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HomeMy WebLinkAbout95-01865 - ., 12, The plaintiffs require an accounting of all funds received by Mr. Whitley from July 15, 1993 through July 14, 1994, They seek the following: a, Appropriate payments from the defendant based on the funds removed by the defendants from the business; b, An accounting of all funds and expenses of the partnership from October 1993 through July 1994; c, The distribution of all the partnership assets; d. The return of the sum of Twenty.Five Thousand and nollOO ($25,000,00) Dollars paid to the defendant by the plaintiffs, e, Any other equitable relief deemed appropriate by the Court; and f, Reasonable legal fees required to bring this litigation by the plaintiffs, 13, The defendants defrauded the plaintiffs of their service and their financial resources, A copy of the checks provided by the plaintiffs are marked as Exhibit "D" and are made a part of this complaint. 14, The defendants, Larry R, Whitley and Susan E, Schorr, used funds generated by the business for their sole use and enjoyment without providing any accounting or explanation to the plaintiffs, . ----.., ..",.... '. PARTNERSHIP AGREEMENT THIS AGREEMENT is executed this 1st day of January, 1994, between LARRY WHITLEY and WILLIAM IPOCK, hereinafter collectively referred to as the "Partners". WITNESSETH: 1. Name and Business. The Parties do hereby form a Partnership under the name of LARRY'S AUTO REPAIr. - FRONT STREET, to acquire real and personal property and to acquire, own, sell, option, build upon, alter, repair, rent, lease, operate, invest in, lend on, borrow against, manage, develop and otherwise deal with real and personal property of any kind and description, as agreed between the Partners, The partnership intends to conduct an automotive repair business. The principal office of the Partnership shall be maintained at 5207 Front street, Harrisburg, Dauphin County, Pennsylvania 17110. The ownership interests of the Partners subject to other provisions of this Agreement, shall be as follows: Larry Whitley 51% william Ipock 49% 2. Term. The Partnership shall begin on January 1, 1994, and shall continue until terminated, provided, however, that any acts, including, but not limited to the entry into negotiations for and the execution of any agreements I commitments, contracts, writings or other understandings by any Partner in furtherance of the business of the Partnership prior to such date is hereby ratified and confirmed as an authorized and valid action of the partnership. 3, Capital. the sum of Twenty Five The capital of the partnership shall be Thousand Dollars ($25,000.00) in cash, F.lCIIIIlIT "An .. comprised solely of an initial contribution by William Ipock of the $25,000,00. However, all equipment and supplies contributed to the Partnership by Larry Whitley shall be utilized by both Partners, but said equipment and supplies shall remain the property of Partner, Larry Whitley. The Partners agree to contribute in proportion to their respective ownership interests any additional funds necessary to organize the partnership or to enter into and carryon the business of the Partnership, A separate capital account shall be maintained for each Partner, No Partner shall withdraw any part of his capital account without the written consent of the other Partners. If the capital account of a Partner becomes impaired, his share of subsequent partnership profits shall be first credited to his capital account until that account has been restored, before such profits are credited in his income account. 4. Profits and Loss. The net losses, net profits and cash flow of the Partnership shall be allocated among and distributed to the Partners as follows: Larry Whitley William Ipock 50% 50% A separate income account shall be maintained for each Partner. Partnership profits and losses shall be charged or credited to the separate income account of each Partner. If a Partner has no credit balance in his income account, losses shall be charged to his capital account. Profits and losses shall be credited or debited to the income account of each Partner as soon as 2 practicable after December 31 of each year or at such more frequent times as agreed to by the Partners. 5. Salaries and Drawinqs. The cash flow of the Partnership, if any, shall be distributed at the discretion of the Partners, but at least annually, No Partner shall receive a salary, compensation or guaranteed payments unless such salary, compensation or guaranteed payments be approved by a unanimous vote of the Partners. In addition to distributions of cash flow by the Partners, each Partner may, from time to time, withdraw the credit balance inuring to him by reason of his income account with the unanimous consent of all Partners. 