HomeMy WebLinkAbout99-02822LUCILLE FARMS OF VERMONT, INC.
Plaintiff
V.
I.F. SERVICES. LTD,
t/a Rohrer's Stromboli,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION NO.
qy a?aa
NOTICE
You have been sued in Court. If you wish to defend against the claims set forth in the
following pages, you must take action within twenty (20) days after this Complaint and Notice
are served, by entering a written appearance personally or by attorney and filing in writing with
the Court you defenses or objections to the claims set forth against you. You are warned that if
you fail to do so the case may proceed without you and a judgment for any money claimed in the
Complaint or for any other claim or relief requested by the Plaintiff. You may lose money or
property or other rights important to you.
YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU
DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE
THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL
HELP:
Cumberland County Court Administrator
Cumberland County Courthouse
4th Floor
South Hanover Street
Carlisle, Pennsylvania 17013
Telephone No: (717) 240-6200
NAUMAN, SMITH, SHISSLER & HALL
Craig J. Staudenmaier, Esquire
Supreme Court ID #34996
200 North Third Street
Post Office Box 840
Harrisburg, PA 17108
Telephone: (717) 236-3010
Counsel for Lucille Farms of Vermont. Inc.
LUCILLE FARMS OF VERMONT, INC.
Plaintiff
V.
I.F. SERVICES. LTD,
t/a Rohrer's Stromboli,
Defendant
IN THE COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
CIVIL ACTION NO.
Le han demandado a usted en la Corte. Si usted quiere defenderse de estas demandas
expuestas en las paginas siguientes, usted tiene viente (20) dias de plazo al partir de la fecha de
la demanda y la notification. Usted debe presentar una apariencia escrita o en persona o por
abogado y archivar en la Corte en forma escrita sus defensas o sus objeciones a las demandas en
contra de su persona. Sea avisado que si usted no se defiende, la Corte tomara medidas y puede
entrar una Orden contra usted sin previo aviso o notification y por cualquier queja o alivio que es
pedido en la petition de demando. Usted puede perder dinero o sus propiedades o otros derechos
importantes para usted.
LLEVE ESTA DEMANDA A UN ABODAGO INMEDIATAMENTE. SI NO TIENE
ABOGADO O SI NO TIENE EL DINERO SUFICIENTE DE PAGAR TAL SERVICIO,
VAYA EN PERSONA O LLAME POR TELEFONO A LA OFICINA CUYA DIRECCION
SE ENCUENTRA ESCRITA ABAJO PARA AVERIGUAR DONDE SE PUEDE
ASISTENCIA LEGAL.
Cumberland County Court Administrator
Cumberland County Courthouse
4th Floor
South Hanover Street
Carlisle, Pennsylvania 17013
Telephone No: (717) 240-6200
NAUMAN, SMITH, SHISSLER & HALL
By: Craig J. Staudenmaier, Esquire
Supreme Court ID #34996
200 North Third Street
Post Office Box 840
Harrisburg, PA 17108
Telephone: (717) 236-3010
Counsel for Lucille Farms of Vermont. Inc.
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4. On or about June 9, 1998, Lucille Farms delivered to IFS the aforesaid quantity of cheese
by truck and requested the agreed-upon payment. IFS accepted delivery of the cheese products as
set forth in Exhibit "A" attached hereto.
5. IFS refused to make payment at that time representing that a check for full payment of
the amount owed under the purchase order attached as Exhibit "A" had been federal expressed to
Lucille Farms. Lucille Farms never received any such payment.
6. To date, Lucille Farms has received no payment from ITS for the products delivered to
and accepted by IFS under the purchase order attached as Exhibit "A".
7. Despite repeated demands for payment, IFS has failed and refused and continues to fail
and to refuse to pay the amount of the purchase order attached as Exhibit "A" hereto for the cheese
delivered and accepted.
WHEREFORE, LUCILLE FARMS OF VERMONT, INC., Plaintiff demands judgment in
its favor and against I.F. Services Ltd., Ua Rohrer's Stromboli in the amount of $12,316.36 plus pre
and post judgment interest and costs of suit.
SHISSLER arc HALL
By:
Craig J taudenmaier, Esquire
Suprem Court ID# 34996
200 North Third Street, P. 0. Box 840
Harrisburg, PA 17108-0840
Telephone: (717) 236-3010
Counsel for Lucille Farms of Vermont, Inc.
I, ALFONSO FALIVENE, Secretary/Treasurer of Lucille Farms of Vermont, Inc.,
Plaintiff in the foregoing proceeding, make the following statement subject to the penalties of 18
Pa. C.S.§4909, relating to unsworn falsifications to authorities, and do state that as
Secretary/Treasurer of Lucille Farms of Vermont, Inc., am authorized to make this verification
on its behalf, and do state that the facts set forth in the foregoing Complaint are true and correct
to the best of my knowledge, information and belief.
Witness
Date:
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SHIP I. F. S. LTD.
TO ROHRER'S STOMBOLI
1302 SLATE HILL RD, #3
CAMP HILL PA 17011
SOLD I. F. S. LTD.
TO ROHRER'S STOMBOLI
1302 SLATE HILL RD. #3
CAMP HILL PA 17011
TERMS
ITE CHEDDAR BLOCK
S.MOZZ LUCILLE 10/6#
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F A- R- M- S
OF
VERMONT. INC.
150 River Rd. a P.O. Box 517 a Montville, N10704!
(973)334.6030 a Fax: (973) 402.6361
OUR ORDER NO.
0049668
GATE INVOICE o PG
SHIP VIA
CASES
100 14290.38
50 3081.60
YOUR ORDER NO.
RICE EXTENSION
1.712 7347. 28,
1.6125 4969.08
MERCHANDISE TOTAL I FREIGHT I MISC.
12316. 36 I .00
ORIGINAL
EXHIBIT
TOTAL
12316. 36. .
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SHERIFF'S RETURN - REGULAR
CASE NO: 1999-02822 P
COMMONWEALTH OF PENNSYLVANIA:
COUNTY OF CUMBERLAND
LUCILLE FARMS OF VERMONT INC
VS.
I F SERVICES LTD
CPL. MICHAEL BARRICK Sheriff or Deputy Sheriff of
CUMBERLAND County, Pennsylvania, who being duly sworn according
to law, says, the within NOTICE AND COMPLAINT wnn nerved
upon I F SERVICES LT T/A ROHRERS STROMBOLI _ the
defendant, at 13:45 HOURS, on the llth_ day of 1999 at 1302 SLATE HILL ROAD
CAMP HILL, PA 17011 CUMI71?IiLANU
County, Pennsylvania, by handing to SANDY RIDER (SUPERVISOR)
a true and attested copy of the NOTICE AND COMPLAINT
and at the same time directing Her attention to the contenl.it t:hercof.
