Loading...
HomeMy WebLinkAboutAgenda Report - April 13, 1999 B-01 SMCITY OF LODI COUNCIL COMMU1vICATION AGENDA TITLE: Accept Request from Landucci, Inc. (d/b/a Landucci's Market Place) to Compromise a Debt MEETING DATE: April 13, 1999 PREPARED BY: Finance Director RECOMMENDED ACTION: That the City Council accept a request from Landucci, Inc. to compromise a debt, and that the City Council direct staff to advise Counsel for Landucci, Inc. of that decision on or before April 15, 1999. BACKGROUND INFORMATION: Landucci, Inc. presently owes the City of Lodi $33,819.18 for electricity, $144.77 for sewage, $264.77 for refuse and $428.98 for water for a total of $34,657.70. Landucci, Inc. has ceased operation. Through their Counsel, Landucci, Inc. has offered to pay the City of Lodi slightly in excess of one-third of their debt to the City. If all creditors of Landucci, Inc. do not accept this settlement proposal, Landucci, Inc. will be filing a Chapter 7 Petition in Bankruptcy. A filing in Chapter 7 would result in a liquidation of the Debtor's assets with payments made to Creditors from the liquidation proceeds. We do not have a complete understanding of the debts nor the assets of the Debtor. Therefore, we do not know if the City would secure more or less through a Chapter 7 filing. FUNDING: None required. Prepared by Sandra Smith, Support Services Supervisor :ss Attachments +.I. Vicky McAthie Finance Director APPROVED: H. Dixon Flynn — City Manager MEMORANDUM FROM THE O F F I C E O F T H E C I T Y DATE: April 6, 1999 TO: Dixon Flynn, City Manager FROM: Randy Hays, City Attorney A T T O R N E Y RE: Letter of March 31, 1999 Regarding Landucci's, Inc. You forwarded to this office the letter, which is attached to this memorandum. I am not sure what response you wanted or anticipated from this office relative to the letter. However, based upon my review of the letter there are two areas which I will comment on. The first area of comment has to do with the authority to compromise a debt, which basically is the request of the letter. It would appear that based upon the size of the debt, acceptance or rejection of the offer of compromise would be in the province of the City Council. The letter indicates that the total debt owed to the City of Lodi is $34,657.70. The offer to compromise is one that basically offers to pay us slightly in excess of one-third of that amount. My second area of comment relates to the last part of the letter that indicates that if all creditors do not accept the settlement proposal, that Landucci's, Inc., will be filing a Chapter 7 Petition in Bankruptcy. Of course at this point in time there is no way for us to know if all creditors will accept the settlement proposal. Assuming that they do not, a filing in Chapter 7 would result in a liquidation of the Debtor's assets with payments made to creditors from the liquidation proceeds. Subsequent to that point in time, the Debtor would be discharged and would owe nothing further. We do not at this time have a complete understanding of the debts nor the assets of the Debtor. It would be impossible to evaluate whether or not the City would secure more or less through a Chapter 7 filing. If it is your business decision to accept the proposal, I would recommend that we advise Counsel for Landucci's of that business decision. I would additionally suggest that they be advised that the matter would be submitted to the City Council for their ratification at its regular meeting of Wednesday, April 21, 1999. cc: I' Vicky McAthie %I LODI NTS40ENT0011DEPART ME NTSXADM I NIS T RAT I ONICAICI TYICORRESIAD MIN\L AND UCC I'S. DOC OSCAR BUDD KLEINFELD JEFFREY D. HEISER March 31, 1999 City of Lodi Post Office Box 3006 Lodi, CA 95241-1910 LAW OFFICES OF rw 1�0'4'f V23 KLEINFELD S HEISER, INC.�'�iar�a A PROFESSIONAL CORPORATION l.7QI9r`s office 949 NORTH CENTER STREET AREA CODE 209 SUITE A TELEPHONE 948-6400 FAX 948-6022 STOCKTON, CALIFORNIA 95202 n ! 