6. Interest. No interest shall be paid on the initial contributions to the capital of the Partnership or on any subsequent contributions of capital except for interest earned on money deposited in an interest-bearing checking account. If, however, the Partners unanimously agree to borrow money from any Partner, and that borrowing is evidenced by a note executed by all Partners, then interest in accordance with the terms of the note may be paid. 7. Manaqement. Duties and Restrictions. Each of the Partners shall have a voice in the management of the Partnership pursuant to his ownership interests and shall have the right and power to do and perform all acts incident to the business of the Partnership and deemed by said Partners to be desirable and beneficial to the interest of the Partnership; provided, however, that no partner, without the consent of both Partners, may: (a) Borrow money in the Partnership name for Partnership purposes or utilize collateral owned by the Partnership as security for such loans; 3 (b) Assign, tranufer, pledge, compromiue, or l"elo,lUO /lny of the claims of, or debts due, the Pal"tnen;hip, except upon payment in full, or arbitrate of com;ent to the partner of ilny disputes or controversies of the Partnership; (c) Make, execute, or deliver any aDsignment for tho benefit of creditors; or any bond, confession of judgment, chattol mortgage, deed, guarantee, indemnity bond, surety bond, or contract to sell or contract of sale of all or substantially all of tho property of the Partnership; (d) Mortgage any Partnership real eotate or any interuot therein or enter into any contract for any ouch purpoue; (e) Pledge or hypothecate or in any manner tranufer hiu interest in the Partnership, except to the other partioo to thio partnership Agreement as provided herein; (f) Become a surety, guar/lntor, or accommodation p/lrty to any obligation; (g) Make oral or written contractu and/or purchaoeo in excess of Two Hundred Dollars ($200.00), except fOl' emergoncy situations. Each Partner may have other busineuu intereutu ilnd may engage in any other business or trade, profeuuion or employment whatsoever, on his own account, or in Partnoruhip with or au an employee of or as an officer, director or uharoholder of /lny other person, firm or corporation, and he shall not be l"olJuired to devote his entire time to the business of the Partnership, No Partner shall be obligated to devote more time and attention to the conduct of the business of the Partnership than uhall be required for tho supervision of the ownership, operation and manilCJement of the partnership. B. in its ~ All funds of the Pal.tneruhip uhall be depoGited name in such cheCking account Ol' accountu ilU uhall be 4 designated by the Partners. Withdr~wals therefrom may be made upon checks signed by any Partner. 9. Books. The partnership books shall be maintained at the office of the Partnership, provided that each Partner or his duly authorized attorneys or accountants shall at all reasonable times have access thereto, The taxable year of the Partnership shall be the calendar year. The books shall be closed and balanced at the end of each such calendar year. Preparation of annual statements is the responsibility of both Partners, Maintaining all prepared statements, other relevant documents and distributing all information to the other Partner shall be the responsibility of Larry Whitley, Partner. Preparation of the annual Partnership tax returns will be the responsibility of Cr.aig A. Diehl, Esquire, C.P.A, 10. Voluntarv Termination. The partnership iUay be dissolved at any time by agreement of the Partners, in which event the Partners shall proceed with reasonable promptness to sell any personal or real property owned by the Partnership and to liquidate the business of the Partnership. Upon dissolution, the assets of the Partnership business shall be used and distributed in the following order: (a) to payor provide for the payment of all Partnership liabilities and liquidating expenses and obligations (including loan repayments to the Partners so entitled, if any); (b) to pay to each Partner having a positive balance in his income account the amount thereof; (c) to balance the capital accounts Of--J 7 the Partners, in proportion to their Partnership