Sheriff's Costs: So answ
Docketing 18.00?,r? "rvrtl? i..e?s
Service 8.68
Affidavit .00
Surcharge 8.00 lT ?Phbfi?3-K1?150,-5)1r+y°aLf""'
05/11 19SMITH, SHISSLER & HALL
b
y "? -iJ`p1?y t?itL'Y1 t. f?"• ____---
Sworn and subscribed to before me
this ld-tE day of _
19 ?? A.D.
r;
LUCILLE FARMS OF IN THE COURT OF COMMON PLEAS
VERMONT, INC., CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
V. NO. CIVIL 99-2822
Z.F. SERVICES, LTD., t/a
ROHER'S STROMBOLI, CIVIL ACTION- LAW
Defendant
TO: Lucille Farms of Vermont, Inc.. Plaintiff
and
Craig J. Staudenmaier, Esquire
Nauman, Smith, Shissler & Hall
200 North Third Street
P.O. Box 840
Harrisburg, PA 17108-0840
(Attorneys for Plaintiff)
YOU ARE HEREBY NOTIFIED TO
PLEAD TO THE ENCLOSED
NEW MATTER WITHIN TWENTY
(20) DAYS FROM THE DATE OF
SERVICE HEREOF OR A DEFAULT
JUDGMENT MAY BE ENTERED
AGAINST YOU.
Paige Macdonald-Matthes, Esquire
I.D. #66266
2320 North Second Street
P.O. Box 60457
Harrisburg, PA 17106-0457
(717) 238-6570
(Attorneys for Defendants)
t
LUCILLE FARMS OF IN THE COURT OF COMMON PLEAS
VERMONT, INC., CUMBERLAND COUNTY, PENNSYLVANIA
Plaintiff
V.
I.F. SERVICES, LTD., t/a
ROHER'S STROMBOLI,
Defendant
NO. CIVIL 99-2822
CIVIL ACTION- LAW
DEFENDANT'S ANSWER TO PLAINTIFF'S COMPLAINT, TOGET'HRR
WITH NEW MATTER
AND NOW, the Defendant, I.F. Services, Limited, by and
through its attorneys, Cunningham & Chernicoff, P.C. and files
its Answer to the Complaint filed by the Plaintiff and in
support thereof avers as follows:
1. Admitted.
2. Admitted.
3. Denied. It is denied that on or about June 16,
1998, IFS entered into an agreement with Lucille Farms for the
purchase of loo cases of white cheddar block cheese and So
case of mozzarella cheese for a total purchase price of
$12,316.36. By way of further reply, IFS acting as the
1
l
management company for S-Pro Corporation d/b/a Rohrer's
Stromboli, a Debtor-in Possession, purchased the cheese
product from Plaintiff.
4. Denied. It is denied that Defendant (s) received and
accepted the goods described in Exhibit "A". By way of
further reply, Defendant, as the management company for the S-
Pro Corporation d/b/a Rohrer's Stromboli, received and
accepted on behalf of S-Pro Corporation d/b/a Rohrer's
Stromboli the goods described in Plaintiff's Exhibit "A".
5. Admitted in part and denied in part. It is admitted
that Answering Defendant has not paid Plaintiff. It is denied
that Answering Defendant was obligated to pay Plaintiff. As
to the balance of the averments set forth in Paragraph 5 of
the Plaintiff's Complaint, Answering Defendant is without
knowledge sufficient to form a belief as to the truth of the
averments, and strict proof of the same, if relevant, is
demanded at the time of trial.
6. Admitted in part and denied in part. It is admitted
that the named Defendant has not made payment in the amount of
$12,316.36 which is alleged to be due and owing by Plaintiff.
2
It is denied that the named Defendant owes Plaintiff the sum
of $12,316.36.
7. Admitted in part and denied in part. It is admitted
that the named Defendant has not made payment in the amount of
$12,316.36 which is alleged to be due and owing by Plaintiff.
it is denied that the named Defendant owes Plaintiff the sum
of $12,316.36.
WHEREFORE, Defendant, I.F. Services, Ltd. respectfully
request that this Honorable Court enter judgment in its favor
and against the Plaintiff, Lucille Farms of Vermont, Inc., and
dismiss the Plaintiff's Complaint with prejudice and further
award Defendant all such other relief as is proper and just.
NEW MATTER
8. The averments set forth in Paragraph 1 through 7 are
incorporated herein by reference as if more fully set forth at
length.
3
A
9. On January 27, 1998, S-Pro Corporation d/b/a
Rohrer's Stromboli ("Debtor") filed for relief under Chapter
it of the United States Bankruptcy Code in the United States
Bankruptcy Court for the Middle District of Pennsylvania.
10. On March 2, 1998 an Order of Court was issued
("Order") whereby the Bankruptcy Court approved a certain
management agreement ("Agreement") between S-Pro corporation
d/b/a Rohrer's Stromboli and Defendant. A true and correct
copy of March 2, 1998 Order is attached hereto and is marked
as Exhibit "A".
11. Pursuant to the order and the Agreement, Defendant
operated the business of the Debtor as a manager only until
September 21, 1998.
12. Between March 2, 1998 and September 21, 1998,
Defendant operated Debtor's business only on behalf of Debtor.
13. All products purchased between March 2, 1998 and
September 21, 1998 were purchased on behalf of Debtor, at
Debtor's request.
4
14. Between March 2, 1998 and September 21, 1998,
Defendant had no ownership interest in Debtor, and Defendant's
sole function was to act as the management company for Debtor.
15. On September 21, 1998 Defendant purchased the assets
of Debtor, pursuant to 11 U.S.C. §363.
16. Plaintiff's claim arose after the date Debtor filed
for relief in bankruptcy and before the named Defendant
purchased the assets of Debtor. Consequently Plaintiff's
claim is a post-petition claim in Debtor's bankruptcy case
under 11 U.S.C. §507(a)(1).
17. At no time did the named Defendant contract for the
purchase of cheese product from Plaintiff on its own behalf.
Consequently the named Defendant is not a proper party to
Plaintiff's cause of action.
WHEREFORE, Defendant, I.F. Services, Ltd., respectfully
requests that this Honorable court enter judgment in its favor
and against the Plaintiff, Lucille Farms of Vermont, Inc., and
5
dismiss the Plaintiff's Complaint with prejudice, and further
award Defendant all such other relief as is proper and just.
Respectfully submitted,
& CHERNICOFF, P.C,
Date: May 19. 1999 Byu,?,, N J,n ?C.?•_tGn,
Paige Macdonald-Matthes, Esquire
I.D. #66266
2320 North Second Street
P.O. Box 60457
Harrisburg, PA 17106-0457
(717) 238-6570
(Attorneys for Defendant)
6
ROHRER$ STROMBOLI
MAY-14 99 IS., k* FRal.
-9 717 763 7751 ,
71?e365371
05/19/99 07:14 N :11111 NO:304
70:717 763 775. PAGE:10-
VERIFICATION
I, LBO Bloom, Prooldsnt of I.F, Services, Ltd,, ver::fy
that the atatemenra made in the Loregoing Answer with New
Matter are true and correct to the beat of my knowledge,
information and belief. I understand that false statements
herein are made subject to the penaltlee of uneworn
falsification to authorities.
Co'-'b V-4??
