In re DH Overmyer Telecasting Co., Inc., Bankruptcy No. B81-00506

• Decision Date: 24 September 1982
• Docket Number: Bankruptcy No. B81-00506,Adv. No. B81-1005.
• Citation: In re DH Overmyer Telecasting Co., Inc., 23 BR 823 (Bankr. N.D. Ohio 1982)
• Parties: In re D.H. OVERMYER TELECASTING CO., INC., Debtor. HADAR LEASING INTERNATIONAL CO., INC., et al., Plaintiffs, v. D.H. OVERMYER TELECASTING CO., INC., et al., Defendants.
• Court: U.S. Bankruptcy Court — Northern District of Ohio

23 B.R. 823 (1982)

In re D.H. OVERMYER TELECASTING CO., INC., Debtor HADAR LEASING INTERNATIONAL CO., INC., et al., Plaintiffs, v. D.H. OVERMYER TELECASTING CO., INC., et al., Defendants.

Bankruptcy No. B81-00506, Adv. No. B81-1005.

United States Bankruptcy Court, N.D. Ohio, E.D.

September 17, 1982.

Judgment September 24, 1982.

COPYRIGHT MATERIAL OMITTED

John Silas Hopkins, III, and William S. Eggeling, Ropes & Gray, Boston, Mass., and Susan B. Collins, and Joseph Patchan, Baker & Hostetler, Cleveland, Ohio, and Martin J. Bienenstock, Weil, Gotshal & Manges, New York City, for The First Nat. Bank of Boston.

William T. Smith, Calfee, Halter & Griswold, and Harry W. Greenfield, Javitch, Eisen & Greenwald Co., L.P.A., Cleveland, Ohio, for Hadar Leasing Intern. Co., Inc.

James M. Wilsman, and Kevin T. Duffy, Parks, Eisele, Bates & Wilsman, Cleveland, Ohio, for D.H. Overmyer Telecasting Co., Inc.

Ronald A. Rispo, Weston, Hurd, Fallon, Paisley & Howley, Cleveland, Ohio, for Daniel H. Overmyer.

David O. Simon, Dettelbach & Sicherman, Cleveland, Ohio, for Creditors' Committee of D.H. Overmyer Telecasting Co., Inc.

MEMORANDUM OF OPINION.

JOHN F. RAY, Jr., Bankruptcy Judge.

This matter came on for hearing on the complaint of plaintiff, Hadar Leasing International Co., Inc. ("Hadar"), Chapter 11 debtor, against another Chapter 11 debtor, D.H. Overmyer Telecasting Co., Inc. ("Telecasting"), for relief from stay; the complaints of intervening plaintiffs, Daniel H. Overmyer ("Mr. Overmyer"), Intermodal Systems Leasing, Inc. ("ISLI"), Overmyer Distribution Services, Inc. ("ODS") and D.H. Overmyer Co., Inc. (Ohio) ("DHO"), against defendant/intervenor, The First National Bank of Boston ("FNBB");¹ Telecasting's counterclaim against all of the plaintiffs; FNBB's counterclaim against all of the plaintiffs; the evidence; briefs of counsel; and oral argument of counsel.

This case presents for resolution:

(i) the claim of Hadar against Telecasting to the property and equipment used by Telecasting in the operation of its television station;

(ii) the purported claims of Hadar and the Overmyer plaintiffs/intervenors, Mr. Overmyer, ISLI, ODS and DHO, against defendant, FNBB, allegedly arising out of certain loan relationships with the Overmyer companies.

(iii) Telecasting's counterclaims against all of the Overmyer plaintiffs (1) for a determination that it owns the "leased" property and equipment in its possession; and (2) for all of the money wrongfully extracted from Telecasting under the purported "leases;"

(iv) FNBB's counterclaims against the Overmyer plaintiffs based upon monies owed to it and fraudulently removed from FNBB's collateral; and

(v) FNBB's counterclaim for recovery of reasonable collection costs.

The Court makes the following findings of fact, conclusions of law and orders.