Interests; (d) to discharge the balance of the capital accounts of the Partners; and (e) any excess shall be distributed prorata in accordance with the Partnership Interests, 5 11. Withdrawal. (a) Any Partner shall havo tho right to withdl'aw from the Partnership by writton notico of intention to withdraw uerved upon the other Partner(s) by First Class mail within uixty (GO) days prior to the effective dato of termination, The withdrawal of a Partner shall havo no effect upon the continuation of the Partnership business. The remainincj Partnor(o), ohall, at his option, have the right, (1) to purchaoo himuelr the withdrawing Partner's interest in the Pal'tnoruhip; or (:!l to terminate and liquidate the Partnership bUDinouu. (b) If the remaining Pal'tnol' doctu to purchaDo the interest of the withdrawing Partnol' in thu P,lI"t1lOl'ullip, tho mot hod for determining purchase pr ico and pilymullt ullilll hu tho uame all stated in paragraph 13 with l"ofol'enco to thu purchiloo of a decedent's interest in the Partnorohlp, excupt thilt if tho withdrawing Partner elects a slncjlo paymunt, tho pUrCIh111U price shall be eighty (SOt) pOl"Cont of tho v<lluo of tho Pllrtnershlp Interest as determined in accol"dance with p,lraCj l',lph 13 payable within sixty (GO) days. If <I ulngle paymont io not olocted, a twenty-five percent (25\) payment of tho withdl"ilwlncj Partner'S interest shall be transferred within olxty (GO) dayu from the withdrawal date with the balance pluu Intorout at prime pluu one and one/half (1 1/2) percent, to be paid within ono yoar from the withdrawal date or upon mutually aCjl'outl upon tCl"mU of the Partners, (e) If the remaining Partnel' eloctu not to purchase the interest of the withdrawing Partnol' in tho Partneruhip, tho remaining Partner(s) shall oithor conuunt to a propolled salo of tho withdrawing Partner's Intol'Cn:t 01' all P,1l'tnurlJ uhall pl"oeood with reasonable promptneuu to uell anti to llquldato the businesD of tho Partnership, ~'he procotluro iHl to I ilJllidiltlon and distribution of tho assets of the Partlloruhip buulnuuLl ullilll be the same as stated in paragraph 10. c, (d) If the withdrawing Partner decides to sell and assign his partnership Interest, and if the remaining Partner consents to such transfer, the Partner(s) acquiring said interest shall succeed to this interest of the withdrawing Partner for all purposes of this Agreement, The acquiring Partner(s) shall stand in the place of the withdrawing Partner, shall enjoy all rights and bear all liabilities just as the withdrawing Partner would have so done had he remained a Partner hereunder, Any acquiring Partner(s) shall execute a Joinder Agreement which shall be a counterpart of this Agreement and any revisions or restatements hereof. 12. Death. The Partnership shall be dissolved by the death of a Partner. The remaining Partner may, at his option, exercisable in writing, purchase and retire the interest of the deceased Partner by giving written notice to the personal representative of the deceased Partner's estate within ninety (90) days after the death of the deceased Partner. The Partner purchasing such interest shall be the sole and exclusive owner of such interest. Notwithstanding any other provision in this Partnership Agreement to the contrary, the purchasing Partner shall have the right, at his respective option, to prepay the purchase price, in whole or in part, at any time, Any such prepayment shall be applied first to principal and then to interest. The price at which the Partnership must pay to beneficiaries or the price the surviving Partner may purchase the interest of the deceased Partner hereunder shall be determined in accordance with provision 13 hereinafter. The payment of the deceased Partner's interest shall be executed by a payment equivalent to twenty-five percent (25%) of the deceased Partner's interest at the date of death payable within ninety (90) days after the date of death with 7 " the remaining balance plus interest at prime plus one and one-half (1 1/2) percent, to be paid within one year from the date of death or upon mutually agreed upon terms of all Partners. 