Leo Bloom,
Pres.dent, 1.F. Services, :.td,
Date, 5-l9 -q I
9
RECEIVED DATE : 05/14/99 15:01 FROM :7172385371
z0*d TQVT"gQL YJ -dTlno 7HildM7 NUiJNt-imnsi Wet rtl-al F5-5Y-JHW
E% H I B I T •A•
FEE-11-1998 1156 ERSKIN LtIV-wtrG MLM-K oau J(4.00(L r, jj,
Judy/ajM6mw 1.rgV2.10-96
MANAGEMENT, OPERATIONS AND
POST-PETITION CREDIT AGREEMENT
This Management, Operations and Post-Petition Credit Agreement is made this
day of February, 1998, by and among S-PRO CORPORATION, t/a Rohrer's Stromboli, a
Pennsylvania corporation ("Debtor" or "Borrower"), and IFS, LTD., a Delaware corporation
COIFS').
A. Debtor is in the business of producing strombolis and other filled food
products (the `Business").
B. In order to operate the business, the Debtor leases a facility located at 1302
Slate Hill Road, Building 3, Camp Hill, Pennsylvania (the "Facility"), and utilizes various
equipment and machinery located therein (the "Operating Assets').
C. On January 27,1998, the Debtor filed a Voluntary Petition for Relief under
Chapter 11 of the United States Bankruptcy Code (the' Petition') in the United States
Bankruptcy Court for the Middle District of Pennsylvania ("Bankruptcy Court') to Case No.
1-98- (the "Bankruptcy Cue 1.
D. Debtor remains in possession of its assets and is a Debtor-in-Possession
pursuant to Sections 1101,1107 and 1108 of the Bankruptcy Code.
Md-11-1 V, 11+7b o 9-1 ...c ?.anu„ia'r+cL.? A vow ...c w.+ ..a 11+
judykjPA row 1.20.1 "a
E. Prior to the filing of the Petition, the financial condition of the Debtor's
business deteriorated substantially, and the Debtor is unable to obtain unsecured credit to
continue its business operation.
F. Furthermore, certain disagreements have arisen among the shareholders of the
Debtor.
G. IFS has considerable experience in managing and operating financially
troubled businesses.
H. The Debtor and the Shareholders wish to benefit from IFS' experience in the
management and operation of the Business. In addition, IFS has agreed to provide credit
guaranties, subject to the terms and conditions set forth in this Agreement.
1. In order to keep the Business operating so that the Debtor can reorganize the
Business, the Debtor and IFS desire to enter into this Agreement according to the following
terms.
NOW, THEREFORE, intending to be legally bound hereby, the Debtor and IFS
agree as follows: .
1. Bad. The Background section of this Agreement is incorporated
herein by reference and is intended to be an integral part of this Agreement.
2. Management of the Business. On or after the Effective Date (as hereinafter
defined). IFS shall manage the operations of the Business. The Debtor and Shareholders hereby
2
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judy/cjp/ifsmunI U2.10.96
authorize IFS to take all reasonable actions to operate the Business during the term of this
Agreement. Such action shall include, without limitation:
(a) Developing and implementing a marketing sales program for existing
and new products.
(b) Developing new products and enhancing the quality of existing
products.
(c) Purchasing materials, inventory and supplies for the continued
operation of the Business.
(d) Supervising staff and employees.
(e) Organizing and restructuring production and operations.
3. Authorizations. The Debtor and the Shareholders shall execute appropriate
Resolutions and other documents reasonably requested to authorize IFS to proceed in accordance
with the terms of this Agreement.
4. Mamement Fee. As compensation for providing the management services
agreed to hereunder, IFS shall receive a management fee of Two Thousand Dollars (52,000.00)
per week. In seeking Bankruptcy Court approval of this Agreement, the Debtor shall
specifically-request that the management fee be payable weekly to IFS without further application
or approval of the Bankruptcy Court.
5. Credit Guaranties and Cash Adya=. Upon approval of this Agreement by
the Bankruptcy Court and subject to the terms of this Agreement, IFS shall make credit
3
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juJr1ejPr1Rmen I.:80.104t
guaranties and cash advances available to the Debtor on the following terms and conditions:
(a) In order to induce creditors to supply materials and provide services
to the Debtor during the Bankruptcy Case ("Post-Petition Suppliers"), IFS
shall provide credit guaranties to Post-Petition Suppliers in amounts which, in
the aggregate (including cash advances made pursuant to Section 5(f) herein),
shall never exceed an outstanding balance of Two Hundred Fifty Thousand
Dollars ($250,000.00).
(b) With respect to materials, supplies or services from Post-Petition
Suppliers to whom IFS has provided a credit guaranty, IFS shall issue its own
purchase order to such Post-Petition Supplier.
(c) Invoices for all product produced and sold after the Effective Date
shall be issued by IFS (the "Financial Invoices"). Customer shall be directed to
pay all funds directly to IFS based upon the Financial Invoices. From the funds
so collected, IFS shall pay the costs and expenses in the following manner and
priority: (i) Post-Petition Suppliers who have received credit guaranties; (ii)
reimbursement of cash advances; (iii) payment of interest, if any, due to IFS; (iv)
payroll and payroll taxes; (v) outstanding management fees; (vi) outstanding
extension fees; and (vii) operating expenses, including workers and
unemployment compensation, insurance, utilities, rent and approved professional
fees and costs of the Chapter 11 proceeding.
(d) ITS may decline to issue a credit guaranty if (i) an Event of Default
4
judykjp/Mma Logo-10.98
(as hereinafter defined) occurs; (ii) the aggregate amount of prior credit guaranties
outstanding is Two Hundred Fifty Thousand Dollars ($250,000.00) or more; or
(iii) IFS believes, in its reasonable discretion, that the Debtor's Business cannot
cause the Post-Petition Suppliers to be paid in the ordinary course of its
operations.
(e) IFS shall be paid a fee by the Debtor equal to three percent (30/6) of
each credit guaranty or cash advance extended hereunder ("Extension Fee').
Such Extension Fee shall be paid on a weekly basis based upon the credit
guaranties or cash advances issued during the prior week
(f) If IFS is required to pay a Post-Petition Supplier on a credit guaranty
or if IFS advances funds to the Debtor or on the Debtor's behalf, interest on such
outstanding advances shall accrue at the rate of one and one-half percent (1-1/2%)
per month. The principal advance and interest shall be due and payable from the
Debtor upon demand.
6. Secgdjy Interest As security for the payment of the credit guaranties and any
and all advances of principal or interest thereunder, the Debtor hereby grants to IFS a security
interest, lien, encumbrance, claim, right and interest to any and all of the Debtor's cash, accounts
receivable, inventory, materials, work in process, chosen in action and contracts (as such as
defined in the Bankruptcy Code) (the "Post-Petition Collateral'). Such liens shall be senior to
and enjoy priority over all other lienholders, claimants, creditors and any Trustee. Such security
interest is granted to the extent that ljeas previously exist on the Post-Petition Collateral
emo-11-rV.= 11-Dr V. Nu• ? Ax . .? ,. Lm , -W 41
1?Y??1?Rmanl.apt/2.I6A{
pursuant to Section 364(d)(1) of the Bankruptcy Code. To the extent that liens do not previously
exist on the Post-Petition Collateral, such security interest is granted pursuant to Section
364(c)(2). In the event that insufficient value exists in any Post-Petition Collateral, subject to
Bankruptcy Court approval, IFS is granted a super priority administrative claim pursuant to
Section 364(c)(1) of the Bankruptcy Code superior to all other administrative claims, except for
the claims of professionals and claims for fees owed to the United States Trustee's Office.
