The opinion of the court was delivered by: Honorable Milton I. Shadur Distict Judge
MOTION FOR ENTRY OF JUDGMENT AGAINST CHARLES LARMAN PURSUANT TO RULE 69 OF THE F.R.CIV.P.
Plaintiffs Central States, Southeast and Southwest Areas Pension Fund and Howard McDougall, trustee, (collectively referred to as the "Pension Fund"), pursuant to Rule 69 of the Federal Rules of Civil Procedure and 735 ILCS 5/2-1402(c)(3), hereby move this Court for entry of an order of judgment against Charles Larman. In support thereof, Plaintiffs state as follows:
1. On May 1, 2007, this Court entered a Default Judgment in the amount of $927,597.29 in favor of Plaintiffs and against Defendants Synergy Logistics, LLC, an Indiana limited liability company ("Synergy Logistics"); AAA Warehouse Logistics Corporation, an Indiana corporation; Goodwood & Stone Construction, Inc., an Indiana corporation; The L Group, LLC, an Indiana limited liability company; The Larman Company, an Indiana corporation ("Larman Company); Larman Properties, L.P., an Indiana limited partnership; St. Clair Properties, L.P., an Indiana limited partnership; Stout Field Properties, LLC, an Indiana limited liability company ("Stout Field Properties"); and Synergy Freight Services, LLC, an Indiana limited liability company. (A true and genuine copy of the Default Judgment is attached hereto as Exhibit 1).
2. To date, the full amount of the Default Judgment remains due and owing by Defendants in the amount of $927,597.29 plus post-judgment interest in the amount of $111,118.42.
3. Charles Larman is an owner and officer of each Defendant and is the individual responsible for determining when and what bills of Defendants are paid.
4. Plaintiffs seek entry of a judgment against Charles Larman as a corporate insider of Defendants Larman Company, Stout Field Properties, and Synergy Logistics who received corporate funds of these Defendants when these Defendants were insolvent and unable to pay their debts to the Pension Fund. As discussed below, Charles Larman, as a corporate insider, received the total amount of $1,038,715.70 as follows: (i) Larman Company - $66,417.00; (ii) Stout Field Properties - $1,007,696 ($597,315.00 $246,681.00 $163,700.00); and Synergy Logistics - $71,318.81.
5. 735 ILCS 5/2-1402(c)(3) provides: When assets or income of the judgment debtor not exempt from the satisfaction of a judgment, a deduction order or garnishment are discovered, the court may, by appropriate order or judgment:
(3) Compel any person cited, other than the judgment debtor, to deliver up any assets so discovered, to be applied in satisfaction of the judgment, in whole or in part, when those assets are held under such circumstances that in an action by the judgment debtor he or she could recover them in specie or obtain a judgment for the proceeds or value thereof as for conversion or embezzlement. A judgment creditor may recover a corporate judgment debtor's property on behalf of the judgment debtor for use of the judgment creditor by filing an appropriate petition within the citation proceedings.
6. Plaintiffs' motion for judgment against Charles Larman is supported by Matos v. Nellis, 101 F.3d 1193 (7th Cir. 1996). In Matos, a creditor obtained a judgment against a corporation that had no assets. One of the reasons the corporation had no assets was the corporation's forgiveness of loan it made to the corporate insider. The Court held that a supplemental judgment could be entered against the insider in the suit filed against the corporation because the insider and the corporation became the same after operations ceased and the insider converted corporate assets for his personal use. See Matos, 101 F.3d at 1193.
7. Plaintiffs' claim against Charles Larman is further supported by Central States, Se. & Sw. Areas Pension Fund v. Freyco Trucking, 2004 WL 350913 (N.D.Ill. 2004) (copy attached as Exhibit 6). In Freyco, the Court allowed the judgment creditor with a judgment against a dissolved corporation to enforce the judgment directly against the corporation's distributees. The Court discussed that pursuant to Rule 69 of the F.R.Civ.P., the judgment creditor need not pursue a separate judgment against the distributees but may enforce the judgment against the distributees to the extent any assets were distributed to the distributees. The Court relied upon evidence consisting of the dissolved corporation's financial statements as sufficient to make a prima facie showing of the amount received by the distributees. See Freyco Trucking, 2004 WL 350913, *2-3.
8. On May 10, 2007, the Clerk of Court for the United States District Court for the Northern District of Illinois issued a Citation in Supplemental Proceedings to Discover Assets against the Larman Company ("Larman Company Citation"), a Citation in Supplemental Proceedings to Discover Assets against Stout Field Properties ("Stout Field Properties Citation"), and a Citation in Supplemental Proceedings to Discover Assets against Synergy Logistics ("Synergy Logistics Citation"). (A true and genuine copy of the Larman Company Citation is attached hereto as Exhibit 2, the Stout Field Properties Citation is attached hereto as Exhibit 3, and the Synergy Logistics Citation is attached hereto as Exhibit 4). On May 17, 2007, the Citations were served on each Defendant.
9. Thereafter, in response to the Citations Larman Company, Stout Field Properties, and Synergy Logistics produced certain financial documents. On June 27, 2008, Charles Larman appeared at a Citation hearing as a representative of the Larman Company, Stout Field Properties, and Synergy Logistics. (A true and genuine copy of the transcript of the Deposition of Charles E. Larman is attached hereto as Exhibit 5 ("Deposition, page __")).
10. During the Citation hearing, Charles Larman testified that the Larman Company, Stout Field Properties, and Synergy Logistics have ceased doing business and that these companies do not have any assets to satisfy the judgment. This testimony is consistent with the financial documents produced by the Larman Company, Stout Field Properties, and Synergy Logistics.
11. Schedule L of the 2006 Tax Return revealed that the Larman Company transferred to Charles Larman in the form of a shareholder loan the amount of $66,417.00. (A true and genuine copy of the Larman Company's Corporate Income Tax Return dated December ...