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Home My WebLink About10-24-14 FREY & TILEY ATTORNEYS-AT-LAW 5 SOUTH HANOVER STREET CARLISLE,PENNSYLVANIA 17013 ROBERT M. FREY RETIRED TELEPHONE(717)243-5838 STEPHEN D.TILEY stiley@freytiley.com FACSIMILE (717) 243-6441 ROBERT G. FREY rfrey@freytiley.com October 24, 2014 ry Lisa Grayson,Esquire _ o m Register of Wills of Cumberland County eC7->-1 cn Re: Vasiliki Mallios Estateoo c 21-10-0790 Dear Ms. Grayson: ,= M _. CZ) , I am writing to provide some background to you and the CourtKdministratd�for Perry County to hopefully assist in the delivery of the enclosed petition. Judge Morrow was previously appointed to hear matters in this estate. After a first and partial account was filed by the Executors, objections were filed by Kevin J. Hayes, Esquire on behalf of Metro Bank, the holder of two mortgages on the residence of the decedent. After the filing of these objections, Judge Morrow appointed Chrystal L. Prosser, Esquire as auditor concerning the account and the objections. Those objections are still pending. The enclosed Petition is submitted jointly by me on behalf of the Executors and by Ivo V. Otto, III, Esquire on behalf of the prospective purchasers of the decedent's residence. It is our hope that the relief requested may in whole or in part address the objections filed to the account. Although the relief requested is hoped to address some of the objections, we believe it is outside of the auditor's appointment and are, therefore, submitting it directly to the Orphans' Court,with a copy to the auditor so that she is aware of the status of proceedings. A draft of the Petition has been provided to Attorney Hayes for review prior to filing. He has indicated that he does not object to the filing of the Petition so long as it is understood that the matters raised by his objections are not prejudiced. Si cerely ours Robert G. Frey , RGF/ enc. Cc: Ivo V. Otto, III, Esquire Kevin Hayes, Esquire Chrystal L. Prosser, Esquire In Re: IN THE COURT OF COMMON PLEAS OF ESTATE OF CUMBERLAND COUNTY, PENNSYLVANIA VASILIKI MALLIOS, Desceased, ORPHANS' COURT DIVISION 9 No. 21-10-0790 PETITION 53 -0 I 1 AND NOW come Robert G. Frey, Esquire, attorney for Nickolas J:. MalliV and. 2 �= rn Constantinos J. Mallios, in their individual capacities and as the Executots of the Com) cin of Vasiliki Mallios (the "Estate"), and Ivo V. Otto III, Esquire, attorney"for DeVoe W. Green and Barbara L. Messner, and respectfully state as follows: 1. Vasiliki Mallios (the "Decedent") died testate on July 27, 2010 and letters testamentary were granted by the Register of Wills to her sons, Nickolas J. Mallios and Constantinos J. Mallios (the "Executors"). 2. Among the assets of the Estate was the Decedent's former residence having a mailing address of 224 Heisers Lane, Carlisle, Pennsylvania(the "Real Estate"). 3. The Real Estate is encumbered by a mortgage in favor of M&T Bank ("M&T"), Account Number 12044445032144998, having an approximate principal balance of $98,000.00, a mortgage in favor of Metro Bank, formerly known as Commerce Bank ("Metro"), Account Number 3058088, having an approximate principal balance of $23,000.00, and another mortgage in favor of Metro, Account Number 3002050, having an approximate principal balance of$243,000.00. 4. The Executors conveyed the Real Estate to themselves as part of a transaction to refinance and payoff other mortgages on the Real Estate. 5. Metro filed a Petition seeking the filing by the Executors of an interim Accounting of their activities as Executors of the Estate. 6. The Executors filed a First and Partial Account and Petition for Adjudication. 7. Metro filed Objections to the Account on January 13, 2014 which Objections are in regard, inter alia, to the payments on loans owed by the Decedent and one or more of the Executors, said loans being secured by mortgages on other real estate owned by the Decedent, and to the distribution of the Real Estate to the Executors in their individual capacities. 8. Executors filed an inheritance tax return in the above-captioned estate which valued the real estate at its contracted sale price,but did not pay the inheritance tax owed because of the lack*of funds in the Estate. 9. The Pennsylvania Department of Revenue appraised the value of the Real I Estate based on its assessed value as set by the Cumberland County Tax Assessment Office which was significantly higher than the value the Executors were able to negotiate for a sale of the Real Estate. 