7. jjs of Credit Guaantiec, The credit guaranties will be used only in
connection with the Business and only for working capital purposes. Nothing contained herein
shall obligate IFS to advance or loan any funds directly to the Debtor for payment of any
working capital costs or expenses or other obligations.
8. Coo tion. The Debtor shall cooperate with IFS and assist IFS in
effectuating the terms and conditions of this Agreement.
9. Voluntary Termination. Except as otherwise provided in this Agreement, this
Agreement may be terminated by either party after thirty (30) days' written notice of termination
is provided to the other party.
10. No Further Documentation. Other than Bankruptcy Court approval of this
Agreement, no further documentation or moralizing the indebtedness of the Debtor to IFS under
the credit guaranties or perfecting IFS' security interests in the Post-Petition Collateral need to
be executed, exchanged, filed or recorded. Nevertheless, and to the extent so desired by IFS, the
Debtor shall request the Bankruptcy Court for modification of the automatic stay so as to allow
IFS to file UCC-1 financing statements or other documentation giving notice of and perfecting
6
FEB-11-1998 11:58 BPSKIN LE15PJIT1 FELLER
judykjp46man LagV2• I MI
IFS' security interest hereunder.
blU S(2 U671 P.td9i14
11. Condition to Credit Guaranties and Other Terms, Asa condition to the
effectiveness of this Agreement and the issuance of the credit guaranties, the Debtor shall seek
and obtain Bankruptcy Court approval for this Agreement, the compensation and fees to be
paid hereunder and the granting of the security interest to IFS, which Bankruptcy Court
approval shall be contained in an Order that is final and non-appealable ("Effective Date'),
except for emergency Orders approving credit guaranties and cash advances.
12. Debtor's Warranty. Debtor represents and warrants to IFS that JEFFREY
COICCK is the Debtor's authorized officer and has full power to bind the Debtor hereunder.
13. Affirmative Covenants. Until such time as the credit guaranties are paid in
full, the Debtor will:
(a) Maintain insurance coverage on its properties, the Facility and its
Business as presently are in effect
(b) Maintain, preserve and keep its properties in good repair, working
order and condition and make all necessary repairs, replacements, additions and
improvetnents thereto.
- -44 Maintain its corporate existence.
(d) Permit IFS and its duly authorized agents to make, or cause to be
made, inspections and audits of any books and records concerning the operations
and the post-petition Collateral granted hereunder. The Debtor shall keep its
books and records at the Facility.
7
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judykjPA&noe 1.60.10.93
(e) Provide to IFS the Debtor's prepared income statements and balance
sheets.
14. hlegagv_e_Cosenaats. Until such time as Debtor's obligations under the
credit guaranties are paid in full or except with IFS' prior consent in writing or as the
Bankruptcy Court may otherwise order, the Debtor will not:
(a) Enter into any merger, consolidation, partnership or joint venture of
any kind
(b) Create, incur, assume, suffer or permit to exist any lien upon the Post-
Petition Collateral, except those in existence prior to the date of this Agreement.
(c) Assume, endorse, be or become liable for or guaranty or become
surety for the obligations of any person or entity, except the endorsement of
negotiable instruments for deposit or collection in the ordinary course of business.
(d) Make or permit to be made any, material change of the nature,
character, conduct or legal character of the Debtor's business as conducted on the
date hereof.
15. Events of Default If any one or more of the following events shall occur
and continue aften (15) days after written notice thereof from IFS to Debtor (individually and
"Event of Default'), an Event of Default shall have occurred:
(a) Failure to make any payment of principal or interest with respect to
the credit guaranties when due; or
(b) Failure to pay obligations of Post-Petition Suppliers in a timely
8
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r. tai ar
1udy/clptl aftofl 1.402.10.92
fashion; or
(c) Failure by the Debtor to perform any other term, condition or
covenant of this Agreement; or
(d) Any representation or warranty made in writing to IFS in this
Agreement shall have been false in any material respect when made or thereafter
shall become false in any material respect; or
(e) The Bankruptcy Case shall be dismissed or converted to a case
under Chapter 7 of the United States Bankxuptcy Code or an interim or permanent
Chapter 11 Trustee shall be appointed to the Bankruptcy Case or there shall arise
any claim having priority over the super priority lien of IFS; or
(f) The Bankruptcy Court shall enter an Order granting relief from or
modifying the automatic stay of Section 362 of the Bankruptcy Code to allow any
creditor to execute upon or enforce a lien on the Post-Petition Collateral; or
(g) The Bankruptcy Court shall enter an Order superseding, amending,
staying, vacating or otherwise modifying its Order approving this Agreement, the
credit guaranties, the management and operations arrangement and/or the super
prioritylien.without IFS' prior written consent.
16. Remedies in the Event of the Occurrence of Any Event of Default. All
obligations, indebtedness and undertakings of IFS under this Agreement shall, at the option of
IFS, be eliminated and any and all indebtedness shall become immediately due and payable.
Furthermore, IFS shall not be required to issue any further credit guaranties or advance any
P,tz-L L-L 770 I L • D7
judykjp(ifaman LgV2• I0-p8
funds.
W..J1?U• 11.?r.V/,?r ?rrrr?l
17. Stipulation for Relief from Stav. IFS and the Debtor hereby stipulate that,
if there should occur an Event of Default under any of subparagraphs (e), (f) or (g) in Paragraph
15 above, then upon declaration by IFS and certification to the Bankruptcy Court that such an
Event of Default has occurred, the automatic stay under Section 362 of the Bankruptcy Code
shall immediately and automatically be modified so as to allow IFS to exercise any remedies
provided herein or at law or in equity regarding the Post-Petition Collateral. Otherwise, if there
should occur an Event of Default under subparagraphs (a), (b), (c) or (d) of Paragraph 15 above,
then IFS must apply for and obtain relief from the automatic stay of Section 362 of the
Bankruptcy Code. If relief from stay is granted, IFS shall be permitted to sell or otherwise
dispose of any and all Post-Petition Collateral in accordance with the Uniform Commercial
Code adopted by the Commonwealth of Pennsylvania and/or exercise any other right or remedy
hereby granted or existing.
18. No Oral Modifications: This Agreement may not be amended, waived or
modified in any manner except in writing duly executed and delivered by all of the parties
hereto.
- 19. GovemineLaw. This Agreement shall be construed and interpreted in
accordance with the laws of the Commonwealth of Pennsylvania disregarding any rules relating
to the chose or conflicts of laws and in accordance with the Bankruptcy Code.
