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Home My WebLink About08-02-93 (2) ,,'-- IN RE ESTATE OF ROBERT M. MUMMA, : COURT OF COMMON PLEAS : CUMBERLAND COUNTY : ORPHANS' COURT DIVISION Deceased. : : NO. 21-86-398 SURREPLY MEMORANDUM OF BARBARA McK. MUMMA AND LISA M. MORGAN IN OPPOSITION TO PETITION OF ROBERT M. FREY FOR PRELIMINARY INJUNCTION AND RULE TO SHOW CAUSE I. INTRODUCTION Barbara McK. Mumma ("Mrs. Mumma") and Lisa M. Morgan ("Lisa") respectfully file this surreply memorandum to address new issues raised and new relief sought by Robert M. Mumma, II ("Bob") in his Response to the Supplemental Memorandum of Mrs. Mumma and Mrs. Morgan.lI II. ARGUMENT Bob argues that, notwithstanding the clear provisions of the Pennsylvania Business Corporation Law, 15 Pa. C.S. ~ 101 et sea. (lithe BCL"), he somehow was entitled to more than ten days' notice of action on written consent by a majority of the shareholders of Nine Ninety-Nine, Inc. ("999") and Hummelstown Quarries, Inc. ("HQI"). However, Bob continues to ignore a number of relevant facts. First, the Notice to shareholders was notice to shareholders of the corporate divisions of 999 and HQI. While 1/ It is clear that Bob's latest brief is nothing more than an attempt to supplement the factual record, and/or evade the evidentiary rulings of this Court, after the close of testimony. "lit0 ,:., L~':" the Notice advised Bob that "the purpose of the [divisions] is to facilitate the sale of a line of business ("the pennsy Supply Business")" to CRR, the only action of which notice was required by the BCL was the division. Nonetheless, Bob persists in his argument that he was entitled to notice of the sale itself. Second, Bob continues to ignore the provisions of 15 Pa. C.S. ~ 1702(a), which expressly state that "[i]f the notice is sent by mail . . . it shall be deemed to have been given to the person entitled thereto when deposited in the mail. . " Only by ignoring this provision is Bob able to argue that he was entitled to ten days from the date on which he actually received the notice. Third, Bob argues that he received no clear expression of the intention to complete the sale to CRR after the expiration of ten days from the mailing of the Notice on July 9. However, as Bob concedes, the Notice stated that "it is anticipated that [the sale] will take place as soon as permitted under applicable law." See Exhibit R-3 at F-17. Bob fails to acknowledge that this sentence was followed by a citation to the ten-day rule of 15 Pa. C.S. ~ 1766(c). Moreover, Bob ignores the fact that Gerald K. Morrison, Esquire was advised by counsel for Mrs. Mumma and Mrs. Morgan that they believed that the sale might, under the BCL, go forward on July 20 or anytime thereafter.Y l/ Bob also contends that he did not receive information requested from Mrs. Mumma and Mrs. Morgan, including "exhibits and schedules to the SUbscription Agreement with CRR and financial statements of the companies holding the (continued. . .) 