following:
10. SECURED PARTY (Pro Plas) agrees and acknowledges that Buyer (Plasticon) shall retain all voting rights with respect to PMI (Pro Mold) Shares during the time that this Agreement remains in full force and effect, so long as Buyer is not in default under any of the Loan Documents. If Buyer defaults in the payment or performance of any of Buyer’s obligations under any of the Loan Documents, which are secured by this Agreement, Buyer shall not have, nor exercise any voting rights with respect to the PMI Shares, unless and until such time as the default(s) has been cured in accordance with the cure period, if any, provided for in the Loan Documents. If the default is not cured within any such cure period and/or if Secured Party exercises its rights or remedies under any of the Loan Documents or this Agreement after a default has occurred by the Buyer, all voting rights of the Buyer with respect to the PMI Shares shall automatically be terminated without any further action by Secured Party.
54. In addition, the Stock Pledge Agreement states the following:
4. In the event of any default by Buyer of any of its obligations under any of the Loan Documents, wihch is not cured within the cure provisions, if any, set forth therein, SECURED PARTY may enforce its security interest in the PMI Shares by: (i) retaining the PMI Shares in partial satisfaction of the Buyer’s obligations under the Loan Documents; (ii) selling or disposing of all or any part of the PMI Shares at public or private sale or disposition of the PMI Shares; and/or (iii) exercising any other rights or remedies of Secured Party set forth in this Agreement or any of the Loan Documents or as provided by law.
55. On April 20, 2007 Pro Plas notified Plasticon and Pro Mold that Plasticon was in default of its obligations to Lender Pro Plas under the following documents:
1. that Share and Asset Purchase Agreement dated December 5, 2005 by and between Borrower and Lender (the “Purchase Agreement” which term includes any modifications, amendment or extension thereto);
2. that certain Promissory Note dated December 31, 2005 in the original principal amount of $1,000,000.00 (the “Note” which term shall also include all notes that precede the same, or any modification, amendment or extension thereto);
3. that certain Security Agreement dated December 31, 2005 (the “Security Agreement”) executed by Borrower and Pro Mold, Inc. (“PMI”) for the benefit of Lender;
4. that certain UCC-1 Financing Statement (“Financing Statement”) executed by PMI for the benefit of Lender and recorded with the State of Missouri, Office of the Secretary of State, and the St. Louis County Recorder of Deeds;
5. the Stock Pledge Agreement dated April 30, 2006, with an effective date of December 31, 2005, executed by Borrower for the benefit of Lender, as additional security for the repayment of all of Borrower’s obligations;
6. the Agreement, Note, Security Agreement, and Stock Pledge Agreement together with all other documents executed by Borrower and/or PMI regarding the transaction contemplated by the Purchase Agreement are hereinafter referred to as the “Loan Documents.”
56. As of April 19, 2006 the following amounts were due:
Principal $875,000
Legal Fees* (invoiced 12-31-06) $41,563.16
Legal Fees since 1/1/07 $32,027.41
Accrued Interest and Charges as of April 19, 2006 $6,004.37
Total Due as of April 19, 2006 $954,594.94**
Totals $875,000 $41,563.16 $32,027.41 $6,004.37 $954,594.94**
*Pursuant to Restatement and Amendment of First Amendment to Share and Asset Purchase Agreement (invoiced 12-31-06)
**Plus all costs of collection, including attorneys’ fees and costs incurred by Pro Plas in regard to this matter.
57. Pro Plas had the right to immediate possession of the Collateral and directed Borrower Plasticion and/or Pro Mold to assemble the collateral pursuant to the terms of the Security Agreement.
58. Pro Plas in the April 20, 2007 Notice of Default stated:
All voting rights of Borrower with respect to the PMI (Pro Mold) Stock are automatically terminated without further action by Pro Plas pursuant to the Pledge Agreement dated April 30, 2006.
59. On April 24, 2007 the attorneys for Plasticon and Pro Mold contacted the attorneys for Pro Plas and reported that a check for $125,000 was being received by Pro Mold from Plasticon via Federal Express on April 25, 2007.
60. The attorneys for Pro Plas requested a copy of that check when it was received by Pro Mold.
61. As of this date, a copy of that check has not been received.
62. The parties were unable to resolve this matter.
63. On May 10, 2007 Plasticon and/or Pro Mold filed a Motion for Temporary Restraining Order in the Circuit Court of St. Louis County, Missouri (“Second TRO”).
64. One of the Exhibits attached to the Second TRO Motion was a letter from Big Apple
Consulting USA, Inc. addressed to Jim Turek at Plasticon.
65. The letter had previously been given to Pro Plas to assure Pro Plas that Plasticon was selling additional stock to make the April 1, 2007 principal payment to Pro Plas.
66. On May 11, 2007 the Circuit Court of St. Louis County, Missouri denied all requests in the Motion for TRO except the Court ordered “Murphy and anyone acting in concert with Murphy is hereby enjoined from conducting a public sale of collateral on 5/18/07 upon Pro Mold & Plasticon’s posting of a bond, payable to the registery of the court, in the amount of $875,000, and until such time as the court may issue further order. Plasticon’s Motion to Intervene is hereby granted.”
67. Plasticon and/or Pro Mold failed to post the $875,000 bond.
68. Plasticon and Pro Mold threatened to file Chapter 11 in Wyoming or Kentucky and did file this case in Kentucky.
CONCLUSION
69. Plasticon and Pro Mold are not affiliated Debtors as defined in 11 U.S.C § 101(a)(A),
(B) because Plasticon does not directly or indirectly own, control or hold with power to vote 20 percent or more of the outstanding securities of Pro Mold or vice versa.
70. Pro Mold and has claims and causes of action against Plasticon.
WHEREFORE, Creditors John P. Murphy, III Revocable Trust No. 1; Pro Plas, LLC, a Missouri limited liability company; 10315, LLC, a Missouri liability company; and John P. Murphy, request that the Court deny the Debtor’s Motion for Joint Administration and Procedural Consolidation.
STONE, LEYTON & GERSHMAN
A Professional Corporation
By: /s/ E. Rebecca Case
E. Rebecca Case, EDMO #2800
Howard S. Smotkin, EDMO #4407
7733 Forsyth Boulevard, Suite 500
St. Louis, Missouri 63105
(314) 721-7011
(314) 721-8660 Facsimile
erc@stoneleyton.com
hss@stoneleyton.com
GREENEBAUM DOLL & MCDONALD PLCC
By: /s/ Gregory R. Schaaf
John W. Ames
Gregory R. Schaaf
300 W. Vine Street, Suite 1100
Lexington, KY 40507
(859) 288-4629
(859) 367-3877 (facsimile)
e-mail: grs@gdm.com
Attorneys for John P. Murphy III Revocable
Trust No. 1; Pro Plas, LLC; 10315, LLC, and
John P. Murphy, III, individually
Local Counsel for John P. Murphy III Revocable
Trust No. 1; Pro Plas, LLC; 10315, LLC, and
John P. Murphy, III, individually |
