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Home My WebLink About04-05-12F:\FQ.ES\Climta15844 Mumma Eetatel5B44.19 AccaunW alld I)imibution Tfusta\5844.19.Petitlon.Planof Liquidedon.4.4.12..wpd No V. Otto, III, Esquire I.D. No. 27763 George B. Faller, Jr., Esquire I.D. No. 49813 Jennifer L. Spears, Esquire I.D. No.87445 MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Lisa M. Morgan „_ ~k QF .i %~i2 APR -S PPS 3~ Q I ORPHANRS COURT 1MRFR!_ ~~'D ~'~ , pA IN THE COURT OF COMMON PLEAS OF IN RE: :CUMBERLAND COUNTY, PENNSYLVANIA Estate of Robert M. Mumma, Deceased. N0.21-86-398 ORPHANS' COURT DIVISION PETITION TO AUTHORIZE PLAN OF LIQUIDATION Lisa M. Morgan, Trustee under the will of Robert M. Mumma, Sr., respectfully petitions this Court for an Order authorizing a plan for the sale of certain assets of the Martial Trust and Residuary Trust, as follows: 1. Petitioner is Lisa M. Morgan ("Mrs. Morgan"), formerly a Co-Executrix of the above estate (the "Estate") and currently the sole Trustee of the Marital Trust (the "Marital Trust") and the Residuary Trust (the "Residuary Trust") under Mr. Mumma, Sr.'s will. 2. Respondents Robert M. Mumma II ("RMM II"), Barbara M. Mumma ("Babs Mumma"), and Linda Mumma ("Linda Mumma") are, along with Mrs. Morgan, remaindermen of the Marital Trust and the Residuary Trust. 3. Robert M. Mumma, Sr., died on April 12, 1986. 4. Barbara McK. Mumma ("Mrs. Mumma") was named, along with Mrs. Morgan, a Co-Executrix of the Estate and Co-Trustee of Marital and Residuary Trusts. 5. Mrs. Mumma and Mrs. Morgan filed Interim and Final Accounts of their actions as Executrices of the Estate from the date of Mr. Mumma, Sr., through the closing of the Estate on September 30, 2003. 6. Mrs. Mumma and Mrs. Morgan also filed interim accounts for the Marital and Residuary Trusts for all periods from their inception through and including December 31, 2003. 7. In September 2010, Mrs. Morgan filed accounts for the Trusts for the period from January 1, 2004, through and including that of Mrs. Mumma's death on July 17, 2010. 8. Mrs. Morgan also filed Petitions for Adjudication and Audit or Confirmation for the Marital and Residuary Trusts. 9. RMM II, and Babs Mumma filed Objections to all of the accounts filed by Mrs. Mumma and Mrs. Morgan. 10. The Court referred all objections to Auditor Joseph D. Buckley, Esquire ("Auditor Buckley"). 11. Beginning in April 2009, and continuing over more than 40 days ending in June 2011, Auditor Buckley presided over hearings with respect to the Objections filed by RMM II and Babs Mumma. 12. Auditor Buckley's hearings have been concluded, and it is anticipated that an Auditor's report will be filed in due course. 13. Attached as Exhibit "A" is a Summary of Appraisals, identifying the various parcels of real property in which the Trusts hold interests, either directly or through ownership by the Trusts of interests in various entities, as well as the values of such real estate as of July 17, 2010. 14. The Residuary Trust owns an undivided 81.82507% interest in atenancy-in-common known as Mumma Realty Associates I ("MRA I"). The other owners of MRA I and their percentage interests are as follows: RMM II 4.24708% Linda Mumma 4.23555% Babs Mumma 4.23555% Lisa M. Morgan 4.23555% Estate of Barbara McK. Mumma 1.22120% 15. Mrs. Morgan, individually and together with her holdings in her representative capacities as Trustee of the Residuary Trust and Executrix of Mrs. Mumma's Estate, is the majority-in-interest owner of MRA I, with an aggregate ownership of 87.28182%. 2 16. The Residuary Trust also owns an undivided 98.08612% interest in a tenancy-in-common known as Mumma Realty Associates II ("MRA II"). The other owners of MRA II and their percentage interests are as follows: RMM II 0.47847% Linda Mumma 0.47847% Babs Mumma 0.47847% Lisa M. Morgan 0.47847% 17. Mrs. Morgan, individually and together with her holdings in her representative capacities as Trustee of the Residuary Trust and Executrix of the Estate of Barbara McK. Mumma is the majority in interest owner of MRA II, with an aggregate ownership of 98.56459.%. 