2 2143 Bob's latest memorandum and proposed order also alters the relief sought from this Court. Bob now requests that this Court appoint a custodian to run the businesses until Bob has an opportunity to decide whether to match the price and terms of the CRR deal. This request is improper as a matter both of fact and of law. Bob's request ignores the practicalities of the situation. As of the morning of July 21, Bob, Mrs. Mumma and Mrs. Morgan ceased to be shareholders of 999 and HQI, or to have any ownership interest whatsoever in the pennsy Supply Businesses. Rather, the sole shareholder of 999 and HQI is Kodie Acquisition Corp., which in turn is a wholly-owned subsidiary of CRR. Because Bob is not a shareholder of either 999 or HQI, he is not entitled to seek appointment of a custodian under 15 Pa. C.S. 9 1767(a) ("upon application of any shareholder, the court may appoint one or more persons to be custodians of an for any business corporation. . . .") (emphasis supplied) .~I In addition, 9 1767(a) (2) provides that a custodian of a closely-held corporation, such as 999 or HQI, may be appointed only when "the directors or those in control of the corporation have acted illegally, oppressively or fraudulently toward one or l/(...continued) proposed sale assets," relating to the sale until July 19. However, the correspondence and other documentation attached hereto as Exhibit A demonstrates that Mr. Morrison was provided with voluminous documentation, including the items listed above, on July 15 by hand- and overnight delivery. 11 Interestingly, Bob fails to offer any authority upon which the Court might appoint a custodian in the instant case. 3 2144 more holders or owners of 5% or more of the outstanding shares of any class of the corporation ." (emphasis supplied). Because Bob owned only 0.48% of HQI, see Exhibit R-5, he was at no time a proper party to seek a custodian of that corporation. Moreover, Bob offers no statutory or other basis upon which a custodian might be appointed with respect to assets or properties owned not by corporations but by the Estate or the Marital Trust. Finally, Bob cites no record evidence or testimony supporting his implicit allegation that Mrs. Mumma and Mrs. Morgan acted illegally, oppressively or fraudulently.~1 Ultimately, as paragraph l(b) of Bob's proposed order makes clear, Bob's request for appointment of a custodian is nothing more than one last attempt to obtain the first refusal rights he has claimed for more than four years and which this Court repeatedly has held that he does not possess. ~ It is also unclear whether a party joining the petition of another may supplement or vary the relief sought. Robert M. Frey, Esquire, in whose petition Bob joined, did not request appointment of a custodian. 4 Z145 III. CONCLUSION For the foregoing reasons, Barbara McK. Mumma and Lisa M. Morgan respectfully request that this Court refuse to enter the relief now sought by Robert M. Mumma, II. ~..r:..~ os h A. 0 Connor, Jr. Marc J. Sonnenfeld Brady L. Green 2000 One Logan Square Philadelphia, PA 19103 (215) 963-5212, 5572, 5079 William F. Martson Ivo v. otto, III MARTSON, DEARDORFF, WILLIAMS & OTTO 10 East High Street Carlisle, PA 17013 (717) 243-3341 Attorneys for Barbara McK. Mumma and Lisa M. Morgan 5 Z146 ~\\\\\ 'l;" ...,.t. < '\ ...... 'I " ., :!. .. I!" _,,~ " '-- of, 0 _ :---) to !" 0 ~ '8"'<'-' - ~--. ~ .0...;.'-....~ \ '" "'- ~-,j - ~. \'" . - ~' , .' '" .. " .. i .. ~ ~ ,:\ '" "'. '<' ,;, .- ...< ~, ~~ . '" . - ~ - '<;., ~" '1-' 0""" ~~ .,. .' ?"" S~ o,,~ 0-";;;' ~ . 1 ~ 1:. ~ " " .. 'e ~ S ~ .,:, . ~\ b ) ",\,\ .,,~ ":" , ~ .. " -:. -. ;s ~ ~ ~ ~ "" " l.. j .) -!