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HomeMy WebLinkAbout06-01-04 INRE: ESTATE OF LOY T. HEMPT IN THE COURT OF COMMON PLEAS CUMBERLAND COUNTY, P A ORPHAN'S COURT DIVISION NO. 21-77-231 KALBACH OBJECTORS' REPLY IN OPPOSITION TO MOTION FOR DIRECTED VERDICT REGARDING DIVISION OF TRUST AND NOW, come the Kalbach Objectors, by and through their attorneys, METTE, EV ANS & WOODSIDE and hereby file the following Reply in Opposition to Motion for Directed Verdict Regarding Division of Trust: A. In response, generally, the Kalbach Objectors hereby reference and incorporate herein their Proposed Findings of Fact, Conclusions of Law, Brief, and Reply Brief, which demonstrate that a directed verdict for Trustee on this issue is wholly unfounded. B. In further response to several of the averments in this Motion, Kalbach Objectors state as follows: 3. The assertion that Gerald Hempt acted in good faith simply cannot be accepted at face value. He engaged in blatant and obvious self-dealing, utilizing the advice of counsel to achieve his personal goals. A clearer record of self-dealing than the trail of Freedman letters over a period of a year is difficult to imagine. 4. The assertions that there were good business reasons for not allocating shares of "closely-held family businesses" to Kalbach simply highlights Trustee's conflict of interest and self-dealing. If one accepts this reasoning, which Kalbach Objectors do not, then the Trustee is acting in the alleged best interests of the corporations, not the best interests of the beneficiaries of the Trust. Moreover, even if one accepts this reasoning with respect to Hempt Brothers, Inc., with which, arguably, Kalbach competes in his own business, it does not extend to the other businesses. Indeed, Robert H. Kalbach, Sr. already owns 6,000 shares of C.A. Hempt Estate, Inc. He is as much a part of the "family" in this business as Gerald Hempt. With respect to Valley Land Company, the Loy T. Hempt Residuary Trust owns 89 out of the 100 issued and outstanding shares. The other 11 shares are owned by Gerald Hempt. This is not a "family business" that carries any of the same concerns alleged about Hempt Brothers, Inc. Whatever shred of credibility might attach to this position if applied solely to Hempt Brothers, Inc., the unfounded extension to C.A. Hempt Estate, Inc. and Valley Land Company reveals the Trustee's true colors. 5. The $104 value for a share ofC.A. Hempt Estate, Inc. was solely the result of some attorney reckonings by Mr. Freedman, who is neither an accountant nor valuation expert. Trustee must establish a valid basis for the value he used in the challenged Trust division, and the "methodology" used by a non-expert to justify a value of $104 falls miserably short of this burden. 6. On the contrary, Kalbach Objectors vigorously disputed the 45% reduction to reflect taxesl relating to the hypothetical sale of the Valley Land Company property. Not only did Kalbach Ob~ectors argue that no reduction was proper under the circumstances , the 45% figure used by Mr. Freedman based on Valley Land Company's "C" corporation status is patently wrong and was the subject of much disputed testimony and argument at the hearing. WHEREFORE, the Motion for Directed Verdict regarding removal of the Trustee and division of the Trust must be denied. I Mr. Freedman did not utilize transaction costs other than tax consequences in his valuation. His recollection at trial that he did is mistaken, as revealed in his valuation letter itself. (Kalbach Ex. 15). 2 The property has been owned since 1957 and there are no plans or efforts to sell it. r By: DATED: ~'\~'-\ Respectfully submitted, METrE, EVANS & WOODSIDE ~1-~ Howell C. Mette, Esquire Sup. Ct. I.D. No. 7217 Daniel L. Sullivan, Esquire Sup. Ct. I.D. No. 34548 Vicky Ann Trimmer, Esquire Sup. Ct. LD. No. 49679 3401 North Front Street P. O. Box 5950 Harrisburg, P A 17110-0950 (717) 232-5000 - Phone (717) 236-1816 - Fax Attorneys for Kalbach Objectors . . . . CERTIFICATE OF SERVICE I certify that I am this day serving a copy of the foregoing document upon the person(s) and in the manner indicated below, which service satisfies the requirements of the Pennsylvania Rules of Civil Procedure, by depositing a copy of same in the United States Mail at Harrisburg, Pennsylvania, with first-class postage, prepaid, as follows: Ivo V. Otto III Esquire MARTS ON, DEARDORF, WILLIAMS & OTTO 10 East High Street Carlisle, P A 17013 Donald Kaufman, Esquire McNEES, WALLACE & NURlCK 100 Pine Street P.O. Box 1166 Harrisburg, P A 17108-1166 Joel Zullinger Esquire \ ZULLINGER & DAVIS 14 North Main Street Suite 200 Chambersburg, P A 17201 Respectfully submitted, METTE, EVANS & WOODSIDE By: ~t-~ Howell C. Mette, Esquire Sup. Ct. I.D. No. 7217 Daniel L. Sullivan, Esquire Sup. Ct. J.D. No. 34548 Vicky Ann Trimmer, Esquire Sup. Ct. I.D. No. 49679 3401 North Front Street P. O. Box 5950 Harrisburg, P A 17110-0950 (717) 232-5000 - Phone (717) 236-1816 - Fax DATED: J.-- \ I ,,~ .., 399194vl