Ex-owner asks court to undo Packo's sale

Filing seeks upset of rulings after appeal

8/21/2012

Former Tony Packo's Inc. co-owner Robin Horvath is going back to court in a bid to regain control of the famed Toledo restaurant chain.

Mr. Horvath filed a memorandum with Ohio's 6th District Court of Appeals asking the court to undo the Feb. 6 sale of the company to fast-food businessman Bob Bennett, owner of TP Foods LLC.

In the memorandum, filed Thursday, Mr. Horvath argued that an appeal he filed Oct. 20, which contested several rulings by Lucas County Common Pleas Court Judge Gene Zmuda, should have suspended the lower court process until his October appeal could be settled. It was at that point the appellate court took over jurisdiction in the case.

Assuming the appellate court had jurisdiction, the memorandum states, any decisions by Judge Zmuda that occurred after the October appeal was filed should be rendered invalid -- including the sale of Packo's to TP Foods and three later appeals filed by Mr. Horvath.

"The Horvaths [Robin and his wife, Terry] submit that the trial court patently and unambiguously lacked jurisdiction to issue the December 19 and December 22, 2011, orders due, in part, to the Horvaths' then-pending appeals of the trial court's Sept. 20 and Oct, 7, 2011, orders," the memorandum states.

Judge Zmuda's December orders gave a court-appointed receiver the authority to sell Packo's assets, then ordered the receiver to sell them to TP Foods.

In his Oct. 20 appeal, Mr. Horvath had objected to several rulings by the trial court, including denial that a transcript be created for a conversation held in Judge Zmuda's chambers, denial of a motion to extend a deadline to submit offers to buy Packo's, and denial of a motion by Mr. Horvath for relief from a financial judgment that forced Tony Packo's Inc. into receivership.

The judgment remains on appeal, but the appellate court refused to order the transcript be created.

Mr. Horvath argued that because those Oct. 20 issues have not been resolved, the appellate court has jurisdiction in the case, and his Nov. 3 appeal of a decision by Judge Zmuda to accept an offer from TP Foods, and his Dec. 23 appeal of the sale to TP Foods should all be dismissed, along with the sale itself.

Mr. Horvath also argues that a Jan. 12, 2012, complaint he filed seeking to vacate an order by Judge Zmuda confirming intellectual property rights of Packo's and the sale of assets, and restraining the trial court from taking any actions that would interfere with the appellate court's future actions, be dismissed.

The memorandum suggests several actions that the appellate court could make while deciding Mr. Horvath's appeal.

It asks the appellate court to "immediately unwind" the sale to TP Foods and take control of the receivership until the appeal is settled. It also suggests that the court can replace receiver Steven Skutch if it chooses and order Packo's be sold to Nancy Packo LLC, the company Mr. Horvath formed to bid on Packo's in a court-sanctioned auction that was ultimately won by TP Foods.

It also asks the appellate court to order mediation to develop a solution amicable to all parties involved.

The memorandum suggests Mr. Horvath would buy Packo's as its exists now and that he would settle a debt owed to Fifth Third Bank, which holds a $2.6 million loan made to the restaurant chain.

The filing goes on to suggest TP Foods pay a license fee in exchange for exclusive rights to open new Tony Packo's restaurants and that all intellectual property, including recipes, be put into a family trust, to which royalties would be paid from licensing agreements with restaurant, food, and retail operations. The Packo family heirs would receive payments from the royalties.

Last, the Horvaths would waive any pre-existing claims against Fifth Third, Mr. Skutch, and TP Foods and its agents, including Mr. Horvath's uncle Tony Packo, Jr., and his cousin Tony Packo III.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.