> ~''Q -- ~ ~ , ~ ~ ~" - "- ".;z ; '7'. i I ~ ~ '~ "'\--= r, '____ ----.. --- ~ 21.4:'7 E^H1Bl<J~ ~<i\" MORGAN, LEWIS & BOCKIUS PHILADELPHIA COUNSELORS AT LAW 2000 ONE LOGAN SQUARE PHILAOELPHIA, PENNSYLVANIA 19103 -6993 WASHINGTON Ne:w YORI< Los ANGELES HARRISBURG MIAMI LONDON TE:I.U'HON[ (2151963-5000 SAN DIEGO ~.u:: (2151 963-5299 BRUSSELS F"RANKF"U~ TOKYO BRADY L. GRE:EN D....1. plRceT '21$, 963-5079 July 15, 1993 via Hand-De1iverv and TelecoPV Gerald K. Morrison, Esquire clo Buchanan Ingersoll 1200 Two Logan Square Philadelphia, PA 19103-6933 Re: Documents Responsive to Reauest Dear Mr. Morrison: Enclosed herewith are the items requested in paragraphs (2) (by-laws of Nine Niney-Nine, Inc. ("999") and Hummelstown Quarries, Inc. ("HQI") and (6) (financial statements of 999, HQI and subsidiaries) of your July 14, 1993 letter. Additional 999 minutes for the period prior to 1990 will be provided once they have been collected. This letter also will confirm our telephone call this morning in which I advised you that there exist no employment agreements, consulting agreements, covenants not to compete, leases or similar compensatory agreements covering current officers, employees or directors of HQI, 999 or it subsidiaries that will survive the divisions or come into effect after the divisions, as requested in paragraph 4 of your letter, other than the covenants not to compete which are set forth in Article XI of the SUbscription Agreement for the Acquisition of all outstanding Stock of Kodie Acquisition Corp. dated July 8, 1993 ("the Subscription Agreement"). I also advised you that Barbara McK. Mumma, Lisa M. Morgan and Linda M. Roth received no consideration for the Article XI covenants not to compete. In addition, this l~tter will confirm that your messenger picked up from our offices this morning all of the items mentioned in paragraph (1) of your letter (all schedules and exhibits to the Subscription Agreement) . Very truly yours, ;{iJJ Q).-<1tt., ;/.~Jccl- '--- Brady tt. Green ,I bee: william E. Zeiter, Esquire (w/o encl.) Marc J. Sonnenfeld, Esquire (w/o encl.) Gail Ramsey (w/o encl.) Z1/18 PHILADELPHIA LOS ANGELES MIAMI LONDON FRANKFURT MORGAN, LEWIS & BOCKlUS COUNSELORS AT LAW 2000 ONE LOGAN SQUARE PHILADELPHIA, PENNSYLVANIA 19103-6993 TELEPHONE: (215) 963-5000 FAX: (215) 963-5299 FAX OPERATIONS: (215) 963-5560 WASHINGTON NEW YORK HARRISBURG SAN DIEGO BRUSSELS TOKYO FAX MESSAGE SEND TO: (1) Name: Gerald K. Morrison, Esquire Firm: Buchanan Ingersoll FAX Number: (717) 233-0852 Telephone Number: (717) 237-4901 FROM: Name: Brady L. Green, Esquire Floor: 22 Operator Sending: Telephone Number: 963-5079 NUMBER OF PAGES (INCLUDING COVER PAGE): 2 THE INFORMATION CONTAINED IN THIS FfV( MESSAGE IS INTENDED ONLY FOR THE PERSONAL AND CONFIDENTIAL USE OF THE RECIPIENTIS) NAMED ABOVE. THIS MESSAGE MAY BE AN ATTORNEY-CLIENT COMMUNICATION AND AS SUCH IS PRIVILEGED AND CONFIDENTIAL. IF THE READER OF THIS MESSAGE IS NOT THE INTENDED RECIPIENT OR AN AGENT RESPONSIBLE FOR DELIVERING IT TO THE INTENDED RECIPIENT, YOU ARE HEREBY NOTIFIED THAT YOU HAVE RECEIVED THIS DOCUMENT IN ERROR AND THAT ANY REVIEW, DISSEMINATION, DISTRIBUTION, OR COPYING OF THIS MESSAGE IS STRICTLY PROHIBITED. IF YOU HAVE RECEIVED THIS COMMUNICATION IN ERROR, PLEASE NOTIFY US IMMEDIATELY BY TELEPHONE, AND RETURN THE ORIGINAL MESSAGE TO US BY MAIL. THANK YOU. Time Sent: Date Sent: 7/15/93 COMMENTS: ~/ .'