20. Notices, Notices by one party to the other shall be in writing and shall be
deemed to be effective one (1) business day after the date of telecopy of facsimile transmission
10
FEB-11-1VW 11::)7 yrontn L[ t?rwt L r=""Mm oiu 011 o 14 r.a.,.•r
Judy/cjpA&nwJ.MtVS•Ione
or one (1) business day after the posting in the United States mail, postage prepaid, return receipt
requested, to the following address or to any alternate address duly designated in accordance
herewith:
To IFS: Leo Bloom
Rte. 183, Box 139
Summit Station, PA 17979
With copy to: Charles J. Phillips, Esquire
Baskin, Leisawitz, Heller & Abramowitch
2201 Ridgewood Road, Suite 400
Wyomissing, PA 19610
Fax: (610) 372-8671
To Debtor: S-Pro Corporation, t/a Rohrer's Stromboli
1302 Slate Hill Road, Building 3
Camp Hill, PA 17011
Fax: (717) 763-7751
With copy to: Robert E. Chernicoff, Esquire
Cunningham & Chernicoff
2320 North 2nd Street
P. O. Box 60457
Harrisburg, PA 17106-0457
Fax: (717) 2384809
21. B'ndi sect. This Agreement and any other documents or instruments
delivered or required to be delivered pursuant hereto shall inure to the benefit of and shall be
binding upon the parties hereto and their respective successors and assigns. None of the parties
hereto may assign its rights or obligations hereunder without the proper written consent of the
other parties. This Agreement further shall bind any Trustee appointed in this Bankruptcy Case
or any successor Bankruptcy Case of Debtor.
22. Cgynterparts. This Agreement may be executed in any number of
rCD?a a?LDDO •c•w orrv. ut u...w+.+.: .. ? ..w ... ... ..? .?
counterparts, each of which shall be deemed to be an original.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date and year first above written.
S-PRO CORPORATION, t/a Rohrer's Stromboli -
Debtor
By-
Tide:
IFS, LTD.
By
Leo Bloom, President
12
CERTIFICATE OF SERVICE
I, Robert E. Chernicoff, Esquire, hereby certify that on
February 11, 1998, a true and correct copy of the foregoing
EMERGENCY MOTION OF THE DEBTOR TO APPROVE POST-PETITION
FINANCING PROVIDING FOR SUPER-PRIORITY LIEN AND PROVIDING FOR
SUPER-PRIORITY ADMINISTRATIVE CLAIM STATUS AND TO APPROVE
MANAGEMENT AND OPERATIONS AGREEMENT was served by first-class
mail, postage prepaid, or by facsimile, on the following:
Office of the U. S. Trustee
Suite 503, 225 Market Street
Harrisburg, PA 17101
Internal Revenue Service
Special Procedures Section
P. O. Box 12051
Philadelphia, PA 19106
John J. Condrige, Senior Deputy
Attorney General
Office of Attorney General
Financial Enforcement Section
15th Floor, Strawberry Square
Fourth & Walnut Streets
Harrisburg, PA 17120
Anne K. Fiorenza, Esquire
Assistant U. S. Attorney
P. 0. Box 11754
Harrisburg, PA 17108-1754
PA Department of Revenue
Bureau of Compliance
Bankruptcy Division
Dept. 0946
Harr burg, PA 17128-0946
Robert Williams, President
Unitas Bank
15 South Main Street
P. O. Box 777
Chambersburg, PA 17201
i
Capital Region Economic
Development Corporation
214 Senate Avenue
Suite 605
Camp Hill, PA 17011
Karen A. Longenec_u_er, Esquire
601 Penn Street
P. O. Box 61
Reading, PA 19603-0061
(Attorney for CoreStates Bank)
and service was also made on the twenty (20) largest unsecured
creditors on the attached list.
S-Pro Corporation d/b/a Rohrer's Stromboli
Chapter it Case No. 1-98-00387
20 Largest j7naierured Creditors
Remco, Inc.
195 Hempt Road
Mechanicsburg, PA 17055
Packaging Service
P. O. Box 4175
Harrisburg, PA 17111
Ettline Foods
525 State Street
York, PA 17405-0563
Reiser, Robert & Co.
725 Dedham Street
Canton, MA 02021
Beeler Box Company
125 Sutton Road
Abbottstown, PA 17301
Package Printing Co.
P. O. Box 378
W. Springfield, MA 01090
Bellas Engineering
185 Le Tort Road
Millersville, PA 17551
Best Powerwash
% Rick Handyside
119 Harrisburg Pike
Dillsburg, PA 17019
Smetana & Kann Electric
P. O. Box 212
Plainfield, PA 17081
PNC Bank
Credit Cards
P. 0. Box 15397
Wilmington, DE 19886
Tuckey Mechanical Service
12 Stover Drive
Carlisle, PA 17013
Citterio USA Corp.
51-15 35th Street
Long Island City, NY 11101
Kesslers, Inc.
1201 Hummel Avenue
P. O. Box 126
Lemoyne, PA 17043
Domestic Uniform Rental
4100 Frankford Avenue
Philadelphia, PA 19124
Rhoads & Sinon
1 South Market Square
Harrisburg, PA 17108
Dana Brandt Insurance
154 Lefever Road
Newville, PA 17241
Fiorucci Foods, Inc.
1800 Ruffin Mill Road
Colonial Heights, VA 23834
Coventry Health & Life
Insurance Company
P. 0. Box 360326
Pittsburgh, PA 15251
Howard F. Groff Company
Petroleum-Rroducts
111 East State Street
Quarryville, PA 17566
Forklifts, Inc.
3925 Trindle Road
Camp Hill, PA 17011
IN RE:
S-PRO CORPORATION
d/b/a ROHRER'S STROMBOLI,
Debtor
CASE NO. 1-98-00387
CHAPTER 11
The Emergency Motion of S-Pro Corporation, t/a Rohrer's
Stromboli ("Debtor"), by and through its attorneys, Cunningham
& Chernicoff, P.C., to Approve Post-Petition Credit, Providing
for Super-Priority Lien and Providing for Super-Priority
Administrative Claim Status pursuant to Section 364(c) and
Section 364(d) of the United States Bankruptcy Code and to
Approve Management and Operation Agreement, is as follows:
1. On January 27, 1998, the Debtor filed a Petition
under chapter 11 of the United States Bankruptcy Code (the
"Code"). As a result thereof, the Debtor has been appointed
a Debtor-in-Possession and operates its business and manages
its assets.
2. The Debtor is in the business of manufacturing and
selling specialty food products and related items in the
Central Pennsylvania area.
3. The Debtor is indebted to Unitas Bank of
Chambersburg, Pennsylvania under and pursuant to several
advances made by Unitas Bank on which the Debtor is currently
indebted to Unitas in an amount in excess of $950,000.00.
(All obligations to Unitas Bank are hereinafter the "Unitas
Loan").
4. The Unitas Loan is secured by, among other items,
the Debtor's inventory, accounts receivable, equipment,
contracts and products and proceeds thereof as is evidenced by
appropriate UCC-11s.
5. The Debtor is further indebted to the Capital Region
Economic Development Corporation ("CREDC") for a loan made by
CREDO to the Debtor. This indebtedness is in the approximate
amount of $136,600.00. It is believed that the CREDC loan is
secured by, among other items, the Debtor's inventory,
equipment, accounts receivable, and products thereof,
including a purchase money lien on certain specific equipment.
