HomeMy WebLinkAbout07-27-93
1 (Whereupon, the testimony of Donald J.
2 Trufant and Robert M. Mumma, II, appears as
3 follows:)
4 THE COURT: Now I guess we'll hear from
5 Robert Mumma, II. He's joined in the petition requesting an
6 injunction.
7 MR. FARRELL: Your Honor, if it please the
8 Court, I would like to call as our first witness Donald
9 Trufant.
10 MR. SONNENFELD: Your Honor, may I ask for an
11 offer of proof?
12 MR. FARRELL: Your Honor, Mr. Trufant will
13 testify to the fact that he has had recent conversations
14 with Robert Mumma concerning his ability to purchase the
15 businesses that are the subject of the sale before the Court
16 today.
17 THE COURT: What is this gentleman's
18 occupation?
19 MR. FARRELL: He's a banker with Mercantile
20 Bank, and he is prepared to testify as to Mr. Mumma's
21 ability and willingness to acquire the assets that have been
22 sold.
23 THE COURT: Okay. Rather than exclude this
24 testimony based on not being relevant, I'm going to hear it,
25 and it would be much easier for me to eliminate it later on
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if it's not.
MR. SONNENFELD: Thank you.
THE COURT: You have an objection from that
standpoint, but I'm going to hear it. Go ahead.
Whereupon,
DONALD J. TRUFANT
having been duly sworn, testified as follows:
DIRECT EXAMINATION
BY MR. FARRELL:
Q Mr. Trufant, state your name for the record,
please.
A Donald J. Trufant.
THE COURT:
THE WITNESS:
BY MR. FARRELL:
Q And where do you reside?
A Baltimore, Maryland.
Q Are you employed?
A Yes, by the Mercantile-Safe Deposit and
Spell your last name, sir.
T-r-u-f-a-n-t.
Trust.
Q And what's your position with Mercantile?
A Senior Vice President.
Q And how long have you been employed by them?
A Twenty years.
Q And essentially what are your functions there
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decedent?
A
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1 recently conversations with Robert Mumma concerning those
2 same businesses?
3 A Yes, sir.
4 Q And what has been the nature of those
5 conversations?
6 A He is requesting that Mercantile come up with
7 a financing proposal that will allow him to purchase the
8 assets of pennsy Supply and the affiliated companies.
9 Q Okay. And do you have in front of you now at
10 this point sufficient information to make a decision in that
11 regard?
12 A No, sir.
13 Q And what exactly would you need in order to
14 make an informed decision?
15 A Well, we would like more detailed information
16 on the cash flows, but more importantly we'd like the
17 information on the stone reserves in the quarries, and
18 that's not available to us, and I really need that in order
19 to make a firm decision.
20 Q Now, I realize that you don't have in front
21 of you sufficient information to make a binding commitment
22 at this point, but based on a preliminary determination,
23 what is your assessment?
24 A Oh, yes, based upon the preliminary
25 information that we have, I think we can come up with a
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funding proposal that will allow Bob to buy the company.
Q Now, you say to buy the company. Are you
familiar with the terms of an offer that now exists for
those businesses?
A I know there was an offer of approximately
thirty-two million dollars.
Q So when Mr. Mumma was discussing with you the
terms of his proposal acquisition, was that the framework in
which you were working?
A Yes.
Q Can you state for the Court whether or not,
in your opinion, Mr. Mumma has the financial ability to
acquire the assets?
A Based upon the preliminary information that I
have, I would say yes.
Q Okay. And your answer is qualified in that
only by the additional information that you would require?
A Yes.
Q If you received that information, how long
would it take you to make a final decision?
A We should be able to come up with something
within sixty days.
Q Could you do it earlier than that if this
Court so directed?
A It depends on the information that would be
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1 made available to us by the seller.
2 Q In other words, if this Court directed the
3 sellers to fully supply you with the information that you
4 needed, you could probably do it in a time frame shorter
5 than sixty days?
6 A Yes.
7 Q Again, though, based on what you have now, is
8 there any reason for you to believe that Robert Mumma could
9 not acquire the businesses on the terms that now exist from
10 the foreign investors?
11 MR. SONNENFELD: Objection, leading, Your
12 Honor.
13 THE COURT: Overrule the objection. You may
14 answer the question.
15 THE WITNESS: Based upon the preliminary
16 information that I have, I see no reason why we couldn't
17 fund it for Bob.
18 MR. FARRELL: Your Honor, I have no further
19 questions.
20 THE COURT: Just for my information, where is
21 your office located?
22 THE WITNESS: Two Hopkins Plaza, Baltimore,
23 Maryland.
24 MR. SONNENFELD: May I have one moment to
25 confer with my client, Your Honor?
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THE COURT: Go ahead.
CROSS-EXAMINATION
BY MR. SONNENFELD:
Q When did Mr. Mumma approach you about his
interest in borrowing funds from your bank to acquire the
Pennsy Supply businesses, sir?
A I had a meeting with Bob last Thursday.
Q Okay. So that would be Thursday the --
THE COURT: 22nd.
MR. SONNENFELD: 22nd of July? Thank you,
Your Honor.
THE WITNESS: Yes, sir, I believe that's
correct.
BY MR. SONNENFELD:
Q Do you have an ongoing business relationship
with Bob?
A No, sir, we do not.
Q He's not a customer at your bank?
A No. We have called on him several times
trying to get him to become a customer, but he is not a
customer at the present time.
Q Has he ever been a customer of your bank?
A No, sir.
Q Had you had any contact with Bob since this
event you told us about some ten years ago with the decedent
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and last Thursday?
A Oh, yes, I have. Bob was our guest at the
all-star game that was, I guess, July 13th, and I made
several calls on Bob at his other corporate capacity, as
president of another company or chairman of another company.
Q Would it be correct to say that between the
time of the event with the late Mr. Mumma some ten years ago
and last Thursday, you have had no business dealings with
Mr. Mumma, Mr. Bob Mumma?
A No, we have no business dealings with him.
Q And the all-star game and the other contact,
that was marketing efforts by you on behalf of your bank?
A Absolutely.
Q Now, when Mr. Mumma met with you last
Thursday, how long did that meeting take?
A Oh, golly, I think it was about two and a
half hours, sir.
Q Where did that meeting take place?
A At Buchanan Ingersoll's offices in
Harrisburg.
Q Was anyone else present?
A Yes.
Q Who was present?
A Gerry Morrison.
Q Anyone else present?
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1 A One of my people was there at the same time,
2 and I believe John Thomas was there.
3 Q Who is Mr. Thomas?
4 A I believe he's an employee or partner of Mr.
5 Mumma.
6 Q Who set up that meeting?
7 A I believe Gerry Morrison did.
8 Q Did he tell you he set up that meeting?
9 A All he said was that Bob Mumma -- there was
10 an opportunity for us to do some financing for Bob Mumma and
11 could I meet with them in Harrisburg. I cancelled some
12 appointments, and I did.
