executed Addendum to the Assignment, Assignee approved, assumed and agreed to be bound by the terms and conditions of the Innisbrook Agreement as well as the Newco Purchase Offer, with the latter being made "subject to [Assignee's] duties under law to solicit higher and better offers."
13. Assignee then notified Old Rovanco's creditors of the Assignment by letter dated November 23, 1994. In addition to notifying the creditors in general terms that "certain members of the ROVANCO management team have expressed an interest in purchasing the assets," the letter said that "all interested purchasers will be invited to submit an offer" to Assignee at a public sale to be held two weeks later. Then the letter requested that each creditor execute and return to the Assignee within six months an Affidavit of Claim and Consent to Assignment Form, indicating the amount of the creditor's claim against Old Rovanco. Next Assignee scheduled a public sale of the Assets to be held on December 6, 1994 and published notices of the public sale in the Chicago Tribune on November 27 and December 4, 1994.
14. Consolidated is an Alabama corporation with its principal place of business in Birmingham, Alabama. It manufactures and sells various types and configurations of pipe and pipe products. From approximately June 1, 1992 through September 30, 1994 Consolidated had sold and delivered pipe and coating to Old Rovanco on account, regularly sending invoices covering the unpaid amounts. Because of the large aggregate unpaid balance of those invoices, on November 8, 1994 Consolidated filed a complaint against Old Rovanco for breach of contract. Old Rovanco did not file an answer, and on November 29 Consolidated filed a motion for default judgment against Old Rovanco. On December 5 this Court entered a default judgment against Old Rovanco in the amount of $ 110,112,88 plus court costs.
15. In the meantime counsel for Consolidated and two other creditors of Old Rovanco had requested that Assignee delay the public sale to permit them to conduct an investigation and assessment of the situation and to determine whether they wished to pursue filing an involuntary bankruptcy petition against Old Rovanco. In accordance with their request, Assignee continued the public sale to December 12, 1994, publishing notice of the date of the continued sale in the Chicago Tribune on December 11.
16. On or about December 9, 1994 Assignee was advised by counsel for the three creditors that they had decided not to proceed with filing an involuntary bankruptcy petition against Old Rovanco. On December 12 Assignee's sale of the Assets was conducted and concluded. There were no bidders present at the sale other than Stonitsch on behalf of Newco, which reaffirmed its bid to purchase the Assets on the terms and subject to the conditions contained in the Newco Purchase Offer. No other bids were received at the public auction sale, and Assignee accepted the Newco Purchase Offer with certain waivers of various contingencies by Newco.
17. Between the November 21 date of the Assignment and the January 11, 1995 closing of the transaction with Newco (the "Closing"), Assignee continued to operate Old Rovanco's business with the use of the Assets but at about half of the business' normal level. Eber was at Old Rovanco's place of business as Assignee's agent on a daily basis during the period between the date of the Assignment and the Closing, and during that period he had control over all aspects of the company. Then at the Closing Assignee delivered to New Rovanco (the entity previously known as "Newco") Assignee's Bill of Sale transferring to New Rovanco all of Assignee's right, title and interest in and to the Assets.
18. At the Closing the proceeds of sale of the Assets totaled $ 1,458,703.63. Bank, which was Old Rovanco's primary secured creditor, received $ 1,008,703.63 of that amount in payment of the entire amount of indebtedness owed to it. In exchange Bank delivered to Assignee a UCC-3 termination statement releasing its lien on and its security interest in the Assets. Another $ 325,000 was paid out of the proceeds to Cashman, who was the holder of $ 375,000 in Old Rovanco's subordinated secured debt (Cashman agreed to accept $ 325,000 in full satisfaction of that secured claim). In exchange Cashman delivered to Assignee an executed UCC-3 termination statement terminating Cashman's lien on and security interest in the Assets. After the Closing Assignee paid Innisbrook the sum of $ 9,520.38 (that was 50% of the amount that was provided for in the Innisbrook Agreement, with Cashman paying the remaining $ 9,520.37 pursuant to his agreement with Assignee).
All remaining proceeds of sale have been held by Assignee for the benefit of Old Rovanco's creditors in accordance with the Assignment, except that:
(a) Because Assignee assumed the Innisbrook Agreement and then paid half of Innisbrook's charges, Innisbrook was given priority over all other unsecured creditors.