The security interest of CREDC is evidenced by appropriately
filed UCC-1's and is subordinate to the lien of Unitas Bank as
to the Debtor's accounts receivables and inventory and non-
financed equipment. (The obligation of the Debtor to CREDC is
hereinafter the "CREDO Loan").
2
6. The Debtor is also indebted to CoreStates Bank
("CoreStates") for a loan made by CoreStates to the Debtor.
This indebtedness is in the approximate amount of $93,847.85.
CoreStates Bank may be secured on the Debtor's inventory,
accounts receivable and products thereof which security
interest is subordinate to that of Unitas Bank. The security
interest is believed to be evidenced by UCC-11s. (The
obligation of the Debtor to CoreStates Bank is hereinafter the
"CoreStates Loan").
7. As of the date of the Petition, the Debtor believes
that cash on hand, inventory and receivables totaled less than
$60,000.00.
8. On January 30, 19981 the Debtor filed a Motion for
Approval for Debtor to Utilize Cash Collateral and to Pay
Wages. By an order dated January 30, 1998, the court approved
such Motion.
9, The purpose of the Cash Collateral Motion is to
allow the Debtor to make payroll payments for wages earned
before the Petition date and to allow the Debtor to continue
to operate.
3
10. The Debtor is generally required to pay cash for all
supplies and materials which it needs. Further, the Debtor
has approximately 12 employees and has ongoing payroll needs
for such employees, together with employment taxes and
benefits thereon.
11. Despite the Court allowing the Debtor to continue to
utilize its cash collateral, the Debtor needs additional cash
because of certain cash flow difficulties. The Debtor did not
have sufficient inventory and receivables on hand as of the
Petition date to continue to generate new finished goods and
thereby produce additional receivables.
12. The Debtor has certain orders on hand and believes
that it can obtain further orders. The Debtor believes that
with sufficient cash, it can produce such orders and such
orders will prove to be profitable.
13. The Debtor has attempted to obtain financing and
funds necessary for its continued operations with such
financing and funds to be in the form of an unsecured creditor
as an administrative expense allowable under Section 503(b)(1)
of the Code, but the Debtor has been unable to do so.
4
14. The Debtor has been negotiating with IFS Limited
("IFS") regarding IFS providing credit guarantees to suppliers
and vendors to the Debtor, as well as IFS directly lending
funds and purchasing materials and supplies on behalf of the
Debtor.
15. The Debtor has entered into a Management, operations
and Post-Petition Credit Agreement (the "Agreement") with IFS.
The Agreement is attached hereto as Sahibit "All and made a
part hereof. The terms and consitions by which IFS will
provide the credit guarantees and Post-Petition Financing are
set forth in the Agreement.
16. As set forth in the Agreement, IFS is agreeable to
providing credit guarantees ("Credit Guarantees") as well as
cash advances and financing on a revolving basis ("Post-
Petition Financing" ), so long as IFS is provided with and
granted a lien on certain assets of the Debtor. These assets
of the Debtor consist of the Debtor's cash, accounts
receivable, inventory, materials, work in process, choses in
action and contracts (the "Post-Petition Collateral").
17. Because of the fact that little or none of the Pre-
Petition assets in the categories of the Post-Petition
collateral currently exist, and because the Post-Petition
Collateral will be created and enhanced by the Credit
5
Guarantees and Post-Petition Financing to be provided by iFS,
it is requested that such lien be granted pursuant to Section
364(d) (1) of the Bankruptcy Code to the extent that a lien
exists on the Post-Petition Collateral. To the extent that
liens do not previously exist on the Post-Petition Collateral,
such security interest is requested to be granted pursuant to
Section 364(c)(2) of the Code.
18. Further, to the extent that there is insufficient
value in the Post-Petition Collateral, IFS desires to be
granted a Super-Priority Administrative Expense Claim pursuant
to Section 364(c) (1) of the Code, with any such claim to have
priority over any and all administrative expenses of the kind
specified in Section 503(b) and Section 507(b) of the Code,
except for claims of professionals in the within case, and
except for quarterly fees payable to the office of the U. s.
Trustee.
19. The Credit Guarantees and Post-Petition Financing
shall be made by IFS Prom time to time as requested by the
Debtor up to a maximum of $250,000.00 in Credit Guarantees and
Post-Petition Financing. In order for the Debtor to meet its
immediate cash needs, the Debtor intends to request an advance
of $50,000.00 immediately (the "Emergency Advance").
6
20. Any advances of Post-Petition Financing will bear
interest at the rate of 1§% per month for which any such
advances are outstanding.
21. In addition, the Debtor finds itself in need of
certain management expertise and operational assistance.
Accordingly, as a part of the Agreement, the Debtor has
requested that IFS provide management and operational
assistance to the Debtor.
22. In return for providing the management and
operational assistance, IFS is to be paid a management fee of
$2,000.00 per week for each week that it provides such
assistance.
23. IFS has particular expertise in management,
particularly with respect to financially troubled entities.
The Debtor believes IFS is well qualified to provide such
expertise.
24. IFS has further indicated a desire to present an
offer to purchase the assets of the Debtor which offer is
currently being negotiated by the Debtor and IFS.
7
25. Without the providing of the Credit Guarantees and
Post-Petition Financing by IFS as set forth above, the Debtor
believes that it may have difficulty in operating. As set
forth above, the Debtor has attempted to obtain unsecured
credit and is unable to do so. Further, the Debtor has no
other current sources of funding. The Debtor believes that it
has orders on hand and can continue to solicit considerable
orders, however, without the funds to pay for materials and to
pay for labor, such orders cannot be completed.
26. IFS has no connection with the Debtor or the
shareholders or officers of the Debtor and is not an insider
or affiliate of the Debtor.
27. Unless the Debtor receives the extensions of credit
and Credit Guarantees under the Post-Petition Financing on an
immediate basis, the Debtor may suffer immediate and
irreparable harm pending a final hearing on this matter unless
the Court enters an Order approving the Agreement, including
the Credit Guarantees and Post-Petition Financing, and the
management and operations provisions of the Agreement on an
emergency basis.
28. If post-Petition Financing is approved, the Debtor
believes it has a strong likelihood of rehabilitation.
8
29. The Debtor will provide notice hereof to Unitas
Bank, CREDO, Corestates Bank, the Internal Revenue Service,
the Pennsylvania Department of Revenue, the U. S. Trustee's
Office and creditors who hold the 20 largest unsecured claims
in this case as to this filing and the request for a prompt
hearing and prompt relief hereunder.
30. It should be noted that the Debtor believes it does
not owe any Pre-Petition taxes.
31. Bankruptcy Rule 4001(c) (2) provides that this
Honorable Court may commence a final hearing on the within
Motion no earlier than fifteen (15) days after service of the
Motion unless and to the extent that the authorizing of the
credit requested herein is necessary to avoid immediate and
irreparable harm to the Debtors estate pending a final
hearing. As set forth above, the Debtor believes that unless
the Court sets a hearing sooner than the fifteen (15) days
from the date of service of this Motion that the Debtor will
suffer immediate and irreparable harm. Accordingly, it is
requested that a hearing be set as early as possible on this
Motion.
