In re Panthera Enterprises — Transcript of Meeting of Creditors (Exhibit B)
- Date
- 2019-11-02
Summary
Exhibit B, filed November 2, 2019 as Doc 52-5 in In re Panthera Enterprises, LLC, Case No. 2:19-bk-00787, is the transcript of a meeting of creditors held Friday, October 18, 2019 in Martinsburg, West Virginia. The debtor's representative is sworn and examined by the bankruptcy trustee, with counsel for the debtor and for several creditors appearing. The testimony covers the debtor's former name, TENX Group, LLC, its affiliated entities Panthera Worldwide, LLC and Panthera Training Center, LLC, and its business of federal government contracting focused on tactical training, which it subcontracts out. The representative states the debtor has had no employees since May of 2018. The 37-page transcript closes with a request for documents within 14 days and a court reporter's certificate.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
No. 2:19-bk-00787 Doc 52-5 Filed 11/02/19 Entered 11/02/19 10:03:07 Page 1 of
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EXfflBIT B
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF WEST VIRGINIA
MARTINSBURG
IN RE: Panthera Enterprises, LLC,
Case No. 2:19-BK-00787
MARTINSBURG, WEST VIRGINIA
FRIDAY, OCTOBER 18, 2019
Dl
PANTHERA ENTERPRISES, LLC
REPRESENTEE BY JAMES PUNELLI
a witness called for oral examination pursuant to Notice of
Meeting of Creditors Hearing, and pursuant to the Fédéral
Rules of Civil Procédure by counsel located at the Old
Historic Courthouse, 2nd Floor Courtroom, 100 West King
Street, Martinsburg, West Virginia, 25401.
APPEARANCES
UNITED STATES BANKRUPTCY COURT:
Gary 0. Kinder, Esquire
United State Bankruptcy Trustée
300 Virginia Street, East
Charleston, WV 25301
304.347.3400
WENDI L. WATSON, P. 0. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
No. 2:19-bk-00787 Doc 52-5 Filed 11/02/19
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Entered 11/02/19 10:03:07 Page 3 of
37 Page 3
Rqnesenting DebtOT Pan&era: Representing Howard Shockey & Sons,Inc., Ctediton
Maik A.Lmds^,Esquiie
Bemstein & Beiicley John Good,Jr.
707 Grant St.Suite 2200 GulfTower
Pittsbuigh,PA 15219
412.456.8121
ffilindsiQ^jemsteinlaw.coni ALSO PRESENT; Unknown Parties
Represcotmg Créditer WVEDA:
Debra Lee Allen, Esquire
Spilman,Thomas& Battle,PLLC STIPULATIONS: None
48 DonleyStreet,Suite 800
Moigantown, WV 26S01
304291.7591
INDEX
LLC:
EXAMINAnON:
Douglas E. Kahle,Esquire
Bas^t,Kinscr, Leftwich & Nuckolls.P.C. By Mr. Kinder(Trustée) 4
308 Cedar Lakes Drive
Chesapeakc, VA 23322
757.382.4144
dkahle@basm^tkinser.c(nn
By Ms. Âîl^n...'-"j\ f/...v «
Reptesentiiig the Creditors SMI and Bill NeffEnteiptises: By Mr. Kaàle i.I.. h-
William J. Lcon,Esquire
1200 Dois^ Avenue By Mr. Léon 106
Moigantown, WV 26501
304.554.3880
By Mr. Good 123
Repiesenting Unknovm Oedhor.
Wesley Queen,Esquire
Damei's Law Finn,PLLC
BT&T Square EXHIBITS:
300 Summeis Street, Suite 1270
Charieston,WV 25301
304.342.6666 None
Page 4 Page 5
1 P-R-O-C-E-E-D-I-N-G-S 1 questions, but also Mark Ltndsay is here representing the
2 10:00 AM. 2 debtor. Whafs the debtor's address?
3 MR.KINDER: 3 A Its facillty Is at 2506 Fish Pond Road,Old
4 Q. It is Friday, October 18th, wcYc in Martinsburg, 4 Fields, West Virginia. Mailing address,215 Dépôt Court,
5 West Virginia,in the case ofPanthera Enteiprises, LLC, 5 SE,Leesburg,Virginia,20175.
6 Case No. 19-787. I believe the debtors représentative is 6 Q. Okay. And I believe you have in front ofyou your
7 here,and his name is James Punelli. l'm locidng at his 7 schedules-
8 drivers license, and it does appear to be him. Mr. Punelli, 8 A. Yes.
9 if youll raise your right hand, ni swear you in. Doyou 9 Q. — and the pétition. Those are net the ones that
10 sclemnly swear or afiirm the testimony youVe about to give 10 contain your—your signature where you handwrote your
11 is the truth,the whole Iruth and nothing but the truth? 11 signature.
