WIEBOLDT STORES, INC. v. SCHOTTENSTEIN

No. 87 C 8111.

111 B.R. 162 (1990)

WIEBOLDT STORES, INC., By and Through its Trustee in Bankruptcy, Thomas F. RALEIGH, Plaintiff, v. Jerome M. SCHOTTENSTEIN, et al., Defendants.

United States District Court, N.D. Illinois, E.D.

February 23, 1990.


Attorney(s) appearing for the Case

Sarah R. Wolff, M. Marshall Seeder, Sachnoff & Weaver, Ltd., Chicago, Ill., for Wieboldt Stores.

Jeffrey Rudman, James D. St. Clair, Albert H. Notini, Hale & Dorr, Boston, Mass. and Barry Pitler, Sigi Offenbach, Pitler & Mandell, Chicago, Ill., for Jerome Schottenstein, Schottenstein Stores Corp., Geraldine Schottenstein, Jay L. Schottenstein, Susan Schottenstein, Ann Schottenstein, Saul Schottenstein, Ari Deshe, Jon Diamond, Irving Harris, George Kolber and Thomas Ketteler.

David Bodiker, Bodiker & Holland, Columbus, Ohio, for Charles H. Schottenstein, Gary Schottenstein, Randee Schottenstein, Robert M. Schottenstein and Estate of Alvin Schottenstein.

Joel Wolosky, Daniel H. Mintz, Parker Chapin Flattau & Klimpl, New York City and John G. Jacobs, Jonah Orlofsky, Robert Plotkin, Jeffrey Grant Brown, Plotkin & Jacobs, Ltd., Chicago, Ill., for MBT Corp., Julius Trump, Edmond Trump, James M. Jacobson, Albert Roth and William W. Darrow.

Kenneth R. Gaines, Dennis P. Birke, Altheimer & Gray, Chicago, Ill., for William Darrow.

James E. O'Halloran, Clifford G. Kosoff, John F. Hennessy, Jr., O'Halloran Kosoff & Miller, Northbrook, Ill., for Estate of David C. Keller and Robert A. Podesta.

Marc C. Smith, Arvey, Hodes, Costello & Burman, Chicago, Ill., for Gen. Elec. Credit Corp.

Sheri Bluebond, Arnold Quittner, Gendel, Raskoff, Shapiro & Quittner, Los Angeles, Cal., Neil K. Quinn, Mary Anne Capron, Mr. Joseph B. Lederleitner, Pretzel & Stouffer, Chtd., Chicago, Ill., for Porter Wright Morris & Arthur.

Gary M. Elden, John R. McCambridge, George R. Dougherty, Grippo & Elden, Chicago, Ill., for O. Kirby Colson III and Isham, Lincoln & Beale.

Joel J. Africk, Vilia M. Dedinas, Rodney D. Joslin, Jenner & Block, Chicago, Ill., for Laventhol & Horwath.

Paul H. Aloe, Gerald Harris, Rubin Baum Levin, Constant & Friedman, New York City and Stephen L. Agin, Roger L. Longtin, Keck, Mahin & Cate, Chicago, Ill., for Weston Associates and Saugatuck Investments Ltd.

Malcolm Brooks, Elias N. Matsakis, Robert J. Block, Thomas G. Gardiner, McBride, Baker & Coles, Chicago, Ill., for One North State Street Ltd. Partnership, State Street Venture, Boulevard Bank Nat. Ass'n, as Trustee, BA Mortg. And Intern. Realty Corp., and Bennett & Kahnweiler, Assoc.

Marc Dreier, Fulbright, Jaworski, & Reavis McGrath, New York City and David S. Foster, Alan J. Wertjes, Latham & Watkins, Chicago, Ill., for Leonard Shaykin.

Theodore Gewertz, Douglas K. Mayer, Wachtell, Lipton, Rosen & Katz, New York City and Marvin A. Tenenbaum, John R. McLain, J. Samuel Tenenbaum, Becker & Tenenbaum, Chicago, Ill., for AMA/WSI, Inc., Alan Cohen, Lewis Krueger and Anthony Grillo.

Julian Jawitz, Glen Cove, N.Y., pro se.

Robert F. Klimek, Robert L. Richiardi, Klimek & Richiardi, Ltd., Arlington Heights, Ill., for Morton Huff and David Babcock.

Robert J. Kriss, Carrie Huff, Mayer, Brown & Platt, Chicago, Ill., for Household Commercial Financial Services, Inc.

Philip V. Martino, Theodore A. Shapero, Mark A. Berkoff, Rudnick & Wolfe, Chicago, Ill., for Polk Bros. Inc. and Polk Bros. Found.

Lawrence R. Samuels, Jacquelyn F. Kidder, Patricia K. Smoots, Ross & Hardies, Chicago, Ill., for George P. Kelly.

Peter G. Swan, David A. Kaufman, Emalfarb, Swan & Bain, Highland Park, Ill., for Gilbert K. Granet, Gilbert K. Granet, Inc., WSI Liquidation Trust, WSI Investors, Inc., and Christopher Jansen.


MEMORANDUM OPINION AND ORDER

HOLDERMAN, District Judge:

On December 20, 1985 WSI Acquisition Corporation ("WSI"1) acquired Wieboldt Stores, Inc. ("Wieboldt") in a so-called leveraged buyout ("LBO"). On September 24, 1986 Wieboldt filed for relief under Chapter 11 of the Bankruptcy Code. A year later Wieboldt's Chapter 11 trustee ("Trustee") filed this action against various defendants involved in the Wieboldt LBO alleging,

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