WHEREFORE, S-Pro Corporation, Debtor herein, respectfully
requests that the Court enter an Order:
9
(a) Setting an emergency hearing on this matter at
the earliest possible date as to the granting of the Credit
Guarantees and Post-Petition Financing and and the providing
of a lien on the Debtor's cash, accounts receivable,
inventory, materials, work in process, choses in action, and
contracts with such lien to be either under Section 364(d)(1)
of the Code or section 364(c) (2) of the Code, and to the
extent that insufficient Post-Petition Collateral exists to
secure the advancing of the Post-Petition Financing by IFS
Limited, that IFS Limited be provided with a super-priority
administrative claim expense having priority over all other
administrative claims, except for those of professionals and
for the United States Trustee's fees;
(b) Approving the Credit Guarantees and Post-
Petition Financing to be granted by IFS Limited, with IFS
Limited to be granted a lien and the administrative priority
as requested in the Motion on a final basis;
(c) Approving the management and operational
oversight and assistance of IFS Limited to the Debtor and the
terms and conditions thereof;
(d) Setting a final hearing, if necessary, in this
matter no later than fifteen (15) days from the data hereof;
and
10
Respectfully submitted:
C.
(e) Granting the Debtor such other and further
relief as is just and proper.
Date:
s Jo\daa\otlar\s-pco.4 f n
• w.caa ..vat,
Attorney I. D.
X
2
320 North Second Str
P. 0. Box 60457
Harrisburg, PA 17106-0457
(717) 238-6570
11
. w
IN THE UNITED ?TATEG AaAfxuriy?r[?v nnrrom
FOR THE MIDDi.F 11TCTRTCT OF PENNSY .vaxrn
IN RE:
S-PRO CORPORATION
d/b/a ROHRER'S ORIGINAL
STROMBOLI
Debtor
CASE NO. 1
CHAPTER 1
Harris-urg, P., I
MAR 2 1998
Of IhP e H? A Smith
?Olthe ?o..._. _
The Emergency Motion of the S-Pro Corporation d/b/a
Rohrer's Original Stromboli ("Debtor") to Approve Post-
Petition Financing, Providing for Super-Priority Lien and
Providing for Super-Priority Administrative Claim Status and
to Approve Management and Operations Agreement (the "Motion")
having come this day before the Court, and the court having
previously entered an order Scheduling Expedited Hearing;
Providing for Emergency Financing; Providing for Limited
Notice and Requiring Answer; and Notice of Hearing (the
"Emergency Order"), following Notice and no objections to the
Motion and Emergency order being filed, and for cause shown,
and in order to avoid immediate and irreparable harm to the
Debtor and its estate; it is
HEREBY ORDERED that:
1. The Motion is granted and the Emergency order shall
be deemed final.
2. The Credit Guarantees and Post-Petition Financing,
as defined in the Motion, is approved and authorized in the
principal amount of $250,000.00, on the payment and interest
terms set forth in the Motion.
r
3. IFS Limited as the Lender of the Post-Petition
Financing to the Debtor, is granted a lien on the Debtor's
Post-Petition cash, accounts receivable, inventory, materials,
work in process, choses in action and contracts (the "Post
Petition Collateral"), which lien shall be under and pursuant
to Bankruptcy Code Section 363(d)(1) to the extent that any
other entity has a lien on such Post-Petition Collateral and
to the extent that no prior lien exists on such Post-Petition
Collateral, then such lien shall be granted pursuant to
Section 363(c)(2). This lien shall be deemed perfected and
effective without any further filing by IFS Limited other than
this order.
4. To the extent that insufficient value exists in the
Post-Petition Collateral, then IFS Limited shall have a super-
priority claim pursuant to Bankruptcy Code Section 363(c)(1),
which claim shall have priority over any and all
administrative expenses of the kind specified in Sections
503(b) or 507(b) of the Bankruptcy Code, except for (a) claims
of professionals in the within case, (b) quarterly fees
payable to the Office of the United States Trustee, with whom
such administrative claim of IFS Limited shall stand on an
equal status.
5. The Debtor's utilization of the Lender for
management and operational services and assistance continues
to be approved upon the terms and conditions set forth in the
Motion.
6. On account of its Pre-Petition interest in cash
collateral, Unitas Bank shall be granted a second priority
lien on the Debtor's Post-Petition Collateral subject only to
the lien of IFS Limited. Such lien of Unitas Bank shall be
deemed perfected and effective upon entry of this Order
without any further filing by Unitas Bank other than this order.
2
7. To the extent that CoreStates Bank has an interest
in cash collateral Pre-Petition, CoreStates Bank shall have a
lien in the Post-Petition Collateral to such same extent,
subject to the prior lien of IFS Limited and the prior lien of
Unitas Bank. Such lien of CoreStates Bank shall be deemed
perfected and effective upon entry of this Order without any
further filing by CoreStates Bank other than this Order.
BY THE COURT:
rVrft6 erC?VF0&h d
Robert J. Woodside, Chief
MAR -p 1914 United States Bankruptcy Judge
Date:
3I0\docs\ordkrs\s-pro.ftn
3
CERTIFICATE OF SERVICE
I, Paige Macdonald -Mat thes, Esquire, do hereby certify
that a true and correct copy of the Defendant's Answer to
Plaintiff's Complaint, together with New Matter in the above-
captioned matter was placed in the United States Mail,
certified, return receipt delivery, postage prepaid in
Harrisburg, Pennsylvania on may 19, 1999, on the following:
Craig J. Staudenmaier, Esquire
Nauman, Smith, Shissler & Hall
200 North Third Street
P.O. Box 840
Harrisburg, PA 17108-0840
(Attorneys for Plaintiff)
Respectfully submitted,
CUNNINGHAM & CHERNICOFF, P.C.
Date: May 19. 1999 By:? ? a'Jv,
Paige Macdonald- Matthes, Esquire
I.D. #66266
2320 North Second Street
P.O. Box 60457
Harrisburg, PA 17106-0457
(717) 238-6570
(Attorneys for Defendant)
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LUCILLE FARMS OF VERMONT, INC.
Plaintiff
V.
I.F. SERVICES. LTD,
Ua Rohrer's Stromboli,
Defendant
IN TI-IL' COURT OF COMMON PLEAS
CUMBERLAND COUNTY, PENNSYLVANIA
NO. CIVIL 99-2822
CIVIL ACTION - LAW
PLAINTIFF'S RFPI Y To DEFE nwNI'S NEW MATTER
AND NOW comes LUCILLE FARMS OF VERMONT, INC., ("Lucille"), Plaintiff, by
its attorneys, NAUMAN, SMITH, SHISSLER & HALL, and files the following Reply to the
New Matter as set forth in Defendant's Answer:
8. The averments of Paragraphs 1 through 7 of the Complaint are incorporated by
reference as though more fully set forth herein.
