10/01/2007 235 Joint Stipulation , filed by Pro Mold, Inc. (RE: related document(s)195 Order Setting Hearing, ). (Kennedy, Ellen) (Entered: 10/01/2007)
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Doc 235
In Re:
Case No. 07-50935
Judge William Howard
PRO MOLD, INC.,
Chapter 11
Debtor.
JOINT STIPULATION OF FACTS ON MOTIONS BY THE UNITED STATES TRUSTEE AND THE MURPHY ENTITIES FOR APPOINTMENT OF A CHAPTER 11 TRUSTEE
Creditor 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, III (collectively the "Murphy Entities"), Richard F. Clippard, United States Trustee for Region 8 ("United States Trustee"), and Debtor Pro Mold, Inc. ("Debtor Pro Mold") by and through their respective attorneys, pursuant to this Court's Scheduling Order, dated August 31, 2007, file this Joint Stipulation of Fact.
United States Trustee Joint Stipulation of Facts
1. On August 9, 2007, the Office of the United States Trustee filed its Motion for Appointment of a Chapter 11 Trustee in the matter of In re Pro Mold, Inc., USBC-EDKY Case No. 07-50935, Document No. 175, (the "Pro Mold UST Motion.").
2. The Pro-Mold UST Motion adopts by reference the Plasticon UST Motion as the basis for the appointment of a Chapter 11 Trustee in the Pro-Mold bankruptcy case.
3. The Murphy Entities adopted by reference the Plasticon UST Motion.
4. In addition, the Murphy Entities adopted by reference the allegations in their Motion for Relief from the Automatic Stay filed in this matter on June 15, 2007, Document No. 77, to the extent such allegations constituted cause for the appointment of a Chapter 11 Trustee in this case.
5. Further, the Murphy Entities adopted by reference the allegations in the Motion for Relief from the Automatic Stay filed by Pro Plas, LLC in the Plasticon International, Inc. case on June 22, 2007, Document No. 83, to the extent such allegations constituted cause for the appointment of a Chapter 11 Trustee in this case.
6. The Murphy Entities, the United States Trustee, and Debtor Pro Mold adopt by this reference and incorporate herein the Joint Stipulation of Fact filed by the United States Trustee, Pro Plas, LLC, and Plasticon in connection with the Motions for Appointment of a Chapter 11 Trustee filed by the United States Trustee and Pro Plas, LLC in the Plasticon bankruptcy proceeding.
Additional Facts
Jurisdiction
7. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §1334 and 28 U.S.C. §157.
8. This matter is a core proceeding under 28 U.S.C. §157(b)(2)(A).
The Debtors and Related Parties
9. On May 16, 2007 Debtor Pro Mold, Inc, filed its Voluntary Chapter 11 Petition for Relief in the United States Bankruptcy Court for the Eastern District of Kentucky, Lexington Division (“Court”).
10. Debtor Pro Mold continues to operate its business and manage its financial affairs pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
11. Debtor Pro Mold is a wholly owned subsidiary of Plasticon International, Inc.
12. On May 16, 2007 Debtor Plasticon International, Inc. (“Debtor Plasticon”), filed its Voluntary Chapter 11 Petition for Relief in the United States Bankruptcy Court for the Eastern District of Kentucky, Lexington Division (“Court”).
13. Debtor Plasticon continues to operate its business and manage its financial affairs pursuant to Sections 1107 and 1108 of the Bankruptcy Code.
14. Brandon Turek is the son of James N. Turek, Sr.
15. James N. Turek, II is the son of James N. Turek, Sr.
16. Iris Turek is the wife of James N. Turek, Sr.
17. LexReal Co., LLC is a Kentucky limited liability company (“LexReal”).
18. Promotional Container, Inc. is a Nevada corporation (“PCI”)
The Murphy Entities
19. The John P. Murphy III Revocable Trust No. 1 (“Trust”) asserts that it is a secured creditor of Debtor Pro Mold and holds a secured claim in the amount of at least $241,493.69 as of May 16, 2007 as evidenced by Proof of Claim No. 16 filed by the Trust in the Pro Mold bankruptcy proceeding on June 14, 2007.