13 Q Okay. When did Mr. Morrison first contact
14 you concerning that meeting?
15 A It was the day before our meeting. I believe
16 it was Wednesday. He didn't contact me directly. He
17 contacted my office. He called my office and they arranged
18 the appointment, and I told them I would be there at 8:30 on
19 Thursday morning.
20 Q Did you know Mr. Morrison before?
21 A Yes.
22 Q You had business dealings with him?
23 A Yes.
24 Q Now, did you review any financial statements
25 from Mr. Mumma?
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A We've had some personal financial statements
on Mr. Mumma. I did not review anything on Pennsy Supply.
Q You said you've had some personal financial
statements?
A Yes.
Q How recent were those personal financial
statements?
A They were 1991. We do not have the 1992's.
Q So the most recent financial information you
had on Mr. Mumma was 1991 financial statements?
A Um-hum. Yes, sir.
Q And did you review that in connection with
your meeting with Mr. Morrison on Thursday?
A No, we did not.
Q Did you review it before or after the meeting
in connection with this interest of Mr. Mumma in acquiring
the Pennsy Supply businesses?
A To be honest with you, I was more interested
in the details of the company and the assets being acquired.
The reserves and the cash flows generated by the companies
were of greater interest than Bob's personal net worth.
Q Did you bring Mr. Mumma's financial statement
with you today?
A
Q
No, sir, I did not.
You said that you're the senior vice
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1 president of the bank?
2 A Yes, sir.
3 Q And your responsibilities include, if I heard
4 you correctly, leverage buyouts?
5 A Yes.
6 Q Will you tell us what a leverage buyout is?
7 A A leverage buyout is basically where the
8 equity capital is minor compared to the debt.
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16 Baltimore Orioles, and if you're looking at that, there are
17 certain rules put together by the American League that
18 forces them to certain debt to equity ratios. It would
19 depend on the corporate structure.
20 Q Would it be fair to say -- and I'm not an
21 experienced banker, so if I misstate it, please bear with
22 me. Would it be fair to say that in a leverage buyout, the
23 buyer borrows against the assets that are being acquired?
24 A I think that's a true statement, sure.
25 Q And would it be fair to say that in a
Q Where the equity I'm sorry, sir.
A Where the equity is light and the debt is
heavy.
Q What sort of debt is involved in leverage buy
outs?
A Well, it depends on the asset that you're
talking about. Each asset will vary. Frankly, we fund the
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leverage buyout the buyer puts up a small percentage of
equity and the bulk of the financing is in terms of
borrowing secured by the assets being acquired?
A I think what you're assuming here is that
there will be little or no equity in this particular
transaction.
Q Let's take it one step at a time.
A We have not --
MR. FARRELL: Your Honor, we'd ask that he
let the witness finish.
THE WITNESS: We have no pro forma balance
sheets. We have not seen the quarry reserves. We have not
seen the equipment lists. until we can see what the equity
is going to be and what the assets are going to be, then we
can come up with a pro forma balance sheet and find out what
equity will be required.
BY MR. SONNENFELD:
Q Perhaps you misunderstood my question, sir.
I wanted to make sure we were using a common vocabulary
before discussing the specifics of this contemplated
transaction, and I'm trying to see right now in referring to
leverage buyouts if you and I are using the term in the
same way. We'll then come to discussing this transaction in
particular.
A You're aSking me specifics. You're aSking me
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1 to guess without giving me the specific collateral that we
2 will use on a loan to back up a loan.
3 Q Well, let me take it one step at a time. Is
4 it correct to say that in a leverage buyout, some portion
5 of the purchase price is financed by a loan which in turn is
6 secured with the assets being purchased?
7 A That's true.
8 Q And some portion of the purchase price is
9 actual equity put up by the purchaser?
10 A That's true.
11 Q And the percentage may vary from deal to
12 deal?
13 A True.
14 Q And transactions differ. Some leverage buy
15 outs there is little equity and some there is greater
16 equity, is that correct?
17 A True.
18 Q Is it correct that a leverage buyout would
19 include the purchase of assets?
20 A Not necessarily, no.
21 Q Leverage buyouts could be the purchase of
22 assets, could it not, sir?
23 A It could be assets. It could be stock. It
24 could be a number of things.
25 Q Or a combination of assets and stock?
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A Sure. Um-hum.
Q Now, in your discussions with Mr. Morrison or
at Mr. Morrison's office with Mr. Mumma Thursday of last
week, was a leverage buyout discussed?
A No. You're misinterpreting it. We discussed
the purchase of pennsy Supply and certain subsidiary
companies. The pro forma balance sheets and the asset
values have not been determined, so you can't call it a
leverage buyout. We do not know the equity and the
collateral value that's going to be posted, so you cannot
determine a leverage buyout.
Q Well, let me ask it in a different way.
A If you're trying to ask me how much money Mr.
Mumma is going to put into that transaction, I don't know.
We have not come up with a pro forma balance sheet.
Q Okay. Let's take it one step at a time.
Take this slowly. At the meeting you didn't discuss how
much Mr. Mumma would be borrowing from the bank, did you?
A We discussed parameters, yes.
Q Parameters. And what were those parameters
that you discussed?
A I'm not sure. I think that's confidential.
I have no Bob has not authorized me to release any
numbers. I think it's a personal nature, and I'm not sure
we should put it on the pUblic record.
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MR. SONNENFELD: Well, Your Honor, this
witness was put on to show that Mr. Mumma had the capacity
to consummate this transaction. I'm entitled to
cross-examine to test that proposition.
MR. FARRELL: Your Honor, he was put on the
stand to verify the fact that Mr. Mumma is willing to buy,
that he's making inquiries to buy, and that if he's given
sufficient information they will make an informed judgment
as to whether they will participate in that decision.
THE COURT: Laura, can you read back that
question?
(Whereupon, the previous question was read
back by the reporter.)
MR. SONNENFELD: Your Honor, if I might
add --
THE COURT: I'll permit that question to be
asked, parameters.
MR. SONNENFELD: Thank you, Your Honor.
THE WITNESS: Seventeen to twenty-five
million.
BY MR. SONNENFELD:
Q That is how much Mr. Mumma was talking about
borrowing?
A
Q
Yes.
And what collateral was being discussed for
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1 that seventeen to twenty-five million?
2 A The assets of Pennsy Supply and subsidiary
3 companies.
4 Q And what was discussed as where the balance
5 of the purchase price would come from?
6 A Your Honor, I'm really getting into personal
7 financial information here that I think really is private,
8 but -- I normally do not discuss personal financial
9 statements and figures of my clients that the Mercantile
10 does business with, and --
11 MR. SONNENFELD: Your Honor, the witness was
12 proffered to show -- and indeed the last question asked on
13 direct examination of the witness was whether the witness
14 had a view as to whether Mr. Mumma could close this
15 transaction, and I'm entitled to probe that.