1399 Re: Landucci, Inc., a California Corporation, d/b/a Landuccils Market Place, a/k/a Landuccils 1320 Lockeford, Lodi, California Ladies and Gentlemen: This office represents the above-named company whose records indicate that there is presently owed to you the sum of $34,228.72 for electricity and the sum of $428.98 for water, for a total amount due of $34,657.70. Due to financial circumstances beyond its control, Landucci, Inc. has ceased operation. There is presently owed by said company a total of $505,682.84 to its creditors. This sum does not include the $1,204,532.53 owed to Certified Grocers of California, Ltd., and/or its subsidiary, Grocers Equipment Company, which sum is secured by a Financing Statement (UCC -1) collateralized by the equipment purchased from Certified Grocers. Presently, Landucci's has approximately $164,823.00 in cash and some remaining merchandise. On March 22, 1999 Northern California Collection Services representing four creditors attached Landuccils bank account and the bank is holding, pursuant to the writ of attachment, approximately $28,000.00. If permitted to succeed, the attachment would reduce the debt owed to the creditors to $477,083.00. My client proposes the following offer to the creditors. In full settlement of all indebtedness it will pay to each of the creditors $.35 on every dollar owed along with an additional pro - rata distribution from the sale of the remaining merchandise. LAW OFFICES OF KLEINFELD & HEISER, INC. A PROFESSIONAL CORPORATION City of Lodi March 31, 1999 Page two Re: Landucci, Inc., a California Corporation, d/b/a Landuccils Market Place, a/k/a Landucci's 1320 Lockeford. Lodi California we must receive your acceptance or rejection of this offer on or before April 15, 1999. If the offer is not accepted by all of the creditors by that date then my client will file a Chapter 7 Petition in Bankruptcy, thereby nullifying the attachment and returning the attached funds to the bankrupt estate. Your immediate response would be appreciated. Yours very truly, KLEINFELD & HEISER, INC. A Professional Law Corporation ()SCAR BUDD KLE-INFEL D Oscar Budd Kleinfeld Attorney for the Debtor OBK:krh CITY COUNCIL KEITH LAND, Mayor CITY O F L O D I STEPHEN J. MANN Mayor Pro Tempore CITY HALL, 221 WEST PINE STREET SUSAN HITCHCOCK P.O. BOX 3006 ALAN S. NAKANISHI LODI, CALIFORNIA 95241-1910 PHILLIP A. PENNING (209) 333-6702 FAX (209) 333-6807 April 13, 1999 Oscar Budd Kleinfeld, Attorney Law office of Weinfeld & Heiser, Inc. 949 North Center Street, Suite A Stockton, CA 95202 RE: Landucci, Inc., a California Corporation, d/b/a Landucci's Market Place, a/k/a Landucci's 1320 Lockeford. Lodi, California H. DIXON FLYNN City Manager ALICE M. REIMCHE City Clerk RANDALL A. HAYS City Attorney The Lodi City Council, in a Special Meeting of April 13, 1999, considered the request of your firm on behalf of Landucci, Inc. regarding full settlement of all indebtedness to the City of Lodi. As stated in your letter, the debt is presently the sum of $34,228.72 for electricity and the sum of $428.98 for water, for a total amount due of $34,657.70. Following discussion, the City Council of the City of Lodi approved acceptance of your proposed offer for full settlement of all indebtedness to pay $.35 on every dollar owed along with an additional pro -rata distribution from the sale of the remaining merchandise. This letter shall serve as the City of Lodi's acceptance of your offer. If you have any questions or require further information regarding this matter, please do not hesitate to contact our office at (209) 333-6702. Sincerely, Alice M. Reimche City Clerk AMR/]LT cc: City Manager Flynn Finance Director McAthie amr\landucci.doc LAW OFFICES OF � � of l qq KLEINFELD 8. HEISER, INC. trtyMan2(hIQr7G/ A PROFESSIONAL CORPORATION S ��/�`je OSCAR BUDD NLEINFELD 949 NORTH CENTER STREET AREA CODE 209 JEFFREY D. HEISER SUITE A TELEPHONE 948-6400 FAX 948-6022 STOCKTON. CALIFORNIA 95202 11999 March 31, 1999 City of Lodi Post Office Box 3006 Lodi, CA 95241-1910 Re: Landucci, Inc., a California Corporation, d/b/a Landucci's Market Place, a/k/a Landucci's 119.0 Lockeford. Lodi. California Ladies and Gentlemen: This office represents the above-named company whose records indicate that there is presently owed to you the sum of $34,228.72 for electricity and the sum of $428.98 for water, for a total amount due of $34,657.70. Due to financial circumstances beyond its control, Landucci, Inc. has ceased operation. There is presently owed by said company a total of $505,682.84 to its creditors. This sum does not include the $1,204,532.53 owed to Certified Grocers of California, Ltd., and/or its subsidiary, Grocers Equipment Company, which sum is secured by a Financing Statement (UCC -1) collateralized by the equipment purchased from Certified Grocers. Presently, Landucci's