United States District Court, W.D. Pennsylvania
October 6, 2005.
PETRA BUSCHMEIER, Plaintiff,
G&G INVESTMENTS, INC., Defendant.
The opinion of the court was delivered by: TERRENCE McVERRY, District Judge
MEMORANDUM OPINION AND ORDER
Before the Court are the following:
MOTION FOR RECONSIDERATION OF MOTION FOR ENTRY OF
ORDER OF COURT PERMITTING WITHDRAWAL AS COUNSEL OR,
ALTERNATIVELY, OF DEFENDANT'S FEE PETITION (Document
No. 55), BRIEF IN SUPPORT OF MOTION FOR
RECONSIDERATION OF MOTION FOR ENTRY OF ORDER OF COURT
PERMITTING WITHDRAWAL AS COUNSEL OR, ALTERNATIVELY,
OF DEFENDANT'S FEE PETITION (Document No. 56),
Response by Petra Buschmeier (Document No. 58) and
Response in Support by G&G Investments, Inc.
(Document No. 59); and
MOTION TO REQUIRE DISBURSEMENT AND CONTINUED
DISCLOSURE OF PRESENT AND FUTURE CONSUMERS PACKAGING
CLAIM AND OTHER ASSETS filed by Plaintiff (Document
No. 48), to which Defendant has not responded.
The genesis of this miscellaneous matter is the Final Judgment
entered by this Court on July 14, 2003, in favor of Petra
Buschmeier and against Defendant G&G Investments, Inc., in an
amount totaling more than the equivalent of $57,000,000 (Fifty
Seven Million Dollars), plus interest and costs at Civil Action
No. 02-610. This judgment remains unsatisfied and Plaintiff is
pursuing execution. MOTION FOR RECONSIDERATION
After a hearing in open court on October 28, 2003, the Court,
by Memorandum and Order of November 18, 2003, granted Plaintiff's
Emergency Motion for Supplementary Relief in Aid of Execution.
See Document No. 13. The purpose of that Order was to protect
and preserve the status quo of any and all assets of the judgment
debtor which were known, in existence and potentially subject to
execution in satisfaction of Plaintiff's judgment. Among the
assets of Defendant identified at said hearing, both through
answers to interrogatories and the testimony of Patrick T.
Connelly, Chief Financial Officer and Corporate Secretary of
Defendant, was an account receivable in the form of a Proof of
Claim filed in the bankruptcy of Consumers Packaging, Inc. in
Canada. Mr. Connolly testified that "[t]he value is a minimum one
million dollars and could be as high as three million dollars"
and that this asset belonged exclusively to G&G. (Transcript, p.
On November 25, 2003, Defendant's Emergency Motion for Limited
Relief from Order of Court dated November 18, 2003 (Document No.
15) was filed, in which it sought authorization to consummate a
proposed settlement of the Proof of Claim with the Consumers
Packaging bankruptcy trustee to be allowed in the amount of
$22,500,000 CDN. If approved, Defendant would receive an
immediate payment of 3.5% of said amount, $787,500 CDN, with the
potential of additional proceeds in the future. In addition,
Defendant sought permission to pay Buchanan Ingersoll P.C., the
sum of $13,240 USD and its Canadian attorneys, Bennett Jones,
LLP, the sum of $6,000 USD for legal services related to the
On November 26, 2003, the Court granted in part and denied
without prejudice the Defendant's Emergency Motion for Limited
Relief. Specifically, the Court ordered that (i) Defendant did not need the authorization of this Court to
consummate the proposed settlement of the Proof of Claim and (ii)
denied without prejudice the request to pay the proposed fees to
Buchanan Ingersoll, P.C., and Bennett Jones, LLP, subject to the
Defendant filing a fee petition related to a settlement fund with
supporting specific itemization and documentation.
During telephonic oral argument on the motion, the Court
expressed its specific concern that any request for the payment
of fees must be related to legal services which created or
resulted in the existence of the settlement fund.
Defendant's Fee Petition in Accordance With Order of Court
dated November 26, 2003 was filed on January 16, 2004. See
Document No. 35. It reflected that the Consumers Packaging Proof
of Claim settlement had resulted in Defendant's receipt of
approximately $1,125,000 CND. The Court later learned that the
settlement proceeds amounted to $877,852.44 USD. Defendant's
petition sought payment of $28,316.68 for attorney fees to
Buchanan Ingersoll, an amount significantly in excess of its
request for $13,240 on November 25, 2003, and $3,847.53 to
Bennett Jones, an amount significantly less than the $6,000
previously requested. In actuality, counsel for Defendant was
seeking payment for not only the attorney fees related to the
proof of claim settlement fund, but also all attorney fees which
Defendant had incurred, but had not yet paid, which were in any
way related to the ongoing litigation between the parties.