16 THE COURT: Well--
17 MR. FARRELL: Your Honor
18 THE COURT: Excuse me. He's already said
19 that he never examined personal assets of Robert M. Mumma,
20 II, so I think we have to accept that. He hasn't done that,
21 so I think, you know --
22 MR. SONNENFELD: Let me perhaps address it
23 from another way that might, I think, not infringe upon the
24 confidential concerns the witness has.
25 BY MR. SONNENFELD:
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Q The parameters that you discussed was that
Mr. Mumma would borrow seventeen to twenty-five million
dollars from the bank?
A Yes, sir.
Q Now, as to the balance of the financing, is
it correct that some of that, without getting into
specifics, was contemplated would come from Mr. Mumma?
A Yes.
Q And was it explained that some of the balance
would come from some third party rather than Mr. Mumma?
A I can't answer that. I don't know.
Q Was that discussed by you?
A No.
Q Well, did you contemplate that all of the
balance or difference between the amount lent by the bank
and the pruchase price would come from Mr. Mumma?
A That's a safe assumption. When someone asks
me for a loan between seventeen and twenty-five million and
you know that the purchase price is going to be thirty some
odd million, you would have to assume that equity would come
from the purchaser.
Q Is it correct to say that as you sit here
today you have no personal knowledge as to whether or not
Mr. Mumma could come up with the balance of such a purchase
price?
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A NO, we are looking at funding exactly what I
said. We have not made a formal commitment, and we will not
be able to do so until certain specific information is
shared with us by the seller.
Q Just so I can make sure the record is clear,
sir, is it correct that as you testify today you don't of
your own personal knowledge know whether or not Mr. Mumma
would be able to supply the balance of the purchase price;
that is, the difference between the seventeen to twenty-five
million dollars to be borrowed from the bank and the
thirty-two million dollars of the purchase price?
A Well, I would think it would be a safe
assumption if somebody is paying thirty some odd million,
and they have asked me for a high of twenty-five million,
that he would have the capability of coming up with the
difference.
Q Do you know that, though, or --
A No, I don't know that.
Q Thank you, sir. Now, are you familiar with a
court case called the Glen Eagles case?
A No, sir.
Q Are you familiar with leverage buyouts on
occasion being set aside?
A Yes.
Q Okay. Are you familiar with leverage buy
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1 outs being set aside if the business goes bankrupt?
2 A Yes.
3 Q And are you familiar with situations where
4 there's been a leverage buyout that's set aside where the
5 sellers are required to return the purchase price?
6 A Yes.
7 Q And that's the risk of a leverage buyout, is
8 it not?
9 A It's a risk not just on leverage buyouts,
10 it's a risk in funding period.
11 Q But there's a uniqueness in a leverage buy
12 out, is there not, a transaction being set aside and the
13 purchaser having to refund the purchase price?
14 A Well, the problem I have with your question
15 is you're assuming that this is a leverage buyout. If Mr.
16 Mumma asked me for seventeen million dollars, and he comes
17 up with fifty percent of the purchase price, I don't
18 consider that a leverage buyout.
19 You're also asking me to evaluate something which
20 I don't have the collateral information. If you would share
21 with me the reserves and some of the other financial
22 information, then I could give you a fair answer on whether
23 it's a leverage buyout or not.
24 Q It might be a leverage buyout?
25 A Could possibly be a leverage buyout, but
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1 you're asking me a specific question on a leverage buyout.
2 You've made the determination that it is a leverage buyout,
3 and I haven't made that yet.
4 Q You haven't made that determination, have
5 you?
6 A No.
7 Q What time of day was that meeting that you
8 had Thursday the 22nd, sir?
9 A 8:30 in the morning.
10 Q And have you -- strike that. When did you
11 learn you would be a witness here today?
12 A Oh, golly, let me see. It was Friday
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20 telephone conversation, we really haven't had much of a
21 chance--
22 Q What did Mr. Morrison tell you?
23 A That I would be called as a witness, that I
24 would be asked to give an indication as to whether or not
25 our lending institution would fund the purchase of the
evening. I was at my home in Virginia.
Q And who informed you of that?
A Mr. Morrison.
Q And did you discuss your testimony with
anyone?
A No. I was in Virginia, and I just saw Mr.
Morrison this morning, so I haven't -- aside from a
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assets for Mr. Mumma.
Q Now, before your financial institution may
proceed with the transaction, you would need internal
approval, would you not?
A No.
Q There's no committee to which you go?
A No. There's a committee for the final
commitment. There's a board of directors meeting, but for
me to proceed with the loan application I need no approval
from anyone.
Q Well, how would you proceed with the loan
application?
A Due diligence. We would inspect the general
ledger, look at tax returns, look at reserves, equipment
lists, appraisals, if any, environmental impact studies.
Q How long would that take?
A Well, I don't really know what you all have
done, but normally we could get it done within thirty days,
I would assume, and I say assume that you already have
supplied much of the information that we would require to
the existing buyer.
Q Well, once you got that done, what would your
internal procedure be within the financial institution?
A My people would do an internal write-up where
we would evaluate the assets. We would physically look at
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all the assets. I have two of my representatives with me.
If we get a good indication, we'll start work on it today.
Q And then what internal approvals would be
necessary, sir?
A It would be written up by my people and
submitted to the board of directors.
Q And how frequently does the board of
directors meet?
A Once a week.
Q Is there any internal loan committee whose
approval would be required?
A Yes.
Q Is that a committee of the board?
A No.
Q Okay. Would that be a prerequisite to go
into the board, that you first have had the loan approved by
the internal committee?
A Yes, we have a small internal committee
comprised of the president, executive vice president, and
Q In order to make that loan then you would
need approval of the committee and then you would need
approval of the full board?
A Full board. Our first committee meets on
Monday. The final committee meets on Wednesday.
Q And am I correct to say that this transaction
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hasn't even yet been discussed with the committee?
A No, it has not. No.
Q Nor with the board?
A No, absolutely not.
Q And in order to proceed with this
transaction, would you also need current financial
information on Mr. Robert Mumma, II?
A Yes.
Q And you don't have that yet either?
A No.
Q That wasn't brought to you on Thursday?
A No.
Q And indeed it's possible, is it not, that
depending upon what Mr. Mumma'S financial statement shows,
that on that basis alone the bank might elect not to proceed
with this transaction?
A It's certainly a possibility.
MR. SONNENFELD: I have nothing further, Your
Honor.
THE COURT: Any further questions?
MR. FARRELL: Your Honor, I just have two
very quick questions on redirect.
REDIRECT EXAMINATION
BY MR. FARRELL:
Q Mr. Trufant, Mr. Sonnenfeld made reference to
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1 what he calls a Glen Eagles problem?