12 A. I do. 12 A Right
13 WHEREUPON, 13 Q. I believe those are back at your counsei's office,
14 JAMES PUNELLI 14 we discussed that prior to going on the record. But do
15 having been first duly swom,testified as fotlows: 15 those - are those-do those accurately reflect the
16 DIRECT EXAMINATION: 16 schedules and pétition that you did sign?
17 BY MR.KINDER: 17 A Yes.
18 Q. Okay. Canyouidentiiythe-thedebtor,please? 18 Q. Okay. Andtheonethatwasfiledisthe-an
19 The name ofthe debtor? 19 accurate copy ofthe ones you - you signed?
20 A. Yes,Panthera Enterprises, LLC. 20 A Yes.
21 Q. Okay. And you are the debtor's représentative? 21 Q. Okay. And the coiporate resolution authorizing
22 A. Yes. 22 the debtor to file, you signed that, also?
23 Q. Okay. Also,I believe well introduce the — the 23 A Yes.
24 creditors counsel as they ask question, ifthey ask 24 Q. Okay. Do you know the date that the debtor was
2 (Pages 2 to 5)
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1 incorporated? 37
1 A. Yes.
2 A. It's October 20IL I don't remcmber the spécifie 2 Q. -Panthère? Now there's another entity with a
3 date.
3 Panthera in its name invoived in this case, also?
4 Q. Okay. AndwasItPantheraEnterprises.LLC.at 4 A. Yes,Panthera Training,LLC
5 the time?
5 Q. Ok^. And the différence wouldbe that the one
6 A. The nameat the time wasTENXGroup,LLC. 6 that's associated with the owner has Center in its name?
7 Q. Okay. And when did it change its name to Panthère 7 A. Correct
8 Enterprises, LLC?
8 Q. Okay. Is there any other Panthera named entities
9 A. 2016.
9 that are invoived in this case?
Q- Okay. Do you know about what month? 10 A. Na
11 A. I don't recall exactiy.
11 Q- Okay. So the — the one Panthera that is
12 Q. Okay. Andjust toclarify certain things,! know 12 currently unaflRliated vrith the debtor is Panthère Training,
13 that there are varions entities with the name Panthère in it 13 LLC?
14 that are invoived in this case,Pm gonna kinda go through 14 A. Correct
15 that. The ones that are aSiliated with a similar ownership
1^ Q- Okay. Can you give a briefdescription ofthe
16 group, which ones are those? 16 nature ofthe business?
1^ A. Panthera Woridwide,LLC,and Panthera Training 1 A- Yes,fédéral govemment contracting primarily in -
18 Center, LLC. 18 - in the military spécial opérations, kinda focused,and law
19 Q. Okay. So those are afiiliated with similar owners 19 -fédéral law enforcement and inteil^ence agencies. It's
20
20 primarily tactical training.
21 A. RIght 21 Q. Okay. Does it operate that training,the actual
22 Q. -to Panthera Enter- 22 training itselfor does it subcontract that out?
23 A. That's correct 23 A. Panthera Enterprises subcontracts it ont
24 Q. — the debtor — 24 Q. Okay. Who aie the — who does it subcontract it
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1 ont to? 1 local zoning type-type things,and you know,for some of
2 A. Well, we — we,in the past have subcontracted it 2 the equipment for ammunition and munitions there's fédéral
3 to Panthera Training Center,and-and as ofJnne 1 3 firearms with, you know,the fédéral firearms or eiplosive
4 subcontracting to Panthera Training. 4 iicenses that migbt be required,and iffiiere's any,you
5 Q. Okay. Anybody else that it— 5 know,international then there-there could be a state
6 A. No. 6 departmentarms export régulations that-that gets
1 Q. Okay. Sojustonesubcontractoratatimethat 7 invoived, but there hasn't been any ofthat for—for a
8 does the actual training? 8 while.
9 A. Right. And well, 1 should — I should add that 1 9 Q. Okay. And who would get the license, the debtor
10 mean,there are independent like 1099s,instructors and ail 10 or the subcontiactoi?
11 that nsed in the past nnd bat those could be considered 11 A. It could be either,I think it dépends.
12 strictiy speaidng snbcontractors, but — 12 Q. Okay. Are you awaie ofany issues that might
13 Q. Mm-hmm. 13 arise invotving licensing that the debtor might be ^ing?
14 A. - but they've worked for like, for instance,for 14 A. Na No,notthat —
15 — Panthera Training Center bas employed them as 15 Q. You're not aware ofany l^)sed licenses or
16 instructors. 16 opérations without license, or anything like that?
