Committee of Unsecured Trainor
Creditors is Settling Payment Claims
The committee of unsecured creditors appointed in the bankruptcy case of Trainor Glass has begun to settle a few of its preferential payment claims to obtain funds paid to a number of industry companies and others in the 90 days before Trainor filed for Chapter 11 last March.
Among these, the committee has reached a settlement with Dorma Glass Inc. by which Dorma will return $8,500 to the Trainor estate, according to court documents; the committee had alleged that the company owed it $18,705.37.
Mapes Industry Inc. has agreed to a settlement of $15,026.40, according to court documents; the committee had originally made a claim against the company of $16,736.
Technical Glass Products has agreed to a settlement agreement by which it will return $10,000 to the estate, compared with the $63,209.39 claim made against it by the committee.
Under the terms of the settlement agreements, “the Committee shall be deemed to have released, waived and discharged the transferee[s] from any and all liabilities, obligations, actions, suits, judgments, claims, causes of action and demands, known or unknown, whatsoever at law or in equity arising from, in connection with or related to the avoidance claims respecting the transfers and the complaint.”
“The transferee[s] shall further be deemed to have released, waived and discharged any right of indemnification or recoupment against any third party for the settlement sum or any releases related to this settlement agreement,” write attorneys for the committee in the settlement agreements.
The committee had alleged that during the 90-day period preceding the petition date, between December 10, 2011, and March 9, 2012, Trainor had “continued to operate its business affairs, including the transfer of property, either by checks, cashier checks, wire transfers, direct deposit, or otherwise to certain entities …”
The companies against whom the preferential payment claims were filed were considered debtors to Trainor during this time period and “each preferential transfer constituted a transfer of interest of the debtor in property,” according to court documents.
“Each preferential transfer was made to or for the benefit of the defendant, within the meaning of § 547(b)(1) of the Bankruptcy Code, because each preferential transfer either reduced or fully satisfied a debt then owed by the debtor to the defendant,” wrote the committee in its numerous preferential payment complaints, filed in April. “Each preferential transfer was made for or on account of an antecedent debt owed by the debtor to the defendant before such transfer was made. The debtor was insolvent throughout the preference period because the sum of its representative debts was greater than the fair value of its respective assets.”
Further, the committee alleged that “each preferential transfer enabled the defendant to receive more than the defendant would have if the [Trainor’s] case was brought under chapter 7 of the Bankruptcy Code; the preferential transfers had not been made; and the defendant had received payment of such debt to the extent provided by the Bankruptcy Code.”
A number of the preferential payment complaint claims remained outstanding as of press time. More than 30 of these were filed against industry-related companies.
In other news with Trainor, the U.S. Bankruptcy Court for the Northern District of Illinois approved the sale of its impact glazing systems assets to Miramar, Fla.-based Aldora Holdings LLC for $10,000.
The impact glazing system assets include 12 sets of engineering drawings for wall systems designed to withstand the impact of objects blown by hurricane winds, according to court documents. The drawings had been submitted to the Miami-Dade County Product Control Division, which approved the products in the drawings “as having been designed to comply with the Florida Building Code, including the High Velocity Hurricane Code.”
The sale of the drawings included Trainor’s “title and interest in the engineering drawings, the test reports relating to the drawings, the notices of acceptance from Miami-Dade, and the right to use the extrusion dies for the products.”
The assets were sold “as is, where is, without any representations or warranties.” Trainor had marketed the assets to 11 prospective buyers and Aldora had the highest bid.
IPAT Amends Complaint Against CBO and “Alter Egos”
The International Painters and Allied Trades Industry Pension Fund (IPAT) filed an amended complaint against Alden, N.Y.-based CBO Glass, along with Seneca CBO Glass LLC and South Buffalo Glazing LLC, which the complaint references as CBO’s “alter egos.” The suit, which alleges that the company “failed to pay amounts due under the Labor Contracts, Trust Agreements and Plan,” was originally filed in March 2012.
The amended complaint describes CBO Glass and South Buffalo LLC as “alter egos or a single employer.” “Thus, South Buffalo is liable to the funds for CBO Glass’ obligations,” writes counsel for IPAT. Likewise, the complaint describes Seneca Glass as “an alter ego/successor of CBO Glass and/or South Buffalo” and alleges it also is liable for the obligations of all three companies.
The complaint alleges that all three companies have substantially identical officers and management, are all operated at the same address, share employees and equipment, have the same or similar type of customers, and that Seneca and South Buffalo have had “full awareness and knowledge of CBO Glass’ unpaid obligations to the fund.”
“Seneca Glass does business with the Fund that is sufficient to create personal jurisdiction over Seneca Glass in this district and a substantial part of the events or omissions giving rise to the claim occurred from transactions with the Funds’ offices in this district,” reads the complaint.
The complaint alleges that CBO “was party to or agreed to abide by the terms and conditions of collective bargaining agreements … with one or more local labor unions or district councils affiliated with IPAT, AFL-CIO [and/] CLC.”
In addition, the company is alleged to have agreed to abide by the terms of “the agreement and declaration of trust of the fund, made between certain employers and employee representatives in an industry affecting interstate commerce to promote stable and peaceful labor relations, and the plan documents for the ERISA funds.”
IPAT alleges that the company agreed to make full and timely payments to the Funds and to file monthly remittance reports with the Funds, detailing all employees or work for which contributions were required under the labor contract.
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