2 A Yes.
3 Q And you had indicated that you were aware of
4 leverage buyout situations in which monies had to be
5 refunded?
6 A Yes.
7 Q In those situations did they involve cases
8 where the assets that were acquired were substantially below
9 the debt obligation that was incurred?
10 A See, I'm not familiar with the particular
11 case that he was talking about. This is a stock purchase,
12 am I correct, and I'm not sure we run the risk in a stock
13 purchase that we do in an asset purchase.
14 Now, I'm not an attorney, and I really don't want
15 to get into the legalese of all of this, please. This is
16 the reason that I have counsel represent me in these
17 transactions.
18 Q Mr. Trufant, let me approach it this way.
19 If, in fact, we have a situation where Legg Mason has given
20 an appraisal that thirty-two million dollars is a fair price
21 for these properties, and we have a situation in which a
22 foreign investor were to come forward and offer thirty-two
23 million dollars for these properties; what's the likelihood
24 that somebody could come in and say that if Mr. Mumma
25 offered thirty-two million dollars, that somehow he's
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1 MR. SONNENFELD: Objection, Your Honor.
2 THE COURT: Overruled. You can proceed.
3 THE WITNESS: I don't think there would be
4 any problem with that. I don't think there would be any
5 problem with it.
6 MR. FARRELL: I have no further questions.
7 RECROSS EXAMINATION
8 BY MR. SONNENFELD:
9 Q You're not a lawyer, sir, are you?
10 A No, I am not a lawyer nor do I wish to be.
11 Q Have you read the notice of the transaction
12 that was given to Mr. Mumma?
13 A No, I have not.
14 Q Have you seen it?
15 A No, I have not. One of my men might have,
16 but I personally have not seen it.
17 Q Do you know what assets have been sold to the
18 foreign buyer?
19 A There were two or three subsidiary companies,
20 and I'm familiar with the old pennsy supply, but I'm really
21 not familiar with the subsidiary, the Nine Ninety-Nine one
22 or two others that were discussed today.
23 Q Are you familiar with --
24 A My understanding is the quarries are the main
25 assets.
26
2101
1 Q Do you know that there were two corporations
2 that were sold?
3
4
5
6
7
8 transaction is what Mr. Morrison told you at the meeting
9 that you attended in his office last Thursday morning?
10 A That is partially correct, but you have to
11 remember that approximately ten years ago Bob Mumma, Sr.,
12 took me on a tour of what I believe to be all of the assets
13 of Pennsy Supply. It's my understanding that certain of
14 these assets have been transferred to other corporate
15 structures but the basic assets remain the same.
16 Q Do you know whether any assets were acquired
17 in the ten years since you took this tour with the late Mr.
18 Mumma?
19 A No, I don't know whether additional assets
20 were acquired. I have not had an opportunity to review our
21 file that came from dead storage on our previous calls.
22 Q Do you know whether the Hummelstown Quarries
23 was part of that transaction?
24 MR. FARRELL: Your Honor, I'd like to object.
25 We're really going beyond the scope of my redirect. I think
A Yes, I believe that was mentioned.
Q That was mentioned by whom?
A I believe it was mentioned in the meeting
that we had on Thursday.
Q Basically what you know about this
27
2102
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we're simply rehashing the testimony we have already put on
the record.
specifically
aware of that.
THE COURT: Yes, I think aSking him
he's not aware of that. Obviously he's not
MR. SONNENFELD: Thank you, Your Honor. I
have nothing further.
THE COURT: I have no questions. Thank you,
sir. Mr. Morrison, you may proceed.
MR. FARRELL: Your Honor, we have one other
witness we'd like to call, that would be Robert M. Mumma,
II.
Whereupon,
ROBERT M. MUMMA, II
having been duly sworn, testified as follows:
DIRECT EXAMINATION
BY MR. FARRELL:
Q Mr. Mumma, please state your name for the
record.
A Robert M. Mumma, II.
Q And where do you reside?
A In Bowmansdale, Pennsylvania.
Q What's your relationship to the decedent in
this case?
A He was my father.
28
2103
1 Q Do you have an interest in the businesses
2 that are being sold?
3 A Yes, I do.
4 Q And what is that interest?
5 A I have an interest in the shares of Nine
6 Ninety-Nine, which is a parent company of Pennsy Supply, and
7 I have co-tenant or tenancy interest in the quarry
8 properties and Paxton street, and I have an interest in the
9 shares of Hummelstown Quarries, Inc.
10 Q And your interest in those corporations is
11 direct?
12 A Direct.
13 Q It is -- you also potentially have an
14 interest through an inheritance through your father's Will?
15 A Yes, I do.
16 Q When did you first receive notice that the
17 impending sale was to take place?
18 A I received a certified
19 MR. SONNENFELD: Your Honor, I just object to
20 the form of the question in the sense calling it an
21 impending sale. It's misleading. The sale is closed.
22 THE COURT: Your objection is to the
23 phraseology not to when he got notice?
24 MR. SONNENFELD: That's right.
25 MR. FARRELL: I'll rephrase the question,
29
2101
1 Your Honor.
2
THE COURT: Overrule the objection. I don't
3 know if it was pending or sold at that time. I don't know.
4
MR. FARRELL: It was pending at the time he
5 got notice, Your Honor, otherwise we have a clear violation
6 of the BCO.
7
THE COURT: What's the question?
MR. FARRELL: The question was when he first
8
9 got notice of the impending sale.
10
THE WITNESS: I received a certified mailing
11 at approximately 9:00 on Monday, July the 12th.
12 BY MR. FARRELL:
13
Q
Okay. Did you previously receive any notice
14 at all informally of the sale?
15
A
I had heard a rumor as early as the first
16 week of June that the CRH or Old Castle had purchased the
17 pennsy Supply business. I attempted to verify that rumor.
18 I mentioned it to my sister, Babs, who attempted to verify
19 the rumor, and in all cases we were told that's not true.
20 At a deposition my sister Lisa on June the 25th or 26th held
21 in Harrisburg, she testified that there was no --
22
MR. SONNENFELD: Your Honor, I object. I
23 think this is hearsay. It can be established.
24
THE COURT: I'll sustain the objection to
25 that.
30
".. .1. I...) r-
.~< .... J
1 MR. SONNENFELD: Thank you, Your Honor.
2 BY MR. FARRELL:
3 Q Mr. Mumma, at the time you received that
4 notice, what was your understanding with regard to whether
5 or not the businesses were being marketed?
6 A My understanding is that they were not on the
7 market.
8 Q Now, have you ever expressed personally a
9 willingness to buy these businesses?
10 A Yes, immediately after my father's death when
11 we had a meeting in philadelphia with the people at Morgan
12 Lewis, I expressed an interest at that time in purchasing
13 the businesses. I was told that things would be put on hold
14 and that I should wait until they had the estate settled.