13, Valuation of the Interest of a selling or Deceased Partner. On exercise of any aforesaid options described in paragraph 11 or 12 of this Agreement, the remaining Partner shall pay to the person legally entitled thereto the fair market value of such partnership interest together with the full withdrawn portion of such deceased, withdrawing or terminated Partner's distributive share of any net profits earned by the Partnership between the date of such accounting and the date of dissolution of the Partnership, Fair Market Value for the purposes of determining the valuation of property shall be that value agreed upon among the Partners, or if they are unable to agree upon a value, by a fair market value determined by two independent appraisers in the area and taking the average of their two valuations, with one appraiser being selected by the outgoing Partner or personal representative of the deceased Partner. 14, Vot.ing", Except as otherwise provided herein, each Partner shall be entitled to one vote in all matters requiring unanimous consent or other Partnership decisions provided that the death, insolvency, bankruptcy or placing into receivership of any Partner shall terminate his voting rights, managerial rights and any and all other decision-making rights hereunder; in such event, the remaining Partner(s) shall have full power and authority to vote, manage and decide as to all Partnership matters, 15. liability companies Insurance. The Partnership shall procure adequate and f ire insurance; the type, amount and company or may be determined by the Partners, 8 .. . . t 16. Assicmment, Except as provided herein, ntai ther this Agreement, nor any interest of any of the parties herein (including any interest in monies belonging to or which may accrue to the Partnership as a result of rentals or sales of property) may be assigned, pledged, transferred or hypothecated, without the prior written consent of the other Partner. The right of any person, firm or corporation Claiming by, through or under any party hereto (including, but not limiting the same to judgment or other creditors, receivers, trustees, assignees, garnishees, executors, administrators, etc.) to assert any claim against the right, title or interest of any Partner shall be limited solely to the right to claim or receive after the distribution of cash receipts to the respective parties has been completed and then only subject to th~ equities of the other parties as in this Agreement set forth, 17. Interpretation. This Agreement shall be interpreted in accordance with the laws of the Commonwealth of Pennsylvania. Paragraph headings are for convenience only. This Agreement shall be binding upon the parties hereto, their heirs, representatives, SUccessors and assigns. IN WITNESS WHEREOF, the parties hereto, INTENDING TO BE LEGALLY BOUND, have executed this Agreement the day and year first above written. WITNESSES: PARTNERS: ( r!tJ.';wJl'kc~y"1J ~~i(ti"7po-t +~, S.~ 9 .'f~'~~, ADDENDUM TO PARTNERSHIP AGREEMENT ~_'t"..i!'" ,,-:' " ~ ,,; 'IJ. ,j jj.,.' ""'; '"," THIS ADDENDUM TO PARTNERSHIP AGREEMENT is executed this J_O~ day of May, 1994 between LARRY WHITLEY and WILLIAM IPOCK, and hereby modifies the terms set forth in the Partnership Agreement dated January 1, 1994. WITNESSETH I 1. Profits and Losses. The net losses, net profits and cash flow of the partnership shall be allocated among and distributed to the Partners as follows: william Ipock 100\ Larry Whitley 0\ A separate income account shall be maintained for each partner. partnership profits and losses shall be charged or credited to the separate income. account of each Partner. If a Partner has no credit balance in his income account, losses shall be charged to his capital account. Profits and losses shall be credited or debited to the income account of each Partner as soon as practicable after December 31 of each year or at such more frequent times as agreed to by the Partners. 2. Salaries and Draws. The cash flow of the Partnership shall be distributed at the discretion of William Ipock. However, 1 FJCUIBIT "B" , ;~t1:"1,l-fl"'l~: .-'\_.,:.- ~, ~;i:!~,J.lr.riK:.il1)':;J>i'~ . .' .. --- - ---- --- --- Larry Whitley, shall receive a guaranteed monthly payment of $2,500.00 for rent and $326.00 for reimbursement of health insurance costs, Subsequent to these monthly payments, William Ipock may receive a salary or compensation at his discretion. 