In re DH Overmyer Telecasting Co., Inc.
| Decision Date | 11 July 1984 |
| Docket Number | No. C82-3175.,C82-3175. |
| Citation | 53 BR 963 |
| 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. District Court — Northern District of Ohio |
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James M. Wilsman, Kevin T. Duffy, Parks, Eisele, Bates & Wilsman, Cleveland, Ohio, for debtor.
Susan B. Collins, Kirk C. Loos, Baker & Hostetler, Cleveland, Ohio, John Silas Hopkins, III, William S. Eggeling, Ropes & Gray, Boston, Mass., for First Nat. Bank of Boston.
John J. Hunter, Toledo, Ohio, for plaintiff-appellant Hadar Leasing International Co.
George R. Royer, Toledo, Ohio, for plaintiff-appellant D.H. Overmeyer.
Richard D. Parsons, Patterson, Belknap, Webb & Tyler, New York City, Robert J. Sidman, Vorys, Sater, Seymour and Pease, Columbus, Ohio, for plaintiff-appellant D.H. Overmeyer.
Norman H. Jackman, Comras & Jackman, Boston, Mass., for plaintiff-appellant Wilkinson Storage Corp, et al.
The above-entitled action is currently before this court on an appeal from the United States Bankruptcy Court for the Northern District of Ohio, pursuant to 28 U.S.C. § 1334. The judgment being appealed was entered by the Honorable John F. Ray on September 24, 1982 in favor of D.H. Overmyer Telecasting Co., Inc. (hereinafter Telecasting), and The First National Bank of Boston (hereinafter F.N.B.B.). After reviewing the record, briefs of counsel and the applicable law, the court hereby enters its findings as follows:
I PROCEEDINGS IN BANKRUPTCY COURT
Telecasting is an Ohio Corporation which has been duly licensed to operate and manage the U.H.F. television station, WDHO-TV, Channel 24, in Toledo, Ohio. On August 24, 1976, Telecasting filed a voluntary petition for reorganization under Chapter XI of the Bankruptcy Code in the Southern District of New York. That petition was subsequently dismissed in September, 1980 on the grounds that Telecasting was solvent at the time the petition was filed. Thereafter, on February 6, 1981, Telecasting filed a new voluntary petition for reorganization under Chapter XI in the Bankruptcy Court for the Northern District of Ohio. Pursuant to this petition for reorganization, Telecasting has been operating as a debtor-in-possession of the assets of the television station. On March 25, 1981, the bankruptcy court ordered that control of the Telecasting stock would be transferred to F.N.B.B.
On August 25, 1981, Hadar Leasing International Company, Inc. (hereinafter Hadar) filed an adversary proceeding (hereinafter the Hadar Adversary Proceedings) against Telecasting in the Telecasting Chapter XI proceedings. Hadar is an Ohio corporation which operates from a suite of offices at 3 Park Avenue, New York, New York. Hadar was previously known as the D.H. Overmyer Trucking Company. Currently the status of Hadar is also that of a Chapter XI debtor in the United States Bankruptcy Court for the Northern District of Ohio.
Hadar's complaint in the adversary proceeding sought permission from the bankruptcy court to repossess Telecasting's broadcasting equipment, or alternatively, condition future use of this equipment by Telecasting on the making of rental payments to Hadar. Hadar had previously filed in the Telecasting Chapter XI proceedings a proof of claim for $895,481.80 representing alleged delinquent rental payments. In addition, in the Hadar Adversary Proceedings, Hadar was seeking an order directing Telecasting to either assume or reject a series of purported leases for the broadcasting equipment.
In the early stages of the adversary proceedings, on September 22, 1981, the bankruptcy court, after a September 15, 1981 hearing, issued a pre-trial order which established a schedule for discovery. This order set a trial date of November 30, 1981. Thereafter, on November 12, 1981, the bankruptcy court entered a second order extending discovery until January 15, 1982, and re-setting the trial date for February 22, 1982.
On September 30, 1981, Telecasting filed an answer and twelve counterclaims to the Hadar complaint. Telecasting claimed that it, and not Hadar, owned the leased equipment and property in its possession. In addition, Telecasting sought as damages all of the money which it alleged was wrongfully extracted from it by Hadar as payments under the alleged leases. At this time, Telecasting also added as a party-defendant on seven of its counterclaims Intermodal Systems Leasing, Inc. (hereinafter I.S.L.I.).
I.S.L.I. was a Delaware corporation which had become inoperative under the laws of Delaware on March 1, 1979. Prior to changing its name I.S.L.I. was known as D.H. Overmyer Leasing Co., Inc. I.S.L.I. had originally entered into the leases which are the subject of this adversary proceeding with Telecasting, but had subsequently assigned its interest in the leases to Hadar. In Telecasting's claims against I.S.L.I. it alleged that I.S.L.I. had also participated in a scheme to remove funds wrongfully from Telecasting under the lease agreements.