9. Admitted.
10. Admitted in part and denied in parr, It is admitted that on March 2, 1998, the
Bankruptcy Court entered an Order approving a certain management agreement between S-Pro
Corporation d/b/a Rohrer's Stromboli and Defendant. It is denied that said agreement has any
relevance to the issues in this proceeding and it is further denied that Plaintiff had any knowledge
of the agreement or of Defendant's involvement in that agreement. As to the remaining
averments of Paragraph 10, they refer to a document which speaks for itself.
11. After reasonable investigation, Plaintiff is without knowledge or information
sufficient to form a helief as to the truth of these averments, and proof thereof is demanded. By
way of further reply, it is denied that Plaintiff had knowledge of the referenced Order and
agreement or of Defendant's involvement in said agreement. At all times relevant hereto,
Defendant acted in its own right in the purchase at issue, accepted the product purchased and
used it in its operations for its benefit. Furthermore, at all times relevant hereto, Defendant never
disclosed to Plaintiff that it was acting as an agent for an undisclosed principal nor did it apprise
Plaintiff of the existence of the agreement, that it was acting pursuant to the agreement, or that it
was acting only as an agent for another who was to be responsible for the purchase agreement.
Plaintiff acted in reliance upon Defendant's actions, representations and assertions and Plaintiffs
reliance was reasonable under the circumstances.
12. After reasonable investigation, Plaintiff is without knowledge or information
sufficient to form a belief as to the truth of these averments, and proof thereof is demanded. By
way of further reply, it is denied that Plaintiff had knowledge of the referenced Order and
agreement or of Defendant's involvement in said agreement. At all times relevant hereto,
Defendant acted in its own right in the purchase at issue, accepted the product purchased and
used it in its operations for its benefit. Furthermore, at all times relevant hereto, Defendant never
disclosed to Plaintiff that it was acting as an agent for an undisclosed principal nor did it apprise
Plaintiff of the existence of the agreement, that it was acting pursuant to the agreement, or that it
was acting only as an agent for another who was to be responsible for the purchase agreement.
Plaintiff acted in reliance upon Defendant's actions, representations and assertions and Plaintiffs
reliance was reasonable under the circumstances.
-2-
13. The averments of Paragraph 13 are denied. To the contrary, the purchase at issue
here was made by Defendant directly and the product purchase was accepted and used by
Defendant for its benefit. Additionally, at no time during the transaction did Defendant represent
or disclose to Plaintiff that it was acting as an agent for an undisclosed principal, that it was
acting pursuant to an agreement entered by the Bankruptcy Court, or that it was acting on behalf
of another pursuant to the terms of this agreement. At all times relevant hereto, Plaintiff acted in
reliance upon the actions, representations and assertions of Defendant that it was purchasing the
product in its own right and said reliance was reasonable under the circumstances.
14. After reasonable investigation, Plaintiff is without knowledge or information
sufficient to form a belief as to the truth of these averments, and proof thereof is demanded. By
way of further reply, the replies set forth in Paragraphs 11, 12 and 13 above are incorporated by
reference as though more fully set forth herein.
S. Admitted in part and denied in part. It is admitted that Defendant purchased the
assets of the Debtor. It is denied that this occurred on September 21, 1998. To the contrary, on
April 21, 1998, Defendant filed a purchase agreement with the Bankruptcy Court. Said
agreement was approved by the Bankruptcy Court on April 28,1998 and an Order allowing the
sale of personal property of the Debtor to Defendant was entered the same date. The purchase at
issue here occurred on June 6, 1998, approximately six weeks after the Court had approved the
purchase agreement and the Order allowing the sale. As to the remaining averments of
Paragraph 15, they are legal conclusions to which no responsive pleading is required.
-3-
16. Admitted in part and denied in part. It is admitted that purchase at issue occurred on
June 6, 1998 which is after the date of the filing of Debtor's petition. It is denied that said
transaction took place before Defendant purchased the assets of Debtor, said purchase agreement
having been approved by the Court April 28, 1998, approximately six weeks prior to this
purchase. It is further denied that Debtor's bankruptcy or the alleged agreement between Debtor
and Defendant has any relevance to the issue at this proceeding. The purchase at issue was made
by I.F.S. directly with Plaintiff. At no time did Defendant disclose that it was acting as an agent
for an undisclosed principal, that the transaction was subject to an agreement in the Bankruptcy
Court or that it was acting on behalf of another under said agreement. Furthermore, at no time
did Plaintiff have knowledge or the alleged agreement. To the contrary, Plaintiff acted in
reliance upon the actions, assertions, and representations of Defendant and said reliance was
reasonable under the circumstances. As to the remaining averments of Paragraph 16, they are
legal conclusions to which no responsive pleading is required.
17. The averments of Paragraph 17 are denied. The purchase at issue was made directly
between Plaintiff and Defendant, and Defendant is liable for the purchase price which it admits it
has not paid to Plaintiff. By way of further reply, the averments of Paragraphs I through 7 of the
Complaint and the replies set forth in Paragraphs 11 through 16 above are incorporated by
reference as though more fully set forth herein. As to the remaining averments of Paragraph 17,
they are legal conclusions to which no responsive pleading is required.
-4-
WHEREFORE, Lucille Farms of Vermont, Inc., Plaintiff, demands judgment in its favor
and against I.F. Services Ltd„ Ua Rohrer's Stromboli in the amount set forth in its Complaint.
NAUMAN, SMITH, SHISSLER & HALL
1 ?
By: i
Craig ' Staudenmaier, Esquire
SuU r e Court ID# 34996
200 North Third Street, P. O. Box 840
Harrisburg, PA 17108-0840
Telephone: (717) 236-3010
Counsel for Lucille Farms of Vermont, Inc.
-5-
1, Craig .1. Staudenmaier, Esquire, a member of the firm of Nauman, Smith, Shissler &
Hall, attorneys for Plaintiff, Lucille Farms of Vermont, Inc., in the foregoing proceeding, make
this verification on behalf of Plaintiff, and do state that as an attorney for Plaintiff, I am
authorized to make this Verification on behalf of it, and further state that, Plaintiff is presently
outside the court's jurisdiction and its Verification cannot be obtained within the time allowed
for filing, and further based on information provided to me by the Plaintiff, the facts set forth in
the foregoing Reply to New Matter of Defendant, are true and correct to the best of my
knowledge, information and belief. I understand that my statements are made subject to 18 Pa.
C.S. § 4904 providing for criminal penalties for unswom falsification to authorities.
Craig J. S &u enmaier, Esquire
Date: 0I E'i(Iq
-6-
CERTIFICATE OF SERVICE
AND NOW, this 8th day of June, 1999, 1, Craig J. Staudenmaier, Esquire, of the firm of
NAUMAN, SMITH, SHISSLER & HALL, counsel for Plaintiff, hereby certify that I have this
day served a true and correct copy of the foregoing Reply to New Matter of Defendant by first
class mail, postage prepaid, addressed to the parties or counsel of record as follows:
Paige Macdonald-Matthes, Esquire
2320 North Second Street
P. O. Box 60457
Harrisburg, PA 17106-0457
NAUMAN, SMITH, SHISSLER & HALL
By: V1 ?.?-
Craig J. St)i denmaier, Esquire
-7-
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