CHAPTER 28: HAPPY NEW YEAR, l983: THE RACE FOR CONFIRMATION

Pro Arts was plagued with many loose ends that needed to be tied down before a confirmation plan could be confirmed.

Mihalik's suit against the company as well as Treffinger's suit against the company had to be resolved. While they did not have anything worthwhile in their cause of action, the fact that Pro Arts was a defendant in both suits had to be addressed.

Dietrich had told John and me that any lawsuit pending anywhere outside the jurisdiction of the bankruptcy court could be brought into the bankruptcy court and tried as to the merits of the case.

While John and I had stressed our reluctance to settle anything with the Mihalik group or the Treffinger group, John and I entertained the thought if the settlement would include Mike, John and me personally.

This would insure the success of Pro Arts and would cut the litigation costs to zero. These cases had financially drained the company and indirectly drained Mike, John and me financially and emotionally.

While Dietrich, Bedell, Stewart, Angona, Stevenson and Best knew our feelings and our demands prior to electing Bedell and Angona to the Board of Directors, Best began negotiating settlements with Cantwell and Page without John or me having knowledge of this.

Best, Roetzel & Andress' third attorney in the reorganization, was an egotistical obnoxious man. He once threatened John on the telephone stating that he was going to come over to Medina and straighten John out. When John confronted Best on the telephone asking what Best had meant, Best caught himself and realized that his aggressive act might make him liable to John.

Best liked to project his macho image. He was a bully using his law license to intimidate John and me. I did not like him and would never have hired him or his firm if I had met him in the beginning instead of Dietrich.

Not only were the two lawsuits a problem, but also Pro Arts owed Medina County nearly $80,000 in taxes and could not pay this money at time of confirmation. This fact was obvious since Dietrich had disclosed at the hearings the fact that Pro Arts was having cash flow problems in spite of Bedell's loans to the company.

Old Phoenix required both the equipment loan and the JMT building loan to be current at the time the plan would be confirmed.

All the creditors of Pro Arts had to be given some assurance that a portion of their claims would be paid or they would vote against the plan.

Mike, John and had to have assurances that the deals Bedell had proposed were going to be honored and both John and I wanted our employment agreements confirmed.

Bedell had to have money for the accountants, attorneys and leaseholders that rented Pro Arts equipment.

And to top it all off, Bedell had to show that the reorganization would be a feasible plan and not likely to be back in Chapter 11 once the plan was approved and Pro Arts was no longer in Chapter 11.


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