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Published: Wednesday, 4/27/2011

Judge readies rulings on Packo's

Action expected in 6 weeks; family differences unresolved

BY JON CHAVEZ
BLADE BUSINESS WRITER

With the potential sale of Tony Packo's Inc. awaiting court action, Lucas County Common Pleas Judge Gene Zmuda prepared Tuesday to make rulings in the next six weeks on several motions in litigation involving feuding owners of the Toledo restaurant chain.

During an hour-long court hearing, the judge refrained from acting on either a pending bid or a separate purchase offer for assets of the business. Also revealed was that efforts failed to resolve family differences in a closed-door April 15 mediation session.

Robin Horvath, chief operating officer of Tony Packo's, has been battling President Tony Packo, Jr., and Tony Packo III, who is a manager of Tony Packo Food Co., for control of the Packo's chain since July. Mr. Horvath, who owns half the company, has alleged at least $300,000 in company funds was misappropriated by the Packos, and he is seeking monetary damages and a forced sale of company shares held by the Packos, who jointly own 50 percent of the business.

In a separate shareholder derivative lawsuit, Mr. Horvath seeks damages of more than $25,000 to be paid to Tony Packo's, as well as a repayment of any money spent improperly by the Packos. That suit was filed in August.

Since the initial lawsuit, the company has been put into receivership by the court, and several motions have been filed to address numerous issues that have arisen in the case.

The judge said he will rule on a motion by receiver Steven Skutch, who is seeking instructions on whether Mr. Horvath's derivative lawsuit was properly presented and how to handle the claim.

He will decide upon a motion by Darrell Ducat, a former bowling alley owner and Mario Procaccini, a Huntington Insurance executive, that seeks to quash subpoenas requesting information about them. The two are part of a bid submitted by the Packos to buy the company.

The judge is expected to act upon motions by Cathleen Dooley, Packos and Packo's Inc. controller, to dismiss Mr. Horvath's separate shareholder derivative lawsuit and on motions regarding the garnishment of assets of Mr. Horvath and Tony Packo, Jr., by Fifth Third Bank, which is owed $2.7 million by Packo's Inc.

On Dec. 17 a closed auction was held by Mr. Skutch to sell Tony Packo's Inc., but the only bidder was Mr. Packo, Jr., and his son. Mr. Horvath did not submit a bid because he disagreed with the rules of the auction process, but he later submitted an undisclosed "offer" to purchase the company.

Fifth Third, the loan holder, could initiate foreclosure proceedings and force a sale of the assets.

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



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