FINDINGS OF FACT

1. The Trial

1.1 Trial Witnesses. Trial commenced in this adversary proceeding on Monday, February 22, 1982, and concluded April 9, 1982. During this period, 6,373 pages of proceedings were transcribed. The following witnesses were called by the plaintiffs:

David A. Raible, executive vice-president of Hadar (Raible, 1 Tr. 94; see Finding No. 4.6, infra)

James Bond, appraiser at Frazier, Gross & Kadlec, appraised equipment he was able to locate at Telecasting for Hadar (Bond, 13 Tr. 1151, 1153)

Edmund M. Connery, attorney for the Overmyer organization (Connery, 20 Tr. 1881-84, 23 Tr. 2170; see Finding No. 4.4, infra)

Peter M. Lynch, former accountant for the Overmyer organization, created a new set of Hadar books (Lynch, 16 Tr. 1510-12; see Finding No. 4.7, infra)

The following witnesses' testimony was presented by plaintiffs through deposition testimony:

Scott Neely, former vice-president of FNBB (McArdle, 51 Tr. 5174)

William F. Thompson, executive vicepresident, FNBB (Pl. Ex. 134, p. 4)

Ralph B. Fifield, head of the National Division West, FNBB (Pl. Ex. 136, p. 10)

John H. Chequer, former commercial lending officer, FNBB (Pl. Ex. 137, p. 7)

J. Francis Fuge, deposit operations officer, FNBB (Pl. Ex. 138, p. 3)

Daniel H. Overmyer, intervening plaintiff in this adversary proceeding (see Finding No. 2.3, infra)

Ralph Todd, financial consultant to FNBB (Pl. Ex. 140A, p. 4)

Richard D. Hill, chairman and chief executive officer, FNBB (Pl. Ex. 141, p. 6)

James Howell Short, former Credit Department employee, FNBB (Pl. Ex. 142, p. 5)

The following witnesses were called by the defendants:

Eugene I. Winkelman, M.D., head of hepatology section, Department of Gastroenterology, Cleveland Clinic (Winkelman, 5 Tr. 406)

Howard L. Klein, accountant, audit supervisor, Ernst & Whinney (H. Klein, 28 Tr. 2676)

James R. Bowe, vice-president of engineering and operations, Telecasting (Bowe, 39 Tr. 3681)

Daniel E. Foley, partner, Ernst & Whinney, specialist in privately owned businesses, taxes and bankruptcies (Foley, 41 Tr. 3879-80)

Jerry B. Klein, of Jerry B. Klein, CPA, an accounting firm heavily concentrated in bankruptcy, insolvency and investigative accounting work (J. Klein, 42 Tr. 3985-86)

Karen Hall, employee of Telecasting, responsible for accounts payable and payroll (Hall, 46 Tr. 4417)

John McArdle, former assistant vice-president, FNBB, reviewed bank records on Overmyer loans and accounts and calculated amounts due on outstanding loans (McArdle, 50 Tr. 5052, 5057)

William T. Smith, attorney, representing Hadar, DHO, ODS, Mr. Overmyer (until February 3, 1982) and ISLI in this proceeding

William G. Pearlstein, former legal assistant at Ropes & Gray, involved in discovery at Weathervane Farms, office of the custodial receiver and office of the United States Attorney for the Southern District of New York (Pearlstein, 55 Tr. 5640-42)

Anne M. Jelson, document examiner (Jelson, 55 Tr. 5689)

Richard L. Levine, former director and counsel of the Executive Office for United States Trustees, Department of Justice, member of the Advisory Committee on Bankruptcy Rules of the Judicial Conference of the United States, chairman of the commercial department of Hill & Barlow, a Boston law firm (Levine, 56 Tr. 5709, 5712, 5718)

The following witnesses' testimony was presented by the defendants through deposition testimony:

Daniel H. Overmyer, intervening plaintiff in this adversary proceeding (see Finding No. 2.3, infra)

Ohio Citizens Trust Company, by Harry G. Hart, vice-president of the business development, commercial division (Hart, 43 Tr. 4112-13)

United States Trust Company, by L. Edward Hemphill, account officer (Hemphill, 43 Tr. 4122)

Chemical Bank, by Robert J. Keenoy, assistant branch manager (Keenoy, 43 Tr. 4131)