18. Mrs. Morgan, in her representative capacity as Executrix of the Estate of Bazbaza McK. Mumma, is the sole shareholder, director and officer of Mumma Realty Associates, Inc., ("MRA, Inc."), and the manager of the assets of both MRA I and MRA II, as appointed under certain Agreements Among Tenants in Common entered into by the holders of the interests in MRA I and MRA II. 19. The bulk of the assets of MRA I and MRA II are in the form of numerous parcels of real estate. 20. The real estate owned by MRA I appears on Exhibit "A" as items 10, 11, 12, 13, 15, 16,17,18, 19, 20, 21, 22 and 23. 21. The real estate owned by MRA II appears on Exhibit "A" as item numbers 9 and 14. 22. The Residuary Trust also owns two parcels of real estate, set forth as item numbers 24 and 25 on Exhibit "A", and a parcel of real estate in Leadville, Colorado having an appraised value as of $670,000.00. 23. The Marital Trust owns: a. 50% of the stock of Union Quarries, Inc., a Pennsylvania corporation ("UQ"). The remaining 50% is held by third parties unrelated to the Mumma family and their affiliates. b. Real estate known as Pennsboro Center in Cumberland County, Pennsylvania. This real estate is set forth as item number 2 on Exhibit "A". 3 24. The Marital Trust owns 27.192650% of the stock of D-E Distribution Corporation, a Pennsylvania corporation ("DE"). The other shazeholders of DE and their percentage interests are as follows: Estate of Bazbaza McK. Mumma 16.930560% RMM II 14.03015% Linda Mumma 13.948925% Babs Mumma 13.948925% Lisa M. Morgan 13.948925% 25. Mrs. Morgan, individually and together with her holdings in her representative capacities as Trustee of the Marital Trust and Executrix of the Estate of Bazbaza McK. Mumma is the majority shazeholder in DE, with an aggregate ownership of 58.072135% of the stock of DE. 26. As a result of Mrs. Mumma's passing, Mrs. Morgan is now the sole member of the Board of Directors of DE, and its sole authorized officer. 27. DE's assets consist of three pazcels of real estate, accounts receivable from various affiliated entities, some tangible personal property in the form of fully depreciated equipment of minimal value and certain life insurance policies having cash values collectively of approximately $2, 033,64.00. DE's real estate is set forth on Exhibit "A" as items 5, 6 and 7. 28. The Marital Trust also owns 80.1296% of the stock of G-A-T Distribution Corporation, a Pennsylvania corporation ("GAT"). The other shazeholders of GAT and their percentage interests are as follows: Estate of Barbara McK. Mumma 17.95652% RMM II 0.47847% Linda Mumma 0.47847% Babs Mumma 0.47847% Lisa M. Morgan 0.47847% 29. Mrs. Morgan, individually and together with her holdings in her representative capacities as Trustee of the Marital Trust and Executrix of the Estate of Barbara McK. Mumma is the majority shazeholder in GAT, with an aggregate ownership of 98.56459% of the stock of GAT. 4 30. As a result of Mrs. Mumma's passing, Mrs. Morgan is now the sole member of the Board of Directors of GAT, and its sole authorized officer. 31. GAT's assets consist of one pazcel of real estate and an escrow account held for the benefit of RMM II as a result of a certain lawsuit by RMM II asserting dissenters' rights with respect to the sale of certain of GAT's assets. 32. GAT's real estate is set forth as item number 8 on Exhibit "A". 33. The Marital Trust's other assets consist of various loans receivable due from several affiliated entities. 34. As the bulk of the assets of the Marital Trust and the Residuary Trust aze real estate (and, in the case of the Residuary Trust, interests in MRA I and MRA II, and in the case of the Marital Trust, interests in DE and GAT, which in turn aze each composed largely of real estate), the Martial Trust and Residuary Trust, while having substantial net worth, aze illiquid. 35. The real estate owned by the Marital and Residuary Trusts, DE, GAT, MRA I and MRA II, and, in particulaz improved real estate, requires substantial ongoing capital expenditures. 36. Mrs. Morgan has advised RMM II, Babs Mumma and Linda Mumma that no substantial assets of the Trusts would be sold or otherwise disposed of absent the approval of Your Honorable Court. 