3. Manaaement. Duties and Restrictions. Partner, William Ipock, shall be responsible for the management of the Partnership and shall have the, right and power to do and perform all acts incident to the business of the Partnership and deemed by said Partners to be desirable and beneficial to the interest of the Partnership; provided, however, that no Partner without the consent of both Partners, may: (a) Borrow money in the Partnership name for Partnership purposes or utilize collateral owned by the Partnership as security for such loans; (b) Assign, transfer, pledge, compromise, or release any of the claims of, or debts due, the PartnerShip, except upon payment in full, or arbitrate of consent to the partner of any disputes or controversies of the Partnership; (c) Make, execute, or deliver any assignment for the benefit of creditors; or any bond, confession of jUdgment, chattel mortgage, deed, guarantee, indemnity bond, surety bond, or contract to sellar contract of sale of all or substantially all of the property of the partnership; (d) Mortgage any Partnership real estate or any interest 2 .' .. therein or enter into any contract tor any such purpose; (e) Pledge or hypothecate or in any manner transfer his interest in the Partnership, except to the other parties to this Partnership Agreement as provided herein; (f) Become a surety, guarantor, or accommodation party to any obligation; (g) Make oral or written contracts and/or purchases in excess of Two Hundred Dollars ($200.00), except for emergency situations. Each Partner may have other business interests and may engage in any other business or trade, profession or employment whatsoever, on his own account, or in Partnership with or as an employee of or as an officer, director or shareholder of any other person, firm or corporation, and he shall not be required to devote his entire time to the business of the Partnership. No Partner shall be obligated to devote more time and attention to the conduct of the business of the Partnership than shall be required for the supervision of the ownership, operation and management of the Partnership. 4. Books. The provision set forth in the original Partnership Agreement concerning the books shall continue to be applicable. However, William Ipock shall submit to Larry Whitley monthly accounting records for review. J ~ . . ~I ~', ,;~,1~t i, ~':~l :, ' i , , !'J' .f' , " ' ~jj ,.." . . ~, ";. \' , f , ., ., '/' "Ii: I I . , f . f.l' , . '.' . ~\ ~.. ~ , I~ l . I . " ., ....f 'I~\ . 'Il!' ,~ AGRBEMENT DISSOLVING GBNERAL PARTNERSHIP This Agreement is made on July 15, 1994 between LARRY WHITLEY (hereinafter "Whitley"), and WILLIAM IPOCK (hereinafter "Ipock"). ARTICLE I, RECITALS Description of Partnership 1.01. Whitley and Ipock (collectivelY referred to as the partners) have been and now are all of the Partners of a business under a firm name of LARRY'S AUTO REPAIR - FRONT STREET which is engaged in the automotive repair business. partnership Agreement 1.02. The Partners entered into the Partnership and have continued in Partnership under the provisions of a written agreement dated January 1,1994 (Partnership Agreement), a copy of which is attached to this Agreement as Exhibit A and incorporated by reference in this Agreement. Desire to Dissolve 1.03. The Partners now desire to dissolve the Partnership and Whitley wishes to continue in business using the same name and any property acquired. Ipock hereby agrees to withdraw as a Partner and Whitley hereby agrees to compensate Ipock for his forty-nine percent (49\) share in the Partnership as fully described hereinafter. ~:JUI\ III T "e" Release and Indemnification 3.02. tihitley agrees to indemnify and release Ipock for all present and future Partnership liabilities and any and all claims or actions at law or equity pertaining to Larry's Auto Repair II. similarly, Ipock hereby releases Whitley and Larry's Auto Repair II from any and all claims or actions at law or equity in exchange for the mutual promises and covenants contained herein. Payment of Purchase Price 3.03. The purchase price to be paid to Ipock shall be assumption by Whitley of any liabilities of the Partnership plus $15,500.00 paid as follows: (A) payment of Five Thousand Dollars ($5,000.00) at execution of this Agreement, receipt thereof is hereby acknowledged; (B) Payment of Three Thousand Dollars ($3,000.00) on or before August 15, 1994; and (e) Payment of Seven Thousand Five Hundred Dollars ($7,500.00) to be paid in full on or before September 15, 1995 with monthly payments of $645.55 commencing on september 15, 1994 and on the fifteenth of each month subsequent thereto with interest accruing at 6' per annum. Whitley may prepay the principal amount outstanding in whole or in part at any time during the repayment period. Responsibility for Profits and Losses 3.04. Ipock shall be allocated, shall be responsible for, and shall pay all income taxes on all profits and losses for the period from January 1, 1994 to July 15, 1994 as provided by the terms of the Partnership Agreement.