17 Q. Okay. So the debtor themselves hasn't employed 17 A. Well,from a license standpoint,1 mean,the
18 any other subcontractors- 18 fédérai firearms has been through the subcontractor,so it's
19 A. No. No. 19 not —not the debtor specifically. And the anns export
20 Q. - in the past year,say? 20 control needs to be renewed,you know,but — but that
21 A. No. 21 doesn't impact any — anything happening right now.
22 Q. Okay. Are there any spécial licenses required to 22 Q. Okay. When do you expect to have to renew that?
23 operate a làcility like that? 23 A. Probably do that next month.
24 A. Na I mean — Weit there's, you know,the state 24 Q. Okay. Ail right. Who is the owner ofthe debtor?
3 (Pages 6 to 9)
WENDI L. WATSON, P. 0. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
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1 A. It would be myself,James Pimelli,and — and
37
1 Q. Okay. How long have you and Raymond Jones owned
2 Raymond Jones. 2 50 percent each?
3 Q. Okay. And u4tat percentage do you own? 3 A. Since the inception,2011.
4 A. 50 percent 4 Q. Okay. So since it was through TENX Group ~
5 Q. And Raymond Jones? 5 A. Right
6 A. sa 6 Q. -LLC? Okay. Are there any other officers
7 Q. Who aie the officers ofthe debtoi? 7 besides the two ofyou?
8 A. Both Raymond Jones and — and myself,James 8 A. No.
9 PnnellL 9 Q. How many employées does the debtor have?
10 Q. Okay. Do you havc spécifie titles? 10 A. None.
11 A. Well,Raymond Jones bas been,in — in the past 11 Q. Okay. Anddoyoupayyourself, and whenisayyou
12 bas been CEO and l've been président but — but most I 12 1 mean the debtor, does die debtor pay you and Mr. Jones
13 think normaOy we use managing directors as titles. 13 salaries or do you take draws fiom profits?
14 Q. Okay. And do you ail bave a foimal breakdown of 14 A. Well, yeab, it would be draws, but 1 mean at this
15 lesponsîbilities between the two ofyou? 15 time, you know,it hasn't-there hasn't been any for some
16 A. Notformat but- but informally, you know,Ray - 16 time.
17 - Raymond bandies primariiy business development and-and 17 Q. Okay. When's the last time you got paid?
18 I do a lot ofthe operationai aspects. 18 A I mean,from the debtor it's- it's been over a
19 Q. Okay. In ternis ofobligating the debtor for any 19 year.
20 sort ofdebts, both ofyou would be - bave the authority to 20 Q. Okay. l'il just-just alert you two now,if you
21 obligatethedebtor- 21 do décidé that you need to get paid, either one of you,for
22 A. Correct 22 the work you're doing -
23 Q. -fordebts? 23 A. Right
24 A. Correct 24 Q. - you need to contact your attorney, you'Il need
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1 court authorization - 1 A I mean,it dépends because it's mostly, you know,
2 A. Right 2 the debtor bas the focllity and — and any work that it
3 Q. -todothat. 3 mlght have any contracts would hc suhcontracted ont So,
4 A. Right okay. 4 you know,optimally, you know,if-If the woridoad
5 Q. But your attoraqr is experienced in-in handling 5 increased tremendousiy,yes,we mlght have some
6 that So before you take any draws, no matter how 6 administrative people.
7 profitable you are - 7 Q. Okay. But it can - it can fiilly operate with
8 A. Right Right 8 just the two of you?
9 Q. — as long as you're in bankruptcy speak to your 9 A. Right.
10 attorney first and let them work through that process. So 10 Q. Okay. Do you or Mr. Jones have other forms of
11 no employées. When's the last time the debtor had an 11 employment other than the debtor?
12 employée? 12 A At this time, no.
13 A. IbelieveitwasMay of2018. 13 Q. Okay. How are you guys surviving in teims of your
14 Q. Okay. And how many employées did you have at that 14 - your,if you're not diawing a salary and not — not
15 time? 15 taldng any draws?
16 A. At that time it would be three. 16 A I mean,well, you know,we had some money conting
17 Q. And do you anticipate hiring any new employées? 17 from, you now,Pantbera Training Center and — and but in
18 A. No,1 don't anticipate it 18 teims ofjobs. Now we've had some other—other activities
19 Q. Okay. Normally Fd ask ifthere were any family 19 going on outsldc of— ofEnterprises.
20 members employed, but it sounds like with - 20 Q. Okay. So you ail are drawing some income fiom the
21 A. No. 21 afifiliating company?
22 Q. -no employées,thafs-there aient any. So 22 A Right
23 since May of2018 you haven't had any employées. And when 23 Q. Okay. Ail right,let's go through the affiliating
24 the debtcr is operating optimally, would you have employées? 24 companies. Befcie I kind offocused on the ones with the
4 (Pages 10 to 13)
WENDI L. WATSON, P. O. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
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1 37
Panthera name before, but what other companies do you and 1 Q. Okay. This Panthera Worldwide, what does it do?