20. The Trust asserts that it is a secured creditor of Debtor Pro Mold and holds a second secured claim in the amount of at least $98,644.74 as of May 16, 2007 as evidenced by Proof of Claim No. 13 filed by the Trust in the Pro Mold bankruptcy proceeding on June 14, 2007.
21. Pro Plas LLC (“Pro Plas”) assignee of and successor to the Trust, asserts that it is a secured creditor of Debtor Plasticon and Debtor Pro Mold, and holds a secured claim in the amount of at least $940,184.81 as of May 16, 2007 as evidenced by Proof of Claim No. 15 filed by the Trust in the Pro Mold bankruptcy proceeding on June 14, 2007.
22. Pro Plas LLC (“Pro Plas”) assignee of and successor to the Trust, asserts that it is a secured creditor of Debtor Plasticon and Debtor Pro Mold, and holds a secured claim in the amount of at least $940,184.81 as of May 16, 2007 as evidenced by Proof of Claim No. 8 filed by the Trust in the Plasticon bankruptcy proceeding on June 22, 2007.
23. 10315 LLC asserts that it is an unsecured creditor of Debtor Pro Mold and holds a secured claim in the amount of at least $7,102.73 as of May 16, 2007, as evidenced by Proof of Claim No. 14 filed by the Trust in the Pro Mold bankruptcy proceeding on June 14, 2007.
24. John P. Murphy, III (“Murphy”) asserts that he is a secured creditor of Debtor Pro Mold and holds a secured claim in the amount of at least $35,000 as of May 16, as evidenced by Proof of Claim No. 12 filed by the Trust in the Pro Mold bankruptcy proceeding on June 14, 2007.
Other Bankruptcy Proceedings
25. Prior to filing the Chapter 11 cases for Debtor Plasticon and Debtor Pro Mold, James N. Turek, Sr. was involved in at lease two other bankruptcy proceedings.
26. James N. Turek, Sr., was the responsible party for International Plastics, Inc. ("IPI") during its Chapter 11 proceeding, United States Bankruptcy Court for the Eastern District of Kentucky, Case No. 92-52264-jl.
27. James N. Turek, Sr., was a Chapter 11 Debtor from 2002 to 2006, United States Bankruptcy Court, Northern District of Florida, Case No.02-20411-PCY5.
Cash Collateral Motion and Orders
28. On May 21, 2007, Debtor Pro Mold filed its Amended Motion to Use Cash Collateral.
29. Murphy Entities Exhibit 6 is a true and accurate copy of, Debtor Pro Mold’s Amended Motion to Use Cash Collateral (Pro Mold Docket No 22).
30. On May 21, 2007, Debtor Pro Mold filed its Affidavit in Support of Motion to Use Cash Collateral.
31. Murphy Entities Exhibit 7 is a true and accurate copy of Debtor Pro Mold’s Amended Motion to Use Cash Collateral (Pro Mold Docket No 23).
32. On May 31, 2007, the Court entered the Agreed Order on Motion to Use Cash Collateral.
33. Murphy Entities Exhibit 8 is a true and accurate copy of the Agreed Order on Motion to Use Cash Collateral (Pro Mold Docket No 53).
34. On June 21, 2007, the Court entered its Order Setting Hearing on Motion to Use Cash Collateral (Pro Mold Docket No 86).
35. Murphy Entities Exhibit 10 is a true and accurate copy of the Court’s Order Setting Hearing on Motion to Use Cash Collateral.
36. On June 22, 2007, the parties field their Joint Motion to Set Aside Hearing on Motion to Use Cash Collateral.
37. Murphy Entities Exhibit 11 is a true and accurate copy of the Joint Motion to Set Aside Hearing on Motion to Use Cash Collateral (Pro Mold Docket No 92).
38. On June 26, 2007, the Court entered the Agreed Order Setting Aside Hearing on Motion to Use Cash Collateral
39. Murphy Entities Exhibit 12 is a true and accurate copy of the Agreed Order Setting Aside Hearing on Motion to Use Cash Collateral (Pro Mold Docket No 93).
