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HomeMy WebLinkAbout2005-1640 Civil IN RE: THE LOST VALLEY, LLC IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 05-1640 CIVIL TERM IN RE: PETITION FOR DISSOLUTION OF THE LOST VALLEY, LLC OPINION AND ORDER OF COURT Bayley, J., September 28, 2005:-- Pursuant to the Limited Liability Company Law of 1994,15 PaC.S. Section 8901 et seq., Jeffrey T. Kottmyer, Gary S. Yannone, and Nolen R. Chew, Jr., formed The Lost Valley, LLC. They entered into an operating agreement effective November 1, 2003. The "Purposes" set forth in the Agreement are: Property management of two adjoining parcels of real estate at 1555 McClure's Gap Road, one improved, one unimproved; Rental of said property, or portions thereof, from time to time, for residential or commercial purposes, as the opportunities and interests of the LLC dictate; Investigation and development of the potential of the site to be used for scientific, educational or cultural purposes as an archeological or paleontological site andlor museum. The assets of The Lost Valley, LLC, include artifacts discovered on a property in Lower Frankford Township, Cumberland County, that is now owned by Kottmyer, Yannone and Chew.1 The artifacts are carvings and etchings thought by them to be approximately 10,000 years old. Despite their efforts, the artifacts have not been authenticated. Therefore, they have no current value. If authenticated, they could have significant value. The few other tangible assets of the company are of nominal 1 An order directing partition of that property has been granted in a companion case. 05-1640 CIVIL TERM value.2 2 A laptop computer, some space heaters, a refrigerator, a roaster oven and about $50. -2- 05-1640 CIVIL TERM The company has no liabilities or debt. Kottmyer and Chew have come to an impasse with Yannone as to the operation of The Lost Valley, LLC, and seek an order of dissolution. The impasse warrants the entry of an order of judicial dissolution under 15 PaC.S. Sections 8971 (a)5 and 8972, as provided for in Article XII, Paragraph 12.01 (d) of the Operating Agreement. Paragraph 12.02 of the Agreement entitled Liquidation and Termination provides: (a) Upon the dissolution of the Company, the members shall liquidate the assets of the Company and apply and distribute the proceeds thereof as contemplated by this Agreement. As soon as possible after the dissolution of the Company, a full account of the assets and liabilities of the Company shall be taken, and a statement shall be prepared by the accountant then acting for the Company. A copy of such statement shall be furnished to each of the members within ninety (90) days after such dissolution. Thereafter, the assets shall be liquidated as promptly as possible and the proceeds thereof shall be distributed to the members as follows: (i) The expenses of liquidation and the debts of the Company, other than the debts owing to the members, shall be paid. Any reserves shall be established or shall be continued which the members deem reasonably necessary for any contingent or unforeseen liabilities or obligations of the Company or its liquidation. Such reserves shall be held by the Company for the payment of any of the aforementioned contingencies, and at the expiration of such period as the members deem advisable, the Company shall distribute the balance thereafter remaining in the manner and the priority provided in the following subsection. (ii) Any member's loans (including unpaid interest and principal) as are owed shall be repaid according to their terms (pro rated according to the amount owed). (iii) The balance, if any, shall be distributed to the members in accordance with the positive balances in their book capital accounts after their capital accounts have been adjusted to reflect the allocation of any profit or loss. b. Upon dissolution of the Company, each member shall look solely to the assets of the Company for the return of his investment, -3- 05-1640 CIVIL TERM and if the Company's assets remaining after payment and discharge of debts and liabilities of the Company, including any debts and liabilities owed to anyone or more of the members, is not sufficient to satisfy the rights of a member, he shall have no recourse or further right to claim against any other member. c. If any assets of the Company are to be distributed in kind, such assets shall be distributed on the basis of the fair market value thereof and any member entitled to any interest in such assets shall receive such interest therein as a tenant in common with all other members so entitled. If the members cannot otherwise agree between themselves, the fair market value of such assets shall be determined by an independent appraiser to be selected by the Company's accountant. (Emphasis added.) There is no company accountant. Chew, the treasurer, shall provide Yannone the opportunity to review and copy all books, records and accounts of the company. The tangible assets shall be divided between the parties as agreed, or sold as agreed with the proceeds divided equally. Kottmyer and Chew, after stating in their brief that "The Operating Agreement signed by the parties provides for the distribution of assets in equal thirds to each member, in accordance with Pennsylvania law," maintain that the court must "[u]se it's [sic] discretion in its determination and definition of how to divide these assets into 'thirds.'" They purpose that the artifacts be conveyed to the Frankford Museum Society, or in the alternative, to themselves in equal shares to be disposed of as they see fit. Yannone proposes that certain artifacts that he designates be distributed to him, with all others being distributed to Kottmyer and Chew. In the alternative he purposes that the artifacts be divided into two classes that he designates, with each party receiving a third of each class. -4- 05-1640 CIVIL TERM Whatever the three parties initially intended for the artifacts has been rendered moot by their impasse in operating The Lost Valley, LLC. Dissolution means that the artifacts must be distributed between them equally. Because the artifacts have no value, they can be distributed immediately. The artifacts shall be assembled in one location and accounted for by the three parties. They shall meet and alternatively select artifacts until they are all distributed. ORDER OF COURT AND NOW, this day of September, 2005, IT IS ORDERED: (1) The Lost Valley, LLC, IS DISSOLVED. (2) Nolen R. Chew, Jr. shall forthwith provide Gary S. Yannone an opportunity to review and copy all books, records and accounts of the company. (3) The tangible assets of the company shall be forthwith divided between the parties as agreed, or sold as agreed with the proceeds divided equally. (4) The artifacts shall be distributed equally between Jeffrey T. Kottmyer, Gary S. Yannone and Nolen R. Chew, Jr. (5) The artifacts shall forthwith be assembled in one location and accounted for by the three parties. They shall meet and alternatively select artifacts until they are all distributed. The order of selection shall be determined by using a deck of cards. Each party shall draw a card from the deck. Aces are high and deuces are low. If two or more persons draw the same value card, the deck shall be reshuffled with another draw or draws until each person has a different value card. The person with the highest card -5- 05-1640 CIVIL TERM shall choose an artifact first, the person with the middle card shall choose second, and the person with the lowest card shall choose last. Each person shall then continue to select artifacts in sequence until they are all distributed. By the Court, Edgar B. Bayley, J. Carl C. Risch, Esquire For Jeffrey T. Kottmyer and Nolen R. Chew, Jr. Albert N. Peterlin, Esquire 1013 Mumma Road Suite 100 Lemoyne, PA 17043-1144 For Gary S. Yannone :sal -6-