has approximately $1G4,823.00 in cash and some remaining merchandise. On March 22, 1999 Northern California Collection Services representing four creditors attached Landucci's bank account and the bank is holding, pursuant to the writ of attachment, approximately $28,000.00. If permitted to succeed, the attachment would reduce the debt owed to the creditors to $477,083.00. My client proposes the following offer to the creditors. In full settlement of all indebtedness it will pay to each of the creditors $.35 on every dollar owed along with an additional pro= rata distribution from the sale of the remaining merchandise. LAW OFFICES OF KLEINFELD & HEISER, INC. A PROFESSIONAL CORPORATION J City of Lodi March 31, 1999 Page two Re: Landucci, Inc., a California Corporation, d/b/a Landucci's Market Place, a/k/a Landuccils 1320 Locknforrl Lodi.California We must receive your acceptance or rejection of this offer on or before April 15, 1999. If the offer is not accepted by all of the creditors by that date then my client will file a Chapter 7 Petition in Bankruptcy, thereby nullifying the attachment and returning the attached funds to the bankrupt estate. Your immediate response would be appreciated. Yours very truly, KLEINFELD & HEISER, INC. A Professional Law Corporation OSCAR BUDD KLEINFELD Oscar Budd Kleinfeld Attorney for the Debtor OBK:krh LAW OFFICES OF KLEINFELD & HEISER, INC. A PROFESSIONAL CORPORATION OSCAR BUDD KLEINFELD 949 NORTH CENTER STREET it a AREA CODE 209 JEFFREY D. HEISER SUITE A 'TEtLEPHONE 948-6400 STOCKTON, CALIFORNIA 95202 FAX 948-6022 April 27, 1999 Re: Landucci, Inc. d/b/a Landucci's Market Place, Landucci's and Donald Landucci, Individually 1320 W Lockeford Street, Lodi, CA 95240 Pursuant to your agreement with my above-named clients, I am enclosing a cashier's check as payment in full for the moneys owed to you. Your cooperation is sincerely appreciated. Yours very truly, KLEINFELD & HEISER, INC. A Professional Law Corporation Oscar Budd Kleinfeld Oscar Budd Kleinfeld Attorney for the above-named Payees OBK:krh Enclosure CITY COUNCIL KEITH LAND, Mayor CITY OF L O D I STEPHEN J. MANN Mayor Pro Tempore CITY HALL, 221 WEST PINE STREET SUSAN HITCHCOCK P.O. BOX 3006 ALAN S. NAKANISHI LODI, CALIFORNIA 95241-1910 PHILLIP A. PENNINO (209) 333-6702 FAX (209) 333-6807 April 13, 1999 Oscar Budd Weinfeld, Attorney Law office of Weinfeld & Heiser, Inc. 949 North Center Street, Suite A Stockton, CA 95202 RE: Landucci, Inc., a California Corporation, d/b/a Landucci's Market Place, a/k/a Landucci's 1320 Lockeford. Lodi. California H. DIXON FLYNN City Manager ALICE M. REIMCHE City Clerk RANDALL A. HAYS City Attorney ECC`E0VE APR 141999 The Lodi City Council, in a Special Meeting of April 13, 1999, considered the request of your firm on behalf of Landucci, Inc. regarding full settlement of all indebtedness to the City of Lodi. As stated in your letter, the debt is presently the sum of $34,228.72 for electricity and the sum of $428.98 for water, for a total amount due of $34,657.70. Following discussion, the City Council of the City of Lodi approved acceptance of your proposed offer for full settlement of all indebtedness to pay $.35 on every dollar owed along with an additional pro -rata distribution from the sale of the remaining merchandise. This letter shall serve as the City of Lodi's acceptance of your offer. If you have any questions or require further information regarding this matter, please do not hesitate to contact our office at (209) 333-6702. rn. „izll�iii cc; City Manager Flynn Finance Director McAthie amrllanducci.doc Sincerely, Alice M. Reimche City Clerk �X51.1 2j '. IMS INX I All NI' HAS ANA N'i' I[ICIAI AA'I'I RMARK IT IN I I IION 'I IILHM K; AH-SI'M L.OI I l LA' I I WENILL VA IICA'I I. AI'lll') -- Bank16-42200 1220 of Lodi 458 0953544 701 So01h Ham Lane Lotlt CA 95240 1211 DATEApril 26, 1_999 PAY O THE w ER OF ''"'' :; City of Lodi %; :: %; %: $ .',122130.20%; DOLLARS Landucci Marketplace OFFICIAL CHECK 1:12201.2205I:OQ45V 04 5 3 5 4 4 7110 OSCAR BUDD KLEINFELD JEFFREY D. HEISER May 11, 1999 City of Lodi Post Office Box 3006 Lodi, CA 95241-1910 LAW OFFICES OF KLEINFELD & NE1SEIR',_71.NC.. A PROFESSIONAL CORPORATION' 1 .. 