The opinion of the court was delivered by: HIGGINBOTHAM
Re: Petition for an Accounting of ARA Services, Inc.
HIGGINBOTHAM, District Judge.
On May 1, 1968, the Spectrum Arena, Inc. (hereinafter referred to as the "Spectrum" or "Debtor") was involuntarily placed into reorganization under Chapter X of the Bankruptcy Act of 1898 (11 U.S.C. § 501 et seq.). As has been more fully documented in my prior Opinions of August 9, 1971, 330 F. Supp. 125, August 31, 1971, 340 F. Supp. 755, and October 28, 1971, 340 F. Supp. 767, the Spectrum serves as a complete multi-service sports and general entertainment facility. Jerry Wolman, the founder and builder of the Spectrum, at an early stage entered into discussions and finally an agreement with Automatic Retailers of America, Inc. (ARA) to provide food and other concession services for the spectators attending the Arena's many events.
In addition to the normal bill of fare of such arenas the parties to the original discussion, Wolman and ARA, agreed to the creation of a private membership club within the Spectrum to serve those fans whose tastes would only be satisfied by the extraordinary. The parties have stipulated the history as the following:
"On or about May 1, 1967, the Spectrum Arena, Inc., assumed Wolman's obligations under the Concession Agreement and from that date on, ARA treated the Spectrum Arena, Inc. as being in Wolman's position for purposes of accounting and payment under the Concession Agreement."
The original agreement between the parties is set forth in a Letter Agreement of July 26, 1966, (Exhibit A to Stipulation, Docket No. 270) between ARA and Wolman and signed by both. In the original Letter Agreement of July 26, 1966 the parties provided in the last paragraph on page 5 that ARA would prepare "a more detailed agreement along these lines which, when executed, will supercede this agreement." In fact, on July 27, 1966,
ARA and Wolman signed the Concession Agreement in issue here. (Exhibit "A" to Docket No. 217.)
Petition for an Accounting:
At issue in this ancillary matter involving the Spectrum is whether ARA has properly accounted for funds due the Spectrum under the above-mentioned Concession Agreement, and before reaching the merits, a short procedural history of this proceeding is appropriate.
On September 16, 1971, Philip P. Kalodner
filed a Petition to Require an Accounting of ARA Services, Inc., with respect to all receipts and expenditures in its management of the Blue Line Club, the above-described private membership club physically located within the Spectrum but under the contract management of ARA. This petition alleged two counts, both of which I held under advisement. On October 28, 1971, I filed a major Opinion disposing of some of the issues involved in the Spectrum matter, including, inter alia, a finding that the Debtor was insolvent ( Opinion of October 28, 1971, 340 F. Supp. pp. 778-779).
Further, I stated that the issue raised in the instant petition did not bear on the issues disposed of in that Opinion. (Opinion of October 28, 1971, p. 782). My rationale was that the magnitude of the funds which could be due the Spectrum (even if all the relief asked by Mr. Kalodner in his petition were granted) would not be sufficient to retrieve the Spectrum from a state of patent insolvency to even an arguably solvent position.