The opinion of the court was delivered by: Matthew F. Kennelly United States District Judge
MEMORANDUM OPINION AND ORDER
MATTHEW F. KENNELLY, District Judge
On April 2, 2009, the Court granted the trustees of the Fox Valley Laborers' Health and Welfare Fund and the Fox Valley Laborer's Pension Fund (collectively, the Funds) a $107,273.24 judgment against Lanas Construction, Inc., for unpaid contributions and dues owed under section 515 of the Employee Retirement Income Security Act, 29 U.S.C. § 1145. The Court subsequently awarded the Funds $33,299.11 in attorneys' fees and costs.
On May 13, 2009, the trustees issued citations to discover assets to Lanas Construction, Inc. and Walter Daniels Construction (Daniels) to aid the Funds in collection of the $140,572.35 combined judgment. The Funds now move for orders of contempt directed at Daniels and Jeff Lanas, president of Lanas Construction, Inc., for violations of the citations.*fn1 For the reasons stated below, the Court grants the motions in part and denies them in part.
The Court takes the following facts from the Funds' submissions in their motions for orders of contempt and from the filings in response.
A. Citation to Discover Assets Against Daniels
On May 13, 2009, the trustees issued a citation to discover assets on Daniels to aid the Funds in collection of the $140,572.35 combined judgment. The citation required the president of Daniels to appear for a citation examination and prohibited Daniels from: making or allowing any transfer or other disposition of, or interfering with, any property not exempt from execution or garnishment belonging to the defendant, which it may be entitled to or which may be acquired by or become due to it and from paying over or otherwise disposing of any money not so exempt, that is due or becomes due to the Defendant until further order of the court or termination of the proceedings.
See Pls.' Mot. For Order of Contempt Directed at Daniels, Ex. 1 at 2.
On May 21, 2009, Daniels answered the citation in writing, stating: "We currently owe Lanas Construction $2,845.00 on a project that is complete, but Lanas Construction needs to go back and do some re-work to what was done. Additionally, we have a new project starting and there is a contract in the estimated amount of $25,000 pending." Id., Ex. 4 at 1.
On July 5, 2009, Lanas Construction, Inc. filed a chapter 11 bankruptcy petition. The company sought relief from the citation, but the bankruptcy court declined to adjudicate the request. Instead, on May 12, 2010, the bankruptcy court dismissed the chapter 11 petition due to gross mismanagement.
Through subpoenas issued during the bankruptcy proceedings, the Funds obtained copies of nineteen checks, totaling $347,073.97, that Daniels issued to Lanas Construction, Inc. after receiving the citation. See Pls.' Mot. For Order of Contempt Directed at Walter Daniels Construction Co., Exs. 5, 6.Bank records indicate that Lanas Construction, Inc. deposited the checks into accounts at Fifth Third Bank and Community Trust Credit Union between July 27, 2009 and May 19, 2010. Id.
One of the checks was a $25,000 check deposited by Lanas Construction, Inc. on July 27, 2009. See id., Ex. 5, at 1. In a motion Daniels filed seeking an accounting, Daniels admitted that it tendered a check for $25,000 to Lanas Construction, Inc. in July 2009 but stated that "the funds were separate and apart from the contract referenced in the Answer to the Citation." See Daniels Mot. for Accounting at 2. Instead, Daniels characterized the July 2009 payment as a loan provided "to enable Lanas to stay in business." Id.
The Funds now submit to the Court evidence linking the July 27, 2009 check to a completed construction contract. See Pls.' Mot. for Contempt Sanctions Directed at Daniels, Exs. 5, 8. Specifically, records from First Third Bank show that the $25,000 check posted on July 27, 2009 was check number 33841. Id., Ex. 5 at 1. A check stub bearing the same number says it is payment for a project with a purchase order number of 23482. Id., Ex. 8 at 4. A Daniels purchase order numbered 23482, in turn, describes a construction project at a McDonald's restaurant. Id. at 2. An invoice bearing the same purchase order number from Lanas Construction Co. likewise describes the McDonald's project. Id. at 3. Finally, a final waiver of liens for the McDonald's construction project references a $25,000 payment and shows an execution date of July 27, 2009. Id. at 5.
In response, Daniels continues to insist, without any supporting documentation, that the $25,000 payment did not concern the $25,000 pending contract referenced in its answer. Daniels also submits a letter signed by its vice president and Jeff Lanas purporting to memorialize an agreement that the $25,000 payment would be considered a loan only in the event that the Court later determined that it violated the citation order. See Daniels Resp. to Pls.' Mot. for Order of Contempt, Ex. 4. The letter, which bears the date of July 27, 2009, states:
Enclosed is our check number 33841 in the amount of $25,000.00. Walter Daniels Construction Co., Inc. wants you to stay in business and be a strong, well-organized union contractor. However, we may have to pay that amount to your union because of the citation that was served on us by the union.
This is to confirm that you agree, if Walter Daniels Construction Co., Inc. does have to pay that amount the union, you will consider the $25,000.00 to be a loan. That you personally, and Lanas Construction, Inc. agree to repay. In other words, you agree to personally ...