15 In 1989 or late 1988 I was notified that CRR was
16 willing to buy the businesses for approximately fifty-one
17 million dollars. At that time I was given an opportunity
18 a sixty day window during the summer of 1989 to make a
19 counteroffer or my own offer.
20 We went to CoreStates Bank, and we got a
21 commitment letter from them to match the fifty-one million
22 dollars in the summer of 1988. That was communicated to the
23 estate by letter, I think it was at the end of August or
24 early in September, and they responded to us that they no
25 longer intended to sell the businesses period.
31
2106
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In 1992, in an effort to end the litigation and
buy the businesses, Gerry and I put together an offer, Mr.
Morrison and I put together an offer for thirty-five million
dollars for these businesses and properties that would have
essentially resulted in my purchasing the assets that I
wanted from the estate and dropped the litigation regarding
the rest of the assets in my disclaimer.
Q And what was the disposition of that offer?
A They did not respond to the offer or the
response was that they had no interest in pursuing the
offer.
Q At that time was there any indication from
them that they were dissatisfied with the offer?
A No, there was no -- the indication was
strictly that they had no interest in pursuing the sale to
me.
Q So there were no negotiations between you or
the estate at that time?
A None.
Q Are you presently willing to buy these
businesses?
A Absolutely. It's my desire, my goal in life
to buy these businesses, and I have the wherewithal to do
it. I have the ability to manage them, and I would like to
own the businesses. I'd like to see them kept in the
32
210';'
1 family.
2 Q We've had an indication from Mr. Trufant
3 today that you've begun to make inquiries on that objective?
4 A That's correct. We have discussed it with
5 Mr. Trufant, and he is familiar with what the businesses
6 are, what they entail, the nature of the businesses.
7 Q In your opinion and based on your
8 understanding, what was your father's wish with regard to
9 the disposition of the businesses?
10 MR. SONNENFELD: Objection, Your Honor.
11 THE COURT: I'll sustain the objection
12 unless he can show something in the will that's in writing.
13 I'll be happy to look at that, but I'm not going to permit
14 any verbal testimony to be presented on that issue.
15 MR. FARRELL: Mr. Mumma, do you have anything
16 in there that would indicate your father's intent on whether
17 his business would remain
18 THE COURT: What specific paragraph are you
19 asserting that says this?
20 MR. FARRELL: In particular, Your Honor, I
21 think we are referring to Article 13.
22 THE COURT: Is that what he's relying on?
23 THE WITNESS: Yes. I don't have a copy of
24 it, Your Honor. My reading of it is that my father
25 MR. SONNENFELD: Well, Your Honor, I object
33
2108
1 to his understanding. What it says, first of all, speaks
2 for itself.
3 THE COURT: Okay, gentlemen, if he's
4 referring to Article 13 as expressing a desire from his
5 father that a family member or something purchase the
6 businesses, I'll look at Article 13. I think we already did
7 something on that once before, but I'll certainly look at
8 that.
9 MR. SONNENFELD: That's correct, Your Honor.
10 THE COURT: And that's in your reply brief,
11 so you need not go over that.
12 MR. SONNENFELD: Thank you.
13 THE WITNESS: Your Honor
14 THE COURT: Excuse me. I think we better
15 just go question by question. Go ahead. Article 13 of his
16 dad's will. Go ahead.
17 BY MR. FARRELL:
18 Q Mr. Mumma, there was testimony -- excuse
19 me -- strike that. Mr. Mumma, Mr. Sonnenfeld made the
20 remark to Mr. Frey in his cross-examination that this Court
21 has already rejected your right of first refusal in Equity
22 66. Is that what you are predicating your decision to buy
23 the businesses upon?
24 A No. My understanding is there was an oral
25 right of first refusal that regarded the sale of a piece of
34
Z109
1 property in Lemoyne, and that this Court ruled that the sale
2 of that piece of property in Lemoyne did not give rise to an
3 agreement for a right of first refusal to the purchase of
4 pennsy Supply. It didn't have anything to do with the
5 language of the will that my father wanted me or the family
6 members to maintain the business interest.
7 Q And your belief today that your father wanted
8 you or the family members to maintain the business interest
9 is predicated on the Will?
10 A That and actions that he and I were
11 undertaking.
12 MR. SONNENFELD: Your Honor, I object. That,
13 I think, violates the ruling.
14 THE COURT: I agree.
15 MR. FARRELL: Okay.
16 BY MR. FARRELL:
17 Q Mr. Mumma, let's discuss exactly the offer
18 that's now before the Court. You're a businessman. Are
19 these assets unique?
20 A Very unique.
21 MR. SONNENFELD: objection, Your Honor. This
22 is leading.
23 THE COURT: Overrule the objection.
24 BY MR. FARRELL:
25 Q Why are they unique?
35
2110
1 A These assets have been assembled since
2 over a period of time going back as early as 19 -- well,
3 1921. The real estate properties alone in Paxton street,
4 Hummelstown, and Silver Springs would be almost impossible
5 to duplicate.
6 Just the zoning and the environmental permits
7 required at the quarry locations, given the fact that they
8 are in the middle of the market area and it's developed up
9 around them, would make it impossible to repermit those.
10 The location on Paxton street is served by rail,
11 is immediately adjacent to the expressway, and is in
12 downtown Harrisburg. There are no other locations that
13 would have that kind of accessibility and proximity to the
14 Harrisburg market.
15 The Hummelstown location which serves Hershey has
16 the only access across the Swatara Creek that would allow
17 you to drive from the quarry site into the Hershey market
18 without going on a very circuitous route.
19 This business was put together with the plan
20 starting back in 1950 to assemble these quarries, and it
21 would be it would take you thirty or forty years to do it
22 again now.
23 Q You indicated that you got notice of this
24 sale on July 12th, is that correct?
25 A That's correct.
36
2111
1 Q At the time you received this notice, did you
2 have any indication whatsoever that notice had been given to
3 your sister or to any other party?
4 A No, I did not.
5 Q Now, you heard Mr. Frey testify this morning
6 that he filed his petition with this Court on, I believe he
7 said, July 19th?
8 A I think that's correct.
9 Q And what direction did you give to your
10 attorneys in response thereto?
11 A I asked Gerry to file a joinder and to notify
12 Morgan Lewis that we were going to do that.
13 Q What is your understanding with regard to
14 that notification?
15 A My understanding is that Morgan Lewis was
16 notified that day that the petition was being filed and that
17 we were going to challenge the executrices' ability to sell
18 these assets without considering the sale to me or certainly
19 without considering the sale to other interested parties of
20 which there are many out in the marketplace.
21 Q And what is your understanding at what time
22 of day that notice was tendered?