37. Mrs. Morgan, in an effort to determine the preferences of the remaindermen of the Trusts with respect to the disposition or distribution of the assets of the Trusts, has, on several occasions solicited input from the remalndermen. The remaindermen have, however, been substantively unresponsive to such solicitations. 38. Given the lack of liquidity in the Trusts, the substantial financial obligations of the Trusts, and the history of contentious litigation surrounding the assets of the Trusts and Mr. Mumma, Sr.'s Estate, Mrs. Morgan believes it appropriate that all of the real estate in which the Trusts hold an interest (either directly or through DE, GAT, MRA I and MRA II), be sold, with the net proceeds to be distributed as provided in the will of Robert M. Mumma Sr. 39. Mrs. Morgan further desires to liquidate the various policies of life insurance held by DE by surrendering the same for the cash values thereof. 5 40. Accordingly, Mrs. Morgan seeks an order from Your Honorable Court authorizing her to engage a third party, experienced in the sale of real estate, to conduct an orderly exposure of the real estate owned by the Trusts, DE, GAT, MRA I and MRA II, to the market, for ultimate sale, with the net proceeds to be so distributed, and further to surrender the life insurance policies held by DE for the cash value of such policies, thereby providing liquidity in the interim until the Trust's assets may be converted to cash for ultimate distribution. WHEREFORE, for the foregoing reasons, Mrs. Morgan respectfully requests that this Court issue a Rule to Show Cause upon Robert M. Mumma, II, Barbara M. Mumma and Linda Mumma to show why the relief requested should not be granted. Respectfully submitted, Bye ~ ~~l C-J No V. Otto, III, Esquire I.D. No. 27763 George B. Faller, Jr., Esquire I.D. No. 49813 Jennifer L. Spears, Esquire I.D. No.87445 MARTSON LAW OFFICES 10 East High Street Carlisle, PA 17013 (717) 243-3341 Brady L. Green, Esquire MORGAN, LEWIS & BOCKIUS LLP 1701 Market Street Philadelphia, PA 19103-2921 (215)963-5079 Attorneys for Lisa M. Morgan Date: April 5, 2012 6 ~~ i p M pO~~ E d~ M > ~ ~ N~N ~ ~ ~ ~ ~ y~~ ~ ~ ~ ~ ~x ~ N N N N N N r ' ~ ~ ~a ~ ~ ~ ~ > ~ ~ ~ a ~ 9 r ~ _ 4 ~ „, ~ r ~ y ~ ~ ~ ~a ~ ~ ~~~~~~~ ~QQQp d~` ?adQ fi Q ~q+g f~ Qyg ~ ~g !a8~ q N `~ QQ ~3 ~ $~ ~ ~ ~ Q ~{ Q Q Q Q eeQQ Q ~b2SZS,~~~ Ob YQ g r r dA ~ ~ ~ ~~~~~~~ C, w ~~ 7 ty ~ ~ ~ ~ i ~ ~ ~ F+ F+ ~ F a !"~ a l y ~ 's ,i a ~ ~ ~ ~ ~ ~ ~a ~ fA N ~ ~ ~ ~ a ~ ~ ~a ~ ~ ~ u ~ ~ < ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ •~ N ~ ~ e ~ N a b W G ~ e V1 y ~i w.~ ~ rj ~ v~ 1t p 3~ d a d d d d d d d r r r r r re r N N1 • N ~D t~ OD O~ w~i r r .~.~ ~ ~ EXHIBIT "A" i s ~ ~ ~ ~ ~ ~ ~ N ._~ ~ ~ ~~~~~~~~ ~ ~ .. ~ ~ N ~ a .~ 0 ~~~~ ~~ ~~~,, ~ .. ~ ~a~~~~~ 5 ~ ~ ~ ~ ~ ~ ~ ~~~~~M ~~~~~ ~~ .... ~ ./~ .mow wow rpa w~., O N N ~ ~ ni t VERIFICAnO1~I The foregoing Petition to Authorize Plan ofLiquidation ins bawd upon iutform~ationwbichhas been gathered by my counsel in the pr~ation of the lawsuit The language ofthe document is that of counsel and not my own. I have read the document and to the cxte~at that it is based upon information which I have given to my counsel, it is true and correct to flee best of my lgnowlalge, information and belief. To the extent that the content of the document is that o£ counsel, I have relied upon counsel in malring this verification. This staEemextt and verification are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsif cation to authorities, which provides that if I make knowingly false averments, I may be subject to criminal penalties. is& M. Morgan CERTIFICATE OF SERVICE I, Tricia D. Eckenroad, an authorized agent for Martson Deardorff Williams Otto Gilroy & Faller, hereby certify that a copy of the foregoing Petition to Authorize Distribution was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: John Kerr, Esquire 5020 Ritter Road Suite 104 Mechanicsburg, PA 17055 Mr. Robert M. Mumma, II 6880 S.E. Harbor Circle Stuart, FL 34996-1968 Robert M. Mumma, II 840 Mazket Street Suite 33333 Lemoyne, PA 17043 Ms. Bazbaza M. Mumma 541 Bridgeview Drive Lemoyne, PA 17043 Ms. Linda M. Mumma P.O. Box 30436 Bethesda, MD 20824 Joseph D. Buckley, Esquire 1237 Holly Pike Carlisle, PA 17013 MARTSON LAW OFFICES Y Tricia . Eckenr ~ Ten East High Street Cazlisle, PA 17013 (717) 243-3341 Date: Apri15, 2012 ~„ ~, ~~ ,