A two-hour court hearing Thursday ended without a decision as to whether the sale of Toledo's Tony Packo's restaurant chain to local businessman Bob Bennett can proceed.
But after hearing arguments for and against the sale of the iconic restaurant chain to Mr. Bennett's TP Foods LLC company, Lucas County Common Pleas Judge Gene Zmuda promised to rule "soon" on the matter and gave indications he'll render a decision Friday.
The hearing was held to decide several tangential motions in the ongoing Packo's case. But the chief issue for the judge was to rule on a request by Steve Skutch, who is the court-appointed receiver for Tony Packo's Inc., for the court to accept Mr. Bennett's $5.5 million offer to buy Packo's Inc. and let Mr. Skutch proceed to sell the chain and close the deal.
But Robin Horvath, the restaurant's co-owner, made objections to the sale. Mr. Horvath's attorney, Tom Matuszak, raised a number of issues Thursday, including whether or not Mr. Bennett's purchase would include the outcome of a separate shareholder lawsuit filed by Mr. Horvath.
The judge ruled that the separate shareholder lawsuit, known as a derivative claim, belongs to the company and will be part of its assets if it is sold to Mr. Bennett.
In the derivative claim, Mr. Horvath has alleged that the company's other co-owner, Tony Packo, Jr., and his son, Tony Packo III, misappropriated company money. That suit, which was filed in August, 2010, and is still pending, seeks damages of more than $25,000 to be paid to Tony Packo's, as well as a repayment of any money spent improperly.
Further complicating Mr. Horvath's derivative claim is a grand jury indictment Wednesday of Mr. Packo III, 38, on aggravated theft charges alleging he stole $170,000 from the family business. Also charged in the same indictment was Cathleen Dooley, the company's controller, who also faces three counts of aggravated theft.
Mr. Packo III and Ms. Dooley are to be arraigned Jan. 3 in Judge Frederick McDonald's courtroom. If convicted, the pair face up to three years in prison each.
At Thursday's hearing, Mr. Matuszak argued that the indictment of Mr. Packo III has had an effect on the case and that if the indictment had come two months ago, Judge Zmuda might have ruled on Oct. 6 that Tony Packo's Inc. should be sold Mr. Horvath, and not to Mr. Bennett, who owns Bennett Management, a firm that owns and runs 26 Burger King restaurants.
"Every criminal case has a victim," Mr. Matuszak said, looking at Mr. Horvath. The indictment "certainly confirms what he said … is true," the attorney added.
Mr. Matuszak also expressed concern that Mr. Bennett already had agreed to hire Mr. Packo, Jr., and Mr. Packo III to run Tony Packo's Inc., and that if evidence existed to support Mr. Horvath's derivative lawsuit, the two Packos soon would be in a position to destroy such evidence.
Just prior to the hearing, Mr. Matuszak filed a motion asking the court to order Mr. Skutch to keep exclusive custody of the company's books and records, for fear they might be lost or destroyed, until the derivative case is resolved.
However, three attorneys, Mark Ozimek, who represents Fifth Third Bank, Chris Parker, an attorney for Mr. Skutch, and David Coyle, an attorney for Mr. Bennett, argued that neither the indictments nor Mr. Horvath's derivative claim were enough reason to hold up the sale of the company to TP Foods.
"I don't believe [the indictment] has any effect at all," Mr. Coyle said. "The fact that you're indicted doesn't prove anything at all."
Mr. Coyle added that despite the indictment, TP Foods has not severed any agreement it has with Mr. Packo III to run Tony Packo's Inc. for Mr. Bennett. "As we stand here now, [Mr. Packo III] will be an employee" of TP Foods, he said.
Mr. Parker urged the judge to allow the sale to go forward, and said every delay puts the business further in financial jeopardy.
The Tony Packo's courtroom case began in July, 2010, when Mr. Horvath filed a lawsuit against his uncle, Mr. Packo, Jr., and cousin, Mr. Packo III.
Mr. Horvath, who is the chain's chief operating officer and the son of Mr. Packo, Jr.'s sister, the late Nancy Packo Horvath, sought monetary damages and a forced sale of company shares held by the Packos. Simultaneously, he filed the separate derivative lawsuit.
In August, 2010, the court appointed Mr. Skutch of the Skutch Co. Ltd. to act as receiver and run the company because Fifth Third Bank was concerned about repayment of a $2.6 million loan it made to the company.
Contact Jon Chavez at: firstname.lastname@example.org or 419-724-6128.