10. The Executors have entered into an Agreement of Sale to sell the Real Estate for the sum of$325,000.00 to DeVoe W. Green and Barbara L. Messner(herein "Purchasers"). A copy of which Agreement of Sale is attached hereto and incorporated herein by reference as Exhibit"A". 11. The Purchasers of the Real Estate have made payments to the Executors on account of the purchase price and for occupancy in the amount of$125,000.00. 12. The Executors have used these payments to pay off other obligations secured by liens on the Real Estate. 13. The Purchasers have secured all necessary financing for the purchase of the Real Estate as agreed in their Agreement of Sale. 14. The anticipated net proceeds of sale, after the payment of the aforementioned mortgage to M&T, but before the payoff to Metro is approximately $102,000.00, substantially less than the balance owed on the two mortgages held by Metro. 15. While the amount owed to Metro is greater than the expected proceeds of sale of the Real Estate, the Executors have reached an agreement with Metro whereby one of the Executors is willing to provide additional collateral to Metro in exchange for its agreement to release the lien of its mortgage on the Real Estate in exchange for payment to Metro of the net proceeds of sale of the Real Estate after the payment to M&T. . 16. Each the Executors, in his individual capacity, executed a Release and Indemnification whereby each has agreed to refund to the Estate any portion of the distribution of Real Estate to him which exceeded the amount to which he was entitled; 17. Each the Executors, in his individual capacity, agrees that the distribution to him should be entirely refunded to the estate because the unpaid obligations of the Estate exceed the value of the Real Estate distributed; and 18. The Executors are unable to provide clear title to the Purchasers unless an Order is entered by this Honorable Court,having the effect of a judicial sale, authorizing the sale free and clear of the obligation owed to the Department of Revenue for the payment of inheritance taxes. 19. If the terms of this Stipulation are not entered as an Order of Court and the proposed sale is not consummated, the Real Estate is in danger of being foreclosed by one or more of the mortgage holders. 20. A foreclosure would subject the parties to the risk that additional costs would be incurred and that the sale price maybe diminished,resulting in less proceeds available to creditors. 21. A foreclosure would cause significant harm to the Purchasers who have paid substantial funds on account of the purchase price,which funds are not available to be refunded to them in the event that settlement is not consummated. 22. In the event of foreclosure, there is no reasonable expectation that any funds would be available to pay on the unpaid inheritance tax obligation owed to the Pennsylvania Department of Revenue. 23. Ivo. V. Otto, III, Esquire, by execution below, enters his appearance in the above-captioned matter on behalf of the Purchasers, DeVoe W. Green and Barbara L. Messner, and joins in the within Petition to signify the concurrence of the Petitioners to the statements contained in this Petition and the relief requested. 24. The undersigned respectfully request that a Rule be issued upon the Pennsylvania Department of Revenue and Metro to Show Cause why the sale of the Real Estate to the Purchasers should not be approved on the following terms: A. Each of the Executors, in his individual capacity, shall join with the Estate in the conveyance of the Real Estate, and each Executor, in his individual capacity, shall release to the Estate any interest in the proceeds of sale, pursuant to the Release and Indemnification Agreement; B. The mortgage obligation to M&T Bank, account number 12044445032144998, shall be paid in full from the proceeds of sale. C. The mortgage obligation to Metro Bank, account number 3058088 shall be paid in full from the proceeds of sale. D. The balance of the sale proceeds shall be paid to Metro Bank to pay down the amount owed on account number 3002050. E. The sale shall have the effect of a judicial sale as to the discharge of all other liens upon the real estate,including the inheritance tax obligation to the Pennsylvania Department of Revenue. Respectfully Submitted, Date: Ov 2 3 2Ol B �1 I y' Robert G. Frey, Esquire Supreme Court Number 46397 5 South Hanover Street Carlisle, Pennsylvania 17013 (717)243-5838 Attorney for the Executors, in their individual capacities and as Executors of the Last Will and Testatment of Vasiliki Mallios B Date: \ �p �3�r � Y Ivo V. Otto III,Esquire Supreme Court Number 27763 10 East High Street Carlisle,Pennsylvania 17013 (717) 243-3341 Attorney for Purchasers