23 MR. SONNENFELD: This is his understanding of
24 what time Mr. Morrison notified me? Is that the question?
25 THE COURT: I'll certainly accept your word,
37
2112
1 Mr. Morrison, as to when you notified other counsel. If
2 you'll tell me when it was, that would be a matter of
3 record.
4 MR. MORRISON: I am Mr. Morrison. That is
5 Mr. Farrell, and I called Mr. Brady Green at 9:00 a.m. on
6 July 21st.
7 THE COURT: Fine. We'll accept that as being
8 truthful unless we hear otherwise.
9 MR. FARRELL: Thank you.
10 BY MR. FARRELL:
11 Q Mr. Mumma, at the time you received notice on
12 July 12th, what was the indication as to when this deal
13 would close?
14 A My -- there was supposed to be a meeting of
15 the shareholders on July the 22nd to ratify decisions of the
16 board of directors, and the deal would close after that
17 period of time.
18 Q So based upon the notice you received on July
19 12th, the deal would close on July 22nd?
20 A No, I think it was sometime after July 22nd
21 based on an agreement between CRR and the shareholders.
22 MR. SONNENFELD: Your Honor, I object. This
23 is Mr. Mumma's understanding of the documents. The
24 documents speak for themselves.
25 THE COURT: I agree, but I don't know if he
38
2113
1 knows what the documents say. We'll let him say what his
2 understanding is.
3 MR. SONNENFELD: If I also could add to what
4 Mr. Morrison said, despite the phone call to Mr. Green, Mr.
5 Morrison did not actually furnish us with a copy of his
6 petition or his joinder in Mr. Frey's petition until
7 Thursday afternoon, the 22nd.
8 THE COURT: I think that only related to the
9 date that the phone call was made.
10 MR. SONNENFELD: But the piece of paper
11 wasn't served on us until the 22nd.
12 BY MR. FARRELL:
13 Q Just to set forth where we are then, July
14 21st the notice went out, July 22nd was the date you
15 understood the closing would occur?
16 MR. SONNENFELD: Your Honor, I object to his
17 understanding. It's irrelevant. The documents speak for
18 themselves, and it's also a leading question.
19 THE COURT: That's all he can say. If he
20 doesn't know from anything else, his understanding, we'll
21 certainly hear it. If the documents say something else when
22 they're presented, obviously I'll accept what the true date
23 was.
24 MR. SONNENFELD: Thank you.
25 THE WITNESS: My understanding is that -- on
39
2111
1 July the 12th I got the notice of the shareholders meeting
2 to be held on July 22nd, at which time there would be an
3 opportunity for the shareholders to review the transaction
4 and cast a vote for or against it, and that sometime after
5 that meeting if the shareholders approved the sale there
6 would be an agreed upon date between eRR and the
7 shareholders at which time the stage II closing would take
8 place, but it would be subsequent to discussion and a
9 shareholders meeting to be held on July 22nd.
10 BY MR. FARRELL:
11 Q And when did this sale close?
12 A Well, I found out that it closed on July 21st
13 before they even had the meeting.
14 Q Did you attend a shareholders meeting on July
15 22nd?
16 A Yes, I did, and at that meeting David Landrey
17 and Marc Sonnenfeld were there. Neither of them would
18 answer any questions we had regarding the proposed
19 transaction nor would they entertain any discussions
20 regarding the values for the transaction nor did they
21 mention that this meeting is really irrelevant because they
22 had already closed the transaction.
23 Q They never indicated to you at that
24 shareholders meeting that the deal had closed the day
25 before?
40
2115
A No, not at all.
Q They still conducted that meeting?
A They still had the meeting, and they never
indicated that they had gone ahead and closed.
Q Did they represent to you by their actions
1
2
3
4
5
6 that you were still a shareholder?
7 A Yes.
8 Q Mr. Mumma, in selling the businesses, we know
9 that the executrices sold those assets that were in the
10 estate. What impact did that have on your own personal
11 stock interests?
12 MR. SONNENFELD: Your Honor, I don't think
13 that that is relevant to this proceeding. He is here to
14 testify, as I understand it, to an injunction that pertains
15 to the estate not to Mr. Mumma's personal affairs.
16 THE COURT: Overrule the objection. Go
17 ahead.
18 BY MR. FARRELL:
19 Q How did that affect your personal affairs?
20 A Well, I think from the fairness aspect I had
21 a substantial personal interest in these corporations and
22 I'm being forced to give that interest up even though I have
23 a desire to continue with it and I have the ability to
24 continue with it for the same amount of money to the other
25 shareholders, so personally I think it's putting me at a
41
2116
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disadvantage.
Q But the effect of the sale was to, in
essence, sell your stock?
A They sold my stock without my even having an
opportunity to review the transaction with them.
Q Did you participate in any way in the
negotiation of the sale?
A None.
Q Did you participate in any way setting the
price?
A
Q
None.
Did you participate in any way in selecting
the buyer?
A
No.
Q Mr. Mumma, I think it's fair to say that you
have been before this Court on a number of litigation
matters. What impact do you believe this sale will have on
the diminution of that?
A I don't see any diminution of it. I think
it's probably going to prolong it and may even cause more
litigation.
Q If this Court decided to allow you the
opportunity to buy the businesses, what impact would that
have on the current litigation?
A It was our intention back in January of 1992
42
2117
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to try and put together a package that would allow me to buy
the businesses and get out of the litigation, just put an
end to the litigation.
I think that if this transaction could be
structured where I could buy the assets of these businesses
from the estate, they're the assets that I'm really
interested in, and any other litigation with the estate
would be, at that point, meaningless to me. We could end
that litigation.
Q And, Mr. Mumma, just to clarify the record,
when you say buy the assets, you're speaking of buying them
on the same terms that the Irish have asked to buy the
assets?
A Certainly.
Q So if they have a stock sale, you have a
stock sale?
A The same terms. I would want to step into
the shoes of the Irish. In other words, instead of it being
CRR, it would be RMM II.
Q Okay. Mr. Mumma, with regard to that
litigation, there's litigation now pending in superior Court
known as Equity 66?
A Correct.
Q If you're successful in that litigation, what
is the relief that the Court would grant?
43
2118
1
MR. SONNENFELD: objection, Your Honor.
2
MR. FARRELL: I will strike that.
3 BY MR. FARRELL:
4
Q
What relief are you asking the Court to
5 grant?
6
A
Well, I would ask the Court to honor my -- if
7 I'm successful in litigation, I would have a right of first
8 refusal to buy several of these properties, and I would ask
9 the Court to see that I could buy these properties.
10
THE COURT: Counsel, I've never heard, has
11 that case ever been argued or --
12
MR. FARRELL: Your Honor, right now it's been
13 set for argument. It's been briefed, but --
14
MR. SONNENFELD: When?
15
MR. FARRELL: It's not been officially set
16 for argument. It's now awaiting argument.
