HomeMy WebLinkAbout05/08/1985Special Council Meeting
City Hall Council Chambers
May 8, 1985 - 9:15 a.m.
Mayor Del Bowers in the Chair. Roll call: Getty, Lichty, Penaluna,
Klinger, Dowie, Wright, Seeber.
87372 - Moved by Seeber, seconded by Lichty
Receive and place on file the call.
Motion carried.
87373 The Mayor announced that the purpose of the meeting was to discuss
the request of the Rath Reorganization Committee for the City's help
in appealing the sale of the company's trademark to John Morrell and
Company for 3 million dollars last week following a federal
bankruptcy court order.
LaVern Petri, a representative of the Reorganization Committee,
indicated that the Committee was considering the appeal of the
Judge's decision. He wanted to know the City's position in joining
in on this appeal.
Mayor Bowers indicated that the trademark has been sold and to his
knowledge the sale was final.
W. David Tyler, City Attorney, indicated that to his knowledge the
trademark sale was final and that the chance of winning an appeal was
very slim.
Councilperson Seeber suggested that the Council may wish to join the
action of the ERC to file an appeal to allow time for the Committee
to put together an interim financing package. In response,
Councilperson Penaluna indicated that the value of the trademark
would not be increasing and probably would not be worth the 3 million
dollar value that has been placed on it.
W. David Tyler indicated that should the City appeal the Judge's
decision, a bond would need to be filed with the Court as a part of
the appeal process and could be in excess of 3 million dollars.
Councilperson Dowie asked how any financing plan, in particular the
one suggested by the Reorganization Committee, could be feasible when
the parties would be paying 6% over the prime lending rate.
W. David Tyler indicated that the sale of the plant and equipment
would be done under the direction of the bankruptcy judge. To his
knowledge the court will sell the items and pay the City as the first
lien holder.
Councilperson Seeber indicated that he had been told that the City
had been paying for Administrative salaries of those still employed
at Rath Packing Company and wanted to know if there was truth to this
rumor. Mayor Bowers indicated that under no circumstance was the
City paying for Administrative salaries and that he or anyone else
was welcome to review the bills that the City has paid since March
14, 1985.
Councilperson Seeber also asked that Bill Smith, the Attorney for the
City of Waterloo in this particular case, be present at future
meetings regarding the Rath Packing Company.
LaVern Petri extended to the Council and the City the Committee's
gratitude for the support that the City has shown throughout the Rath
bankruptcy proceedings.
Moved by Dowie, seconded by Getty
that the Council be adjourned.
Motion carried.
Larry P. Burger
City Clerk/Auditor