On September 15, 1981, the F.N.B.B. moved to intervene into the Hadar Adversary Proceedings as a party defendant. F.N.B.B. is a national banking association having its principal place of business in Boston, Massachusetts. The alleged grounds for intervention was that F.N.B.B. was an equity security holder of Telecasting. Thereafter, on September 29, 1981, the bankruptcy court granted F.N.B.B. permission to intervene into this action.
In its answer and counterclaim, F.N.B.B. incorporated by reference the pleadings already filed by Telecasting. In addition, F.N.B.B. filed a counterclaim in which it asserted that the leases between Hadar and Telecasting were part of a conspiracy to defraud F.N.B.B. Further, F.N.B.B. asserted that the lease agreements were in violation of certain loan agreements with the various Overmyer entities.
On November 24, 1981, Hadar filed its reply and a counterclaim to F.N.B.B.'s and Telecasting's counterclaim. A jury demand was included in these pleadings. That same date, motions for leave to intervene into the Hadar Adversary Proceedings were filed by Daniel H. Overmyer, D.H. Overmyer Co., Inc. (Ohio) (hereinafter D.H.O.), and Overmyer Distribution Services, Inc. (hereinafter O.D.S.). After the parties seeking intervention were first advised that the discovery schedule and trial date would not be continued, the motions to intervene were granted by the bankruptcy court on December 24, 1981. The intervening parties then filed pleadings against F.N.B.B. which were titled answers and counterclaims. Jury demands were also included in these pleadings. These pleadings were later stricken by the bankruptcy court because they were deemed to have been improperly filed as answers. Thereafter, on February 11, 1982, D.H.O., O.D.S. and I.S.L.I. filed complaints, while Daniel H. Overmyer filed his complaint seven days later.
D.H.O. is an Ohio corporation, which has been, since November 16, 1973, a debtor-in-possession in a Chapter 11 proceeding in the United States Bankruptcy Court for the Southern District of New York. D.H.O. was formed by Daniel H. Overmyer in 1947 as a sole proprietorship in Toledo, Ohio. This proprietorship was eventually incorporated by Mr. Overmyer in 1949 or 1950. At the present time D.H.O. leases warehouse space in several cities throughout the United States.
O.D.S. was a Delaware Corporation which became inoperative under Delaware law on March 1, 1975. O.D.S. was a marketing company which had subleased space from D.H.O.O.D.S. also operated the various warehouses for the period January 1, 1972 through November, 1973.
On January 15, 1982, Telecasting and F.N.B.B. filed motions to strike the jury demands raised by the various parties in their pleadings. On February 18, 1982, the bankruptcy court entered an order which granted the motions and denied the jury demand.
On February 22, 1982, a seven-week trial to the bankruptcy court was commenced. On March 23, 1982, Judge Ray granted F.N.B.B.'s motion to dismiss, pursuant to Rule 41(b) of the Federal Rules of Civil Procedure, the claims of the plaintiffs, D.H.O., I.S.L.I., O.D.S. and Daniel H. Overmyer.
At the commencement of the trial, counsel for Daniel H. Overmyer advised the bankruptcy court that Mr. Overmyer was ill, and requested a continuance of the trial date. The bankruptcy court then held an evidentiary hearing to determine if Mr. Overmyer's health would prevent him from participating in the trial proceedings. Thereafter, the bankruptcy court found that Mr. Overmyer's health was sufficiently good to enable him to participate in the trial, and the court denied the request for continuance.
On May 24, 1982, the trial proceedings concluded, and the bankruptcy court took the matter under advisement. Four days later, Daniel H. Overmyer filed a personal bankruptcy in the Southern District of New York under Chapter VII of the Bankruptcy Code. Thereafter, on July 22, 1982, Hadar, D.H.O., O.D.S., I.S.L.I. and Daniel H. Overmyer petitioned the United States Court of Appeals for the Sixth Circuit for a writ of mandamus, seeking an order from the appellate court preventing the trial court from rendering a decision. This petition was never granted and the bankruptcy court was permitted to proceed to its findings. In re Hadar Leasing International Co., No. 82-3467 (6th Cir., July 22, 1982).
On September 17, 1982 the bankruptcy court rendered its Findings of Fact and Conclusions of Law. Seven days later the trial court also entered a judgment in favor of Telecasting and F.N.B.B. on their respective counterclaims. Telecasting was awarded a judgment in excess of 3.4 million dollars, and F.N.B.B. was awarded a judgment of over 22.4 million dollars jointly and severally against Hadar, D.H.O., I.S.L.I. and Daniel H. Overmyer. See In re D.H. Overmyer Telecasting Co., Inc., 23 B.R. 823 (Bankr.N.D.Ohio 1982).
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