17
MR. SONNENFELD: It's been fully briefed and
18 we are awaiting an argument date is my understanding, Your
19 Honor.
20
THE COURT: Okay. Thank you.
21 BY MR. FARRELL:
22
Q
Mr. Mumma, have you had an opportunity to
23 look at the shareholder notice list provided to you?
24
A
Yes.
25
Q
Have you had sufficient opportunity to become
44
'")11'1
t(,.J ..A.'~
1 familiar with the terms thereof?
2
A
This deal is very complicated, and I've tried
3 to form an opinion of it. I was hoping that I would be able
4 to get some information at the meeting on July 22nd, but we
5 have not really. It's a very complicated deal, and it's not
6 possible to make a determination.
7
Q
You had previously testified to what I think
8 you referred to as a stage II closing?
9
A
Yes.
10
Q
Do I take it then from your testimony that
11 there is a stage I closing?
12
A
There was a stage I closing that I believe
13 took place on July the 8th.
14
Q
And that closing would have taken place
15 before you had notice of the transaction?
16
A
Correct. Apparently there was a letter of
17 intent signed on May the 22nd, a pUblic filing,
18 Hart-Scott-Rodino filing sometime around that time, and then
19 the stage I closing on July the 8th.
20
Q
Okay. What is your understanding as to what
21 transpired at that stage I closing?
22
A
My understanding is that the estate
23
MR. SONNENFELD: Your Honor --
24
THE COURT: I'll tell you, this might -- I'm
25 going to have to sustain the objection to this.
45
'>10n
~ NV
1
MR. FARRELL: Your Honor, this goes to the
2 issue of self-dealing. Mr. Mumma is prepared to testify at
3 the time the stage I closing occurred it was a transaction
4 by the executrices in their fiduciary capacities --
5
THE COURT: I don't understand this. How are
6 you telling me that's what happened?
7
MR. FARRELL: Your Honor, we have a document
8 here that deals with board resolution by Kodie Corporation.
9 That was a corporation at that time owned personally by Mrs.
10 Mumma and Mrs. Morgan.
11
THE COURT: Why don't you mark that and have
12 it offered? Does that set forth a stage I? I don't know
13 what a stage I closing is obviously. Is that what the stage
14 I closing is? What transpired pursuant to that?
15
MR. FARRELL: Yes, Your Honor.
16
THE COURT: That will set forth what a stage
17 I closing is?
18 (Whereupon, Joinder's Exhibit No. 1 was
19 marked for identification.)
20
THE COURT: So I understand the purpose of it
21 now is to show whatever a Stage I closing is. This took
22 place before he had any knowledge of it, is that it?
23
MR. FARRELL: No, Your Honor, the purpose of
24 this is to establish that as part of the transaction that
25 occurred, there was a transfer of assets by the executrices
46
II')."i! '-}'''.
IwJ..r""j,
1 in their fiduciary capacities to a corporation that they
2 owned personally in violation of section 3356 of the probate
3 code.
4
MR. SONNENFELD: Your Honor, I have no
5 objection to the document coming in, but I don't think the
6 witness can add anything to it.
7
THE COURT: I don't know if he can or not.
8
MR. FARRELL: Your Honor, if Mr. Sonnenfeld
9 wants to stipulate that at the time of the stage I closing
10 his client owned personally Kodie Corporation, then we'll
11 proceed on.
12
MR. SONNENFELD: The document speak for
13 itself, Your Honor.
14
MR. FARRELL: I take it you so stipulate?
15
MR. SONNENFELD: I stipulate that the
16 document speaks for itself, not your mischaracterization of
17
the document, and I don't think
the issue is the
18 testimony of Mr. Mumma who was not at the Closing and only
19 has that document. I don't think that he can respond to the
20 question on the record, if there is a question on the
21 record.
22
THE COURT: Well, everyone is looking at me
23 like I -- I don't think there's a question on the record. I
24 don't have any idea what a Stage I closing is. That's
25 beyond my knowledge. If that's what took place at a Stage I
47
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N .N/~'
1.
2
3
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1.0
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proceeding, hopefully I can look at it and try and decide
what it says.
Now, these other things about whether or not they
own, I think you ought to maybe get someone else to testify
to that other than Mr. Mumma.
BY MR. FARRELL:
Q Mr. Mumma, do you know where this document is
from?
A This document was part of the book that they
sent me in the mail.
Q The seller sent to you?
A Yes.
MR. FARRELL: Your Honor, I'm trying to make
things easy for the Court and make things easy for Mr.
Sonnenfeld. If he wants, I will call his people and ask
them who owned Kodie Corporation at the time of the Stage I
closing.
THE COURT: You may call who you wish to.
They're here, so you may call them.
MR. FARRELL: Okay.
BY MR. FARRELL:
Q Just one final question, Mr. Mumma. Why is
it important to you to buy these businesses?
MR. SONNENFELD: Objection, Your Honor.
THE COURT: Overruled.
2123
48
1 THE WITNESS: I've been involved with these
2 businesses as long as I can remember. My grandfather used
3 to take us after church and drive us around to the various
4 quarry properties and explain to us what was going on, my
5 sister and I, my sister Linda, Babs, and myself.
6 I've worked at these businesses since I've been
7 twelve years old. I've been an employee of Pennsy Supply
8 since then. My education, my background has been involved
9 with the operation of these businesses, and I have --
10 My father and I together set up a plan after 1972
11 as to how we would expand these businesses, and I would
12 ultimately get to own them. We were executing that plan,
13 the two of us, and worked diligently towards that for over
14 twenty years.
15 I just think the businesses should be kept in the
16 family. I see no reason why if my mother and my sister want
17 to leave the businesses that they shouldn't be allowed to
18 and get whatever they feel is their fair share for their
19 ownership; but once they've made that decision, I don't
20 think it's fair that they insist that my other sister, Babs,
21 who I believe would like to stay in the business --
22 THE COURT: That's, you know, we better have
23 his sister here to say that.
24 MR. SONNENFELD: I think we've heard to the
25 contrary from Mr. Stevenson.
49
212/1
1
MR. FARRELL: No, Your Honor, I think we
2 heard Mr. stevenson say he made a decision based on what he
3 thought was in Babs' best interest.
4
MR. FARRELL: Go ahead, Mr. Mumma, repeat
5 your answer.
6
THE COURT: Well, that's --
7
THE WITNESS: Well, I would like to stay in
8 the business, and it's important to me to stay in the
9 business. It's something that I've looked forward to for a
10 long time, and I'd like to see it come to fruition.
11 I would much rather have the business be in local
12 hands than foreign hands, and I think that it would be much
13 better to stay in the family, and I'd like to pass it on to
14 my kids someday, too. It's been a good business, a very
15 good business for the Mumma family.
16
MR. FARRELL: Your Honor, I have no further
17 questions.