In the RESPONSE BY PETRA BUSCHMEIER TO MOTION FOR ATTORNEY FEES
IN ACCORDANCE WITH ORDER OF COURT DATED 11/26/03 BY G&G
INVESTMENTS (Document No. 37), Plaintiff vigorously opposed
Defendant's fee petition, especially those fees which were
totally unrelated to the establishment of the settlement fund. Defendant countered with a stern reply that it continues to incur
mounting legal fees due to Plaintiff's actions in this case and
that it should have access to its own asset, the settlement fund,
to pay its fees and costs of this litigation. Indeed, in its
Reply, Defendant sought not only the previously claimed attorney
fees but also additional legal fees and costs of $15,760.24, plus
an advance retainer of $25,000.00, for a grand total of
$69,076.92 as of February 2, 2004.
After a detailed analysis of the fee petition and the multiple
responses and replies, the Court granted the fee petition in part
and denied it in part. See Document No. 42. The Court
specifically found that its Order of November 26, 2003
"contemplated that any such fee petition would be limited to
legal services directly related to the creation, establishment
and realization of a settlement fund from the Consumers Packaging
bankruptcy action in Ontario, Canada which fund would ultimately
benefit the Plaintiff, judgment creditor Petra Buschmeier.
Defendant's fee request is inconsistent with its prior estimate
of fees communicated to the Court on November 25, 2003, . . . and
beyond the bounds of reasonableness under the circumstances and
the law as cogently set forth in the brief of Plaintiff judgment
creditor. Nevertheless, a common settlement fund has come into
existence through the collaborative effort of Buchanan Ingersoll
and its Canadian counterpart, the Bennett Jones law firm in
Toronto." (emphasis added). By Order dated July 15, 2004, the
Court granted that portion of the fee petition(s) which
represented legal services and costs which were directly
related to the Consumers Packaging bankruptcy settlement, and
denied that portion of the fee petition(s) which represented
legal services and costs for litigation representation which was
not directly related to the Consumers Packaging bankruptcy
settlement. A number of other orders were issued on July 15, 2004 which
compelled discovery responses and established an escrow for
safekeeping of stock certificates of corporate entities owned by
Approximately one week later, on July 22, 2004, Defendant filed
a Motion for Entry of Order of Court Permitting Withdrawal of
Counsel. See Document No. 49. Counsel for Plaintiff responded
in opposition. See Document Nos. 52 and 53. On August 3, 2004,
the Court entered an Order in which it denied Defendant's motion
without prejudice. The Court denied the motion to permit counsel
to withdraw because a party corporation must be represented by an
attorney-at-law in all litigation and matters for adjudication
before a court of law and no substitute or alternate counsel on
behalf of Defendant had been proposed in the motion. To date, no
substitute or alternate counsel has entered an appearance to
represent Defendant in this litigation. Thus, Buchanan Ingersoll,
P.C., must remain counsel of record for Defendant in this matter
until such time as an appearance by substitute or alternate
counsel is entered on behalf of Defendant.
Thereafter, Defendant filed the instant Motion for
Reconsideration in which it requests the Court to either "(1)
grant Buchanan Ingersoll's Motion to Withdraw or (2) modify its
Order dated July 15, 2004 which denied the Fee Petition in
significant part, and authorize G&G Investments to pay Buchanan
Ingersoll its outstanding fees as of the date of its Fee
Petition. . . ." Def's Memo. at 6.
Generally, a motion for reconsideration will only be granted
if: (1) there has been an intervening change in controlling law;
(2) new evidence, which was not previously available, has become
available; or (3) necessary to correct a clear error of law or to
prevent manifest injustice. Hirsch Corp. v. Zlotnicki, 779 F.2d 906, 909 (3d
Cir. 1985), cert. denied, 47 U.S. 1171 (1986).
Fatal to Defendant's request is that there has been no change
in controlling law or new evidence added to the record. Rather,
Defendant argues that "justice requires" that the Court grant
its motion because "Plaintiff and this Court have placed both G&G
Investments and Buchanan Ingersoll in an impossible and unfair
position." Def's Memo. at 4 (emphasis added). Defendant seems to
ignore the fact that what justice requires is that the Final
Judgment entered in favor of Petra Buschmeier and against G&G
Investments, Inc., be satisfied.
Counsel for Defendant has continuously characterized the prior
orders of this Court as precluding or prohibiting Defendant from
paying its attorneys for fees arising from representation in this
litigation. This characterization is inaccurate and disingenuous.
As previously stated, the Order of November 18, 2003, was
specifically designed to maintain the status quo and protect and
preserve the assets of the judgment debtor for the potential
satisfaction of Plaintiff's judgment. The Order of November 26,
2003, essentially authorized the realization of a settlement fund
from the Consumers Packaging bankruptcy which the Court
specifically intended to ultimately benefit the Plaintiff,
judgment creditor Petra Bushmeier. It is indeed unfortunate that
this fund appears to be the only remaining asset of Defendant
identified to date which has real value and the Defendant, in
effect, argues that it should be entitled to dissipate or consume
that fund in its continuing legal maneuvers to avoid payment and
satisfaction of Plaintiff's legitimate judgment, now worth in
excess of sixty million dollars.