Republic National Bank, by Jan Kaplan, legal services coordinator (Republic Kaplan Dep., FNBB Ex. 229, p. 3)

Edwin Tornberg & Company, by Edwin J. Tornberg, president (Tornberg, 43 Tr. 4139)

Edmund M. Connery, attorney for the Overmyer organization (Connery, 20 Tr. 1881-84, 23 Tr. 2170, 44 Tr. 4154; see Finding No. 4.4, infra)

Emil Thomas Meissner, former business manager, vice-president and controller of Telecasting (Meissner, 44 Tr. 4187)

Michael J. Carrieri, accountant for the Overmyer organization, former head of cost accounting and controller for other companies (Carrieri, 45 Tr. 4271-85)

Stuart K. Strang, Mr. Overmyer\'s son-in-law, president of Hadar (Strang, 45 Tr. 4369, 4385; see Finding No. 4.3, infra)

Barbara O. Strang, director and officer of various Overmyer entities (B. Strang, 46 Tr. 4437-40; see Finding No. 4.2, infra)

Products Analysis & Structural Testing, by Lawrence F. Wilson, did work for Hadar at Channel 24 in Toledo (PAST Dep., FNBB Ex. 236, p. 6)

Charles E. Slates, of Slates Electric, Inc., licensed contractor, did work for Hadar at Channel 24 in Toledo (Slates, 46 Tr. 4499-4500)

Ernest E. Rety, former chief engineer, possibly former director of engineering at Telecasting (Rety, 46 Tr. 4512)

William J. Shock, vice-president and general manager of Telecasting (Shock, 46 Tr. 4520) Arthur M. Dorfner, former president and chief operating officer of Telecasting (Dorfner, 47 Tr. 4549)

Peter H. Starr, former president of RT Systems, former consultant to Overmyer entities (Starr, 47 Tr. 4574-75)

Citicom Radio Corporation, by Wake L. Warthen, treasurer (Warthen, 47 Tr. 4585)

William S. Chi, accountant for the Overmyer organization, former assistant secretary and assistant treasurer of Telecasting (see Finding No. 4.5, infra)

Hundred East Credit Corporation, by J. Walter Corcoran, president (Corcoran, 48 Tr. 4699)

Hundred East Credit Corporation, by Eugene F. Shaw, director of marketing (Shaw, 48 Tr. 4731)

Weathervane Farms, Inc., by Stuart K. Strang, president (see Finding No. 4.3, infra)

Russell Morton Brown, attorney (Brown, 48 Tr. 4754-55)

Deauville, NDS and NDS of California, by Andrew C. Edgerton, employee of DHO (Edgerton, 48 Tr. 4786)

Bank of N.T. Butterfield & Son Limited and Bank of Butterfield Executor & Trustee Limited, by Kenneth Wallace Morgan, assistant manager (Morgan, 48 Tr. 4799)

Schiff Terhune, Inc., by Lawrence P. McGartland, senior vice-president and director of the property department (McGartland, 48 Tr. 4808)

Shirley C. Overmyer, wife of Daniel H. Overmyer (S. Overmyer, 49 Tr. 4859; see Finding No. 4.1, infra)

David A. Raible, executive vice-president of Hadar (Raible, 1 Tr. 94; see Finding No. 4.6, infra)

The plaintiffs called the following rebuttal witnesses:

Eric A. Hanson, accountant with James D. Miller & Co., reviewed records of Mr. Overmyer\'s accounts with FNBB (Hanson, 59 Tr. 5961-62)

Frank J. Lake, former banker (commercial lending officer), former treasurer of DHO (Lake, 59 Tr. 6020-23)

Jim T. Nichols, former employee of TOC, member of the committee for cash management decisions for TOC (Nichols, 60 Tr. 6073)

Daniel F. Nosal, real estate appraiser with Appraisal Consultants, Inc. (Nosal, 60 Tr. 6109-10)

Edgar W. Lee, vice-president of KLC, Inc. (leasing corporation) (Lee, 61 Tr. 6170)

2. The Parties

2.1. Plaintiff, Hadar Leasing International Company, Inc. ...