18
THE COURT: Cross-examine.
19
MR. SONNENFELD: May I have a short recess
20 here before proceeding?
21
THE COURT: You know, I was just thinking.
22 Obviously we're not going to come anywhere near finishing
23 today. Maybe what we could do is just adjourn now. As I
24 mentioned to counsel before, I would like to start this
25 thing tomorrow afternoon at 4:00 and we'll run it on the
50
Z10~
,~l~
1 midnight shift. We'll bring in a special court reporter.
2
So maybe it would be a good time to adjourn right
3 now, and we'll resume at 4:00 tomorrow afternoon. I
4 apologize to counsel for setting this at such a screwy hour.
5 As I indicated my schedule is blocked up I think until
6 probably early october, and I have too much to cancel if I
7 do it otherwise, so I --
8
MR. FARRELL: Your Honor, may I ask Mr.
9 Sonnenfeld how long his cross-examination will take?
10
MR. SONNENFELD: I don't know. If I could
11 make one point to the Court, Your Honor, Mrs. Mumma has
12 long-standing plans to be out of the country leaving
13 tomorrow. We're prepared to proceed without her, but if
14 counsel wanted to call her for any reason, I wanted to let
15 them know that she will not be here tomorrow.
16
THE COURT: Mrs. Mumma, the mother?
17
MR. SONNENFELD: Mrs. Morgan will be here
18 tomorrow but Mrs. Mumma will not.
19
THE COURT: Is there anything that Mrs.
20 Morgan could not testify to that her mom could?
21
MR. SONNENFELD: I believe not, not about
22 this transaction. I think Mrs. Mumma could testify about
23 this transaction.
24
THE COURT: Do you have any problem with --
25 as long as Mrs. Morgan is here that you wish to call her?
51
Q10r
~ ~~{~
1 You could call her to testify about this transaction that
2 took place July 8th or whenever it was.
3
MR. FARRELL: Your Honor, I think that --
4 what I would like to do, if at all possible, I would like to
5 finish with Mr. Mumma today, and we may very well rest at
6 that point.
7
THE COURT: Well, the request now before me
8 is for a recess. We'll take a recess. How long? Ten
9 minutes?
10
MR. SONNENFELD: Ten minutes will be fine,
11 Your Honor.
12
THE COURT: If we're going to proceed then
13 today, we'll proceed to noon and then we'll stop and come
14 back tomorrow afternoon at 4:00.
15
MR. SONNENFELD: That will be fine, Your
16 Honor.
17
THE COURT: That would be my intention. Is
18 there anyone that that creates an undue hardship for?
19 Counsel could be here at four tomorrow?
20
MR. SONNENFELD: It's a delight to be here,
21 Your Honor.
22
THE COURT: All right then, we'll take a ten
23 minute recess and we'll work until noon, and then we'll come
24 back tomorrow afternoon at 4:00. Court is now in recess.
25
(Whereupon, a recess was taken.)
52
ryl#~'C~
~ ~.
1
(Whereupon, Respondent's Exhibit Nos. 2 and 3
2
were marked for identification.)
3
MR. SONNENFELD: May I proceed, Your Honor?
4
THE COURT: Yes, we are ready to proceed on
5 cross-examination.
6
MR. SONNENFELD: I have no questions for Mr.
7 Mumma other than to authenticate two documents, and I
8 understand from Mr. Mumma's counsel they will then rest, and
9 I would like to briefly call Mrs. Mumma to enable her
10 testimony to come into the record before her departure.
11
THE COURT: Okay. So you're asking no
12 questions of Mr. Mumma?
13
MR. SONNENFELD: Other than to authenticate
14 two documents.
15
THE COURT: And what are the two documents?
16
MR. SONNENFELD: Your Honor, what we've
17 marked for identification as Respondent's Exhibit No. 2 is a
18 letter dated December 9th, 1991, on Buchanan Ingersoll
19 letterhead from Mr. Morrison addressed to David Landrey of
20 Stradley, Ronon, Stevens & Young and Arthur L. Klein of
21 Morgan, Lewis & Bockius.
22 This is, I think, Your Honor, the 1992 offer of
23 thirty-five million dollars that Mr. Mumma referred to in
24 his testimony. And Respondent's Exhibit No. 3 is the
25 shareholders notice that Mr. Mumma testified he had received
53
21'>-:::::
1-.,-/
1 by, I believe, certified mail he said at 9:00 in the morning
2 Monday, July 12th.
3 THE COURT: Do you want to authenticate
4 MR. SONNENFELD: If I may approach the
5 witness.
6 CROSS-EXAMINATION
7 BY MR. SONNENFELD:
8 Q Mr. Mumma, I show you what we have marked for
9 identification as Respondent's Exhibit No.2, and you
10 recognize that document, do you not, sir?
11 A Yes.
12 Q Okay. Is it correct that the document is as
13 I described it to His Honor; that is, it's a letter dated
14 December 9, 1991, from your lawyer, Mr. Morrison, on the
15 Buchanan and Ingersoll letterhead addressed to David
16 Landrey, Esquire, and Arthur L. Klein, Esquire, regarding
17 the estate of Robert M. Mumma?
18 A That's correct.
19 Q And it was carbon copied to you?
20 A It was written on my behalf and copied to me
21 among others, yes.
22 Q Thank you. Next I'd like to show what we
23 have marked for identification as Respondent's Exhibit No. 3
24 and ask you if you recognize this as the notice that you
25 received by first class mail at 9:00 in the morning last
54
212~j,
1 Monday, July 12th?
2 A Yes, it appears to be.
3 MR. SONNENFELD: Okay. Thank you. Your
4 Honor, I have no further questions of Mr. Mumma.
5 THE COURT: I have no questions.
6 MR. FARRELL: Your Honor, we have no further
7 witnesses.
8 THE COURT: Step down.
9 MR. SONNENFELD: Your Honor, if the
10 Petitioner and Joinder have rested, I would at least for the
11 record like to move for a compulsory non-suit as to the
12 petition that's been filed. I would ask the Court to take
13 that under advisement as we proceed.
14 THE COURT: I'm not in a position to rule on
15 that at this time.
16 MR. SONNENFELD: Thank you, Your Honor.
17 (Whereupon, the testimony of Donald J.
18 Trufant and Robert M. Mumma, II, was concluded.)
19
20
21
22
23
24
25
55
213C
CERTIFICATION
I hereby certify that the proceedings are
contained fully and accurately in the notes taken by me on the
above cause and that this is a correct transcript of the same.
~QU(Q
Lura F.
Official
--' ,
'(, t-,o"dl Q.LJ
Hand}ey
Court Reporter
--------------------------------
The foregoing record of the proceedings on the
hearing of the within matter is hereby approved and directed to
be filed.
7 /J its
/ /
~_/'
P.J.
2:131