In re Bray Enterprises, Inc., Bankruptcy No. 82-233
| Decision Date | 23 January 1984 |
| Docket Number | Bankruptcy No. 82-233,Adv. No. 83-0093. |
| Citation | 38 BR 75 |
| Court | U.S. Bankruptcy Court — District of Vermont |
| Parties | In re BRAY ENTERPRISES, INC., Debtor. BRAY ENTERPRISES, INC., Plaintiff, v. FIRST VERMONT BANK AND TRUST COMPANY, Defendant. |
W. Bradney Griffin, Rutland, for Bank.
Peter H. Banse, and Paul Kulig, Rutland, for debtor.
On October 12, 1982 the debtor filed for relief under chapter 11 of the Bankruptcy Code (Code).
The instant matter comes before the court on the debtor's three-pronged motion of August 9, 1983 for an injunction to restrain the First Vermont Bank and Trust Company (Bank), who is a creditor of the debtor, from violating the automatic stay of Code section 362(a); for a declaration that the Bank is in contempt of this court for violating the automatic stay; and for an award of costs and attorney's fees incurred in connection with the prosecution of the instant motion. The debtor alleges that the Bank, with full knowledge of the pendency of this proceeding in bankruptcy and of the existence of the automatic stay, and without obtaining relief from the stay, proceeded against assets of the debtor in Rutland Superior Court.
Hearings on the motion were held and continued from time to time. The final hearing was held on November 23, 1983, at which time the matter was taken under advisement in accordance with a stipulation by the instant parties that the court make its determination on the basis of the pleadings, exhibits and transcript of the state court action, entitled "First Vermont Bank & Trust Company vs. Matthew's Leasing Corporation, Stewart Tractor & Equipment Company, Inc., Vermont White Truck Center, Inc., John Matusiak and Patricia A. Matusiak, Docket No. S427-81Rc."
Vermont White Truck Center, Inc. (Vermont Truck) traded in trucks and tractors and also leased inventory equipment through Matthew's Leasing Corporation prior to management's liquidation of the corporation in 1981. Vermont Truck was wholly owned by Mr. John J. and Mrs. Patricia A. Matusiak (the Matusiaks) who were its sole officers. Mr. Matusiak was president and sole director of the corporation. During its corporate existence, Vermont Truck never held a corporate meeting and there are no minutes or other corporate records attesting to any formal meeting of corporate officers. Vermont Truck has never performed any act contrary to Mr. Matusiak's personal will.
Stewart Tractor & Equipment Company, Inc. (Stewart Tractor) was the predecessor corporation to Vermont Truck. Acquired by the Matusiaks in 1976, Stewart Tractor was, immediately following the acquisition and thereafter, wholly owned by the Matusiaks, who were its sole officers. Mr. Matusiak was president and sole director of the corporation during the period of ownership by the Matusiaks. During this period of ownership, the corporation never held any corporate meeting and there are no minutes or other corporate records attesting to any formal meeting of corporate officers. During this period of ownership, the corporation never performed any act contrary to the personal will of Mr. Matusiak.
Bray Enterprises, Inc. (Bray), the instant debtor-plaintiff, is a wholly owned subsidiary of Vermont Truck. Mr. Matusiak is president and sole director of Bray; Peter H. Banse, Esquire, attorney for the debtor in this proceeding in bankruptcy, is corporate secretary. The corporation was set up in 1981 to be the transferee of assets owned by the parent corporation Vermont Truck as transferor during the course of liquidation by management of Vermont Truck in 1981. Mr. Matusiak acceded to the presidency of Bray when its original president, Peter Bray, a personal friend of Mr. Matusiak, resigned in 1981. During its corporate existence, Bray has never held a corporate meeting and there are no minutes or other corporate records attesting to any formal meeting of corporate officers. Bray has never performed any act contrary to the personal will of Mr. Matusiak.
Matthew's Leasing Corporation is a Vermont entity whose president and principal is Mr. Matusiak. The company offices are located in Proctor, Vermont, being the premises at which Mr. Matusiak was served with a certain motion and a writ of attachment as set forth in the findings of fact.
Facts as follow are established by the pleadings, exhibits and transcript of the state court proceeding on the matter underlying the instant motion:
In 1979 Stewart Tractor acquired a used 1975 Thiokol Spryta tractor, model 1201, serial no. 1496 (snowgroomer), from Mt. Mansfield, Inc., for a trade-in price of $7,500. The snowgroomer became an asset of Vermont Truck when Stewart Tractor became Vermont Truck sometime prior to June 10, 1981.
On August 20, 1981 Vermont Truck listed the snowgroomer for sale through an equipment brokerage firm, Knapp Associates, Inc. (Knapp).
On February 3, 1982 in an action brought in Rutland Superior Court, by the Bank, against Matthew's Leasing Company, et al., John Matusiak, as President of Matthew's Leasing Company, was served with a motion for a writ of attachment upon which a hearing was set by the court to be held February 4, 1982, at 1:30 p.m., for the purpose of showing cause why a writ of attachment against the snowgroomer should not be granted to the Bank.
On February 4, 1982, at 10:00 a.m., before any writ of attachment was issued, Vermont Truck transferred the snowgroomer to Bray in exchange for the promise of Bray to pay certain debts of Vermont Truck upon the occurrence of a resale of the snowgroomer, by Bray, to a third party. For the purpose of securing a third party buyer, Bray had Knapp continue to list the snowgroomer for sale.
On April 19, 1982, Ski Valley Club, Inc. of Naples, New York, (Ski Valley) made a contract with Bray to buy the snowgroomer for a purchase price of $13,750. On July 15, 1982, Bray executed and delivered a bill of sale to Ski Valley, and Ski Valley paid the purchase price to Knapp as escrow agent under instructions to release the net proceeds of sale to Bray after the payment of certain expenses incurred in the sale and upon the occurrence of certain further conditions. The escrow account balance after expenses was $12,446.
Mr. Matusiak is a guarantor of certain notes in default signed by Matthew's Leasing Corporation and Vermont Truck, and held by the Bank.
Throughout mid-1982 and continuing through October 1982, the Bank prosecuted its state court action against Matthew's Leasing Corporation, et al. On November 2, 1982, the state court declared the transfer of the snowgroomer to Bray by Vermont Truck null and void as a fraudulent transfer under Vermont Statutes, Title 9, section 2281.
To continue reading
Request your trial