Post-Petition Transfers by Pro Mold, Inc.
40. Murphy Entities Exhibit 1, Page 1, is a true and accurate schedule summarizing certain post-petition transfers by Pro Mold since May 16, 2007 (the “Petition Date”).
41. True and accurate supporting details from Debtor Pro Mold’s accounting records are attached to Exhibit 1.
42. The transfers listed on Murphy Entities Exhibit 1, Page 1, identified as management fees, paid to Debtor Plasticon, were not authorized by the Court or included as an authorized expenditure pursuant to the Agreed Cash Collateral Order, Exhibit 8.
43. Prior to the Petition Date, Debtor Pro Mold did not pay a management fee to Debtor Plasticon.
44. The transfers listed on Murphy Entities Exhibit 1, Page 1, identified as appraisal fees, paid to, Chantal Appraisal, Roger A. Chantal, ASA, were not authorized by the Court or included as an authorized expenditure pursuant to the Agreed Cash Collateral Order, Exhibit 8.
45. The transfer listed on Murphy Entities Exhibit 1, Page 1, identified as being paid to LexReal was not authorized by the Court or included as an authorized expenditure pursuant to the Agreed Cash Collateral Order, Exhibit 8.
Employment and Payment to Appraiser
46. Debtor Pro Mold employed a professional, Roger A. Chantal, ASA, without the Court’s approval as is required by 11 U.S.C. Section 327.
47. Debtor Pro Mold paid a professional, Roger A. Chantal, ASA, without the Court’s approval as is required by 11 U.S.C. Section 328.
48. Federal Rule of Bankruptcy Procedure 6005 states that “The order of the Court approving the employment of an appraiser or auctioneer shall fix the amount or rate of compensation.”
Income Tax Returns
49. Debtor Pro Mold’s federal income tax return and applicable state income tax returns for the year ending December 31, 2006 were not filed as of September 20, 2007.
50. Debtor Plasticon’s federal income tax return and applicable state income tax returns for the year ending December 31, 2006 were not filed as of September 20, 2007.
51. Debtor Pro Mold’s and Debtor Plasticon’s federal income tax return(s), even if timely and properly extended would have been due, at the latest, on September 17, 2007.
Pro Mold’s Bankruptcy Statements and Schedules
52. Debtor Pro Mold did not disclose any transfers in its Statement of Financial Affairs filed by Debtor Pro Mold on or about June 6, 2007.
53. Murphy Entities Exhibit 2, Page 1, is a true and accurate schedule summarizing certain pre-petition transfers by Pro Mold since January 1, 2007.
54. James N. Turek, Sr., President of Pro Mold, executed the Schedules and Statement of Financial Affairs filed on June 6, 2007 under penalty of perjury.
Operating Order and Operating Reports
55. The Operating Order directs the Debtor to file Monthly Operating Reports for the preceding month no later than the tenth of each month. Murphy Entities Exhibit 5, § V.
56. The Operating Order also directs the Debtor title all accounts as “[Debtor’s name], Debtor in Possession.” Murphy Entities Exhibit 5, § II.
57. William D. Bishop (“Bishop”) of Arcadia Consulting Services has been contacted and has agreed to serve the Debtor as CRO as set forth in the Application to Employ a Chief
Restructuring Officer previously filed herein.
RICHARD F. CLIPPARD
United States Trustee for Region 8
By Counsel
By: /s/ John L. Daugherty
John L. Daugherty
Assistant U.S. Trustee
00 E. Vine St., Suite 500
Lexington, Kentucky 40507
(859) 233-2822
FOWLER MEASLE & BELL PLLC
By: /s/ Ellen Arvin Kennedy
Ellen Arvin Kennedy
Taft A. McKinstry
Timothy A. West
300 West Vine Street, Suite 600
Lexington, Kentucky 40507-1660
(859) 252-6700
(859) 255-3735 Facsimile
Attorneys for Debtor Pro Mold, Inc. and Debtor
Plasticon International, Inc.
STONE, LEYTON & GERSHMAN
A Professional Corporation
By: /s/ Howard S. Smotkin
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
Attorneys for the Murphy Entities |