949 NORTH CENTER $TRE�ET - •'It SUITE A _ STOCKTON, CALIFORNIA 95202 Attention: Alice M. Reimche, City Clerk Re: Landucci, Inc. Account No. 187.01-25.02 Dear Ms. Reimche: AREA CODE 209 TELEPHONE 948-6400 FAX 948-6022 My client received two "Second Notices", one for $22,248.66, and the other for $278.84. On April 13, 1999 the Lodi City Council, in a Special Meeting, approved acceptance of our proposed settlement offer of $12,130.20. At that time the balance was $$34,657.70 ($34,228.72 for electricity and $428.98 for water). On April 26, 1999 a cashier's check for $12,130.20 was mailed to the City of Lodi. According to the endorsement this paid in full the debt owed to the City. Your cooperation is appreciated; however, would you please advise your office to correct the records to reflect the settlement agreement. OBK:krh Enclosures cc: Donald Landucci Yours very truly, KLEINFELD & HEISER, INC. A Professional Law Corporation Oscar Budd Kleinfeld Attorney at Law CITY COUNCIL KEITH LAND, Mayor STEPHEN J. MANN Mayor Pro Tempore SUSAN HITCHCOCK ALAN S. NAKANISHI PHILLIP A. PENNING CITY OF LODI CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 Oscar Budd Kleinfeld, Attorney Law office of Kleinfeld & Heiser, Inc. 949 North Center Street, Suite A Stockton, CA 95202 (209)333-6702 FAX (209) 333-6807 April 13, 1999 RE: Landucci, Inc., a California Corporation, d/b/a Landucci's Market Place, a/k/a Landucci's 1320 Lockeford. Lodi, California H. DIXON FLYNN City Manager ALICE M. REIMCHE City Clerk RANDALL A. HAYS City Attorney FCIEPV9 APR 14 1999 The Lodi City Council, in a Special Meeting of April 13, 1999, considered the request of your firm on behalf of Landucci, Inc. regarding full settlement of all indebtedness to the City of Lodi. As stated in your letter, the debt is presently the sum of $34,228.72 for electricity and the sum of $428.98 for water, for a total amount due of $34,657.70. Following discussion, the City Council of the City of Lodi approved acceptance of your proposed offer for full settlement of all indebtedness to pay $.35 on every dollar owed along with an additional pro -rata distribution from the sale of the remaining merchandise. This letter shall serve as the City of Lodi's acceptance of your offer. If you have any questions or require further information regarding this matter, please do not hesitate to contact our office at (209) 333-6702. Sincerely, Alice M. Reimche City Clerk AMR/JLT cc: City Manager Flynn Finance Director McAthie amr\landucci.doc n,rs oxn:r.u� x�u,n •■nncu. w nniwnxa rxnntiuox ixe cacti �nenua rn�s �t�n�n wxi ixux-�n , uw� -s•+a2o Bank li i71p OfLO& 458 0953544 G �o PATa6pril 26, 1999 P ow o: * * * * :t City of Lodi $ *12,130.20* ax 09" DOLLARS landucci Marketplace OFFICIAL CHECK Pa ABBE P--sLe ED 9AeYf :OS ANGEUS. GA +:122042205+:00458 53561,?0 --A Ity of Lodi 212 West Pine Street P.O. Box 3006 *2ND NOTICE* Lodi, CA 95241 BILL FOR UTILITY SERVICE Telephone Inquiries 8:00 a.m. to 5:00 p.m. Monday thru Friday Customer Service - (209) 333-6719 ACCOUNT NUMBER: 187 01-25 02 CUSTOMER NAME: LANDUCCI MARKETPLACE ELECTRIC METER: 29588 +LANDUCCI, DON RATE SCHEDULE: G2 SERVICE ADDRESS: 1320 W LOCKEFOR ST -------------------------------------------------------------------------------------------------------- Total Amount Due ........ This is your 2nd notice to pay this bill. Please pay this bill before your credit is affected. A deposit will be required to re-establish service due to past credit history. Please tear at perforation and return lo—er portion nith your payment Account No-: *2ND NOTICE* Phmake check payabic t« $22,248.66 187.01-25.02 Please Pay This Amount P— Dna: $22,248.66 111110111 I�IIYAII BILL FOR UTILITY SERVICE of Lodi e�ephone Inquiries 8:00 a.m. to 5:00 p.m. i Monday thru Fridac 212 West Pine Street P.O. Box 3006 *2ND NOTICE* Customer Service - (209) 333-6719 Lodi. CA 95241 ACCOUNT NUMBER: 187.01-90.03 CUSTOMER NAME: LANDUCCI MARKETPLACE ELECTRIC METER: +LANDUCCI, DON RATE SCHEDULE: SERVICE ADDRESS: 1320 W LOCKEFOR ST -------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------- Total Amount Due ........ $278.84 ------------------------------------------------------------------------------------------------ This is your 2nd notice to pay this bill. Please pay this bill before your credit is affected. deposit will be required to re-establish service due to past credit history. Please tear at perforation and return lover portion with your pacment 2ND NOTICE* Please make check payable to: City of Lodi Account Nc.: 187.01-90.03 7 71 Please Pay This Amount $278.84 Part Dow szla.s4