...~ ,. .- .~ ~ - - --...--- 21,19 "':-.-~ -- -~.. :f:+:**+** UF-250 ***~+:*:.f**>+:+':* -,JDURI,jAL- ::t':t'.*:+:;ft;~;:t:****-t::t; DATE JIjL-15-1'~S3 :K+:**..f; TIME 15:51 ~l(*****:** NO. 19 con DOC r'URAT I 011 00:01'41 >>R IDErlTIFICATIOI, O~ .. 02 ><~1T ::::171'7'2330852 T -11 LOB ," ****:+-.*+r)lc,+:~+<*:**_'i'*:+:;f'--**:+ -F'HNFiSOt'll r: - t-t +:t'.~K>t-**::+<:K+:Pt;**:+'>I--:+:+::t't;:*-+-_.f**- - ~.". ,~~~'~_","'''F '_' ",."~::::",, i~~~;:';, ~~".,...,,-i-,.. '....,..,.. "";.., '-, '~~*~~-oA<'~'/- - j6 ~\.~.:'-. "'0 " . --- . , I 7.<;."".: ,,-.... "-) - () _... --,-- - --. - ~:j. y -...~:'........_. l _, '"'<,. - - o .u 2:150 DATE nt'IE DIAGNOSTIC JUL-15 15:4S 842490A47820 215 'jE.3 5299 .:;.:;.- *********** .~""'....,.. ' '-;;'.:--'" . 00 .It:;;:~: ~~;I?!i- .,~. ",.;.~;./-;,.--~., ~'O. .-J I HORGAN, LtwIS " BOQ'\.Lu' INSTROCTIONS TO MESSENC:ER8 2fXJ 7{J56" UQOESTZO BYI -A-,) iii J Il -Y Jh. j' "/1' ' if 1..- Attorney DADa 7//5Iq~ . SECRETARY I,lj[ JiL.. A'1"1'ORNEY EXTENSION. ,;; (f '7Q A'1"1'ORNEY NOHBEJU &X059, GES. D J'DJI D PERSONAL EH'l'1 fI JJJfJr Ji / .l2B ACC'l'. JlD miLl TO'l'AL - . msc. 1HJ'O.. ~ [/ 0 vi / / CLIENT HA'l"l'ER / PICK-UP 'rIM:! NEEDED: A.X. - DELIVERY P.X. , - -- RUSS JWa:~r!j;j 0/\ rrr/'U/'IYJ COHPANYJ~()('huh,- Ii ~ ADDUSS Idi1(1 .,'; I j 7 n IJ. 17 . J) B,t f.. ,n J .0, 'r 0 CITY/STA'l'E '-it! I ), /. '/-' A /'1 ( OJ StJITZ/n.ooll 1J'f! II /1)1/1 TELEPBOHZ SPECIAL INSTRUCTIONS. Ba.a: IF OELIVERY IS HADE AF'l'ER BOORS, CAB PACJ:lCz BE UF'l' WI'l'BOt1'r OBTAININC: A SIGNA'l'OU? us HO UCZIVED BY: DA'l'E : ffs- 'rID.-I /{~ P1UH'1'. J DA'l'E: / I / / /" / "/ HESSENC:ER': . {1./': J' a,! ,/"'~, s.' 1, DA'l'E: I ( ) / /' 'rID. 7/5/73 TIX!: 1 'f I I Z1.51 MORGAN, LEWIS & BOCKIUS PHILAOELPI-IIA COUNSELORS AT LAW 2000 ON~ LOGAN SOUARE PHILAOELPHIA, PENNSYLVANIA 19103.e993 F...,e 12!5) 963-5299 WASHINGTON NEW YO,",", HARRISeURG SAN DIEGO BRUSSELS TOKYO Los AHGE\..ES MIAMI TI:J,.&:P"ON~; 12151 il63~SOOO LONOON FRANKF"URT BRACY L. GREEN Dl"l. Cl!"'ItC'T (2\51 Q6:l- 5079 July 15, 1993 via Federal EXDress Gerald K. Morrison, Esquire Buchanan Ingersoll 30 N. Third street Harrisburg, PA 17101 Re: Documents Responsive to Reauest Dear Mr. Morrison: Enclosed herewith are all documents filed pursuant to the Hart-Scott-Rodino Act, which are requested in paragraph (5) of your July 14, 1993 letter to David Landrey. Very truly yours, Brady L. Green Enclosures Z152 CERTIFICATE OF SERVICE I hereby certify that a copy of the foregoing Surreply Memorandum of Barbara McK. Mumma and Lisa M. Morgan in Opposition to Petition of Robert M. Frey for Preliminary Injunction and Rule to Show Cause was served this date by depositing same in the Post Office at Carlisle, P A, fIrst class mail, postage prepaid, addressed as follows: Robert G. Frey, Esquire 5 South Hanover Street Carlisle, PA 17013 Charles E. Shields, III, Esquire Commonwealth National Bank Building 2 West Main Street Mechanicsburg, PA 17055 Gerald K. Morrison, Esquire BUCHANAN & INGERSOLL 30 North Third Street, 8th Floor P. O. Box 12023 Harrisburg, PA 17108-2023 MARTS ON, DEARDORFF, WILliAMS & OTTO ~\~ By .. --, ') Ivo . 0 ill, squire Ten East High Street Carlisle, PA l7013 (717) 243-3341 Attorneys for Barbara McK. Mumma and Lisa M. Morgan Dated: August 2, 1993 2153 \I II ~ ~ "' '" .' 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