Defendant labors under the misguided perception that because
the settlement fund asset has not heretofore been formally
transferred or paid over to Plaintiff in partial satisfaction of her judgment, that the asset is and should be recognized as
the property of Defendant and should therefore be available to
finance its litigation efforts to frustrate and ultimately defeat
Plaintiff's collection efforts. The Court can not and will not
countenance such an abuse of this asset.
Ideally, Defendant would have sufficient assets to not only pay
its counsel on an ongoing basis, but also satisfy Plaintiff's
judgment. However, it appears that such is not likely and the
Court, having authorized the creation of the fund for the
ultimate benefit of the judgment creditor, must continue to
preserve it for that purpose. Defendant should look to its
principal officers, directors or shareholders to aid in its
counsel fees dilemma.
Accordingly, the Court will deny the Motion for Reconsideration
filed by Defendant (Document No. 54). Buchanan Ingersoll's
Motion to Withdraw is, again, denied without prejudice subject to
renewal if and when Defendant and/or Buchanan Ingersoll has
arranged for replacement counsel for Defendant. Similarly, the
motion for reconsideration of the fee petition is denied because
the motion continues to improperly seek fees for legal services
and costs unrelated to the Consumers Packaging bankruptcy
settlement and from a fund created for the ultimate benefit of
the Plaintiff, Judgment Creditor Petra Buschmeier.
MOTION OF JUDGMENT CREDITOR PETRA BUSCHMEIER TO REQUIRE
DISBURSEMENT AND CONTINUED DISCLOSURE OF PRESENT AND FUTURE
CONSUMERS PACKAGING CLAIM AND OTHER ASSETS (Document No. 48)
Plaintiff, Petra Bushmeier, has requested the Court to order
disbursement to the trust account of her Pittsburgh counsel the
balance of the Consumers Packaging claim settlement fund in partial satisfaction of her judgment. Defendant has
disclosed this claim fund as one of its few assets having value.
In its Motion for Reconsideration, Defendant moved for certain
of those monies to be paid to Buchanan Ingersoll. In the
alternative, Defendant sought the authority to use the proceeds
of the Consumers Packaging settlement fund to pay Buchanan
Ingersoll for overdue fees for legal services and costs together
with a reasonable retainer for anticipated future legal expenses.
Defendant argues that if "Buchanan Ingersoll is not permitted to
withdraw, principles of fairness and justice require that
certain of the proceeds ? be paid to Buchanan Ingersoll." Def's
Resp. at 16 (emphasis added).
As discussed supra, the Motion for Reconsideration filed by
Defendant will be denied. To use the Defendant's own words
"principles of fairness and justice require that" the outstanding
judgment in this matter be satisfied to the extent possible.
Accordingly, the Motion to Require Disbursement and Continued
Disclosure of Present and Future Consumers Packaging Claim and
Other Assets will be granted.
AND NOW, this 6th day of October, 2005, in accordance with the
foregoing Memorandum, it is hereby ORDERED, ADJUDGED, AND
DECREED as follows:
1. The Motion for Reconsideration of Motion for Entry of Order
of Court Permitting Withdrawal as Counsel Or, Alternatively, of
Defendant's Fee Petition filed by Defendant (Document No. 55)
is DENIED. 2. The Motion to Require Disbursement and Continued Disclosure
of Present and Future Consumers Packaging Claim and Other Assets
filed by Plaintiff (Document No. 48) is GRANTED. Defendant,
G&G Investments, Inc., is ORDERED FORTHWITH to direct
Enterprise Bank to disburse and transfer to Petra Buschmeier
through her Pittsburgh counsel, Robert J. Ray, Esquire, and
Burns, White & Hickton, LLC, the entire balance of business
savings account # 5007003576, including all interest accrued to
date, in partial satisfaction of the Final Judgment Order of this
Court on July 14, 2003. Such funds shall be wired directly from
Enterprise Bank to the trust account for counsel for Petra
Buschmeier as follows:
Robert J. Ray, Esquire
Burns, White & Hickton, LLC
PNC Bank, NA
One PNC Plaza, 249 Fifth Avenue
Pittsburgh, PA 15222-2707
Transit Number: 043000096
Account Number: 3907468
FBO: Burns, White & Hickton IOLTA Account.
A copy of documentary evidence confirming this disbursement and
transfer of funds shall be filed of record forthwith.
3. It is further ORDERED that Defendant G&G Investments,
Inc., shall immediately disclose to Petra Buschmeier, her
Pittsburgh counsel, and the Court the current status of
Defendant's claim in the Consumers Packaging bankruptcy action,
the receipt of any additional funds related to the Consumers Packaging claim and the
potential of additional funds therefrom, as well as any assets it
has or may receive from any other source whatsoever.
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