2 Mr. Jones own? 2 A. Weti,it bas primarily one-one larger
3 A. Those are — tbose are it, the Pantbeni Training 3 govemment contract that-the focus of Panthera Worldwide
4 Ceoterand Pantbera Worldwide. 4 is, you know,activitiesoutsideofthe country. Sowehave
5 Q. Okay. And those are the only ones? 5 a large Department of Defense contract for training, but —
6 A. Right 6 but right now there's no task orders performing on it
7 Q. Okay. 7 Q. Okay. Is it generating income right now?
8 A. And in the past we had a Pantbera Mission Systems, 8 A. Not right now,no,there's no task orders
9 but that's not operating anymore. 9 performing.
10 Q. Okay. What does Panthera Training do? 10 Q. Ok^. Do those two entities, do they utilize the
11 A. Panthera Training? 11 facility that Panthera Enterprises owns?
12 Q. Center. Panthera Training Cenier? 12 A. Yes. I meatt for the — the two contracts that
13 A. Pantbera Training Center. Weil — 13 are active right now. With Panthera Training Center it does
14 Q. I fell on the same track I was worried about. 14 utilize the facility.
15 A. Right Panthera Training Center primarily 15 Q. Okay.
'
16 operated the training Cacility prior to June oflast year. 16 A. And Panthera Worldwide does have the potentiai if
17 and — and,you know,cnrrently it bas a couple outstanding 17 there's any future task orders to perform. But at this
18 contracta with the govemment and in die past Panthera 18 point,I said since June of last year,Panthera Training has
19 training bas — bas performed on those. 19 had work subcontracted to it since they had been leasing the
20 Q. Okay. And that's where you're cmrently drawing 20 facility.
21 your income fix)m is, you personally - 21 Q. Okay. IfPanthera Training Center and Panthera
22 A. Right 22 Worldwide are utilizingthe facilities ofPanthera
23 Q. -is Panthera Training Center? 23 Enterprises, LLC,is there a contract that's signed or is-
24 A. Right 24 is that, like a wiitten contract or is itjust an
'' '' ' ' ' ■■■■ ■
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1 understanding since it has common ownership? 1 and potentiai income tax Uabfli^
2 A. I mean,it-it's — it's been an understanding. 2 A. Correct
3 you know,in -in die past when we did utilize it yes. 3 Q. Ok^. This year, year-to-date, wbafs the gross
4 Q. Okay. And did-does Panthera Training Center, 4 income ofthe debtor been?
5 LLC,and Panthera Worldwide,do they pay any sort oflease 5 A. WeU,it,on here it's ~ It's — It's been,let's
6 payments or rent to the debtoi? 6 see 1 — I beUeve we had 1.7 miUlon when we filed,and
7 A. WeU,they did in the past but and — and again. 7 there's been an addition $170,000.00.
8 we — we had a lease in place since June 1 oflast year with 8 Q. Okay.
9 Panthera Training,and-and they-they had operated the 9 A. So somewbere In the 1.8 million range.
10 Eacility and paid the rent 10 Q. Any idea what the net income could've been?
11 Q. Okay. Are there any issues cunentiy with any 11 A. Do 1 have that filed? I don't have the exact
12 sort of withholdings that weren't made or any sort oftax 12 numbers,I don't wanna say if1 don't recaU the exact
13 issues relative to any sort ofemployée or — or trust fimd 13 numbers so far.
14 issues? 14 Q. Is it your sense that ifs been profitable -
15 A. There are — there's real cstate taxes,and there 15 A. Yeah.
16 are some state past due taxes fhim previous years. 16 Q. - year-to-date or unprofitable?
17 Q. Income taxes? 17 A. Yes,iPs been profitable.
18 A. Yes,state income taxes due. And for Panthera 18 Q. So you think die net inoome's been positive?
19 Enterprises I don't believe there's any trust ftind — 19 A. Yes.
20 Q. No,no Workers'Comp,no Unemployment,no-none 20 Q. Okay. Lookrng at the taxes that you ail provided.
21 ofthose types of-no withheld empioyee income taxes? 21 the 2018 and 2019 it looks like it was not profitable, those
22 A. I believe — Pm almost sure ail that is canght 22 two years, is that conect?
23 up.
23 A. That — that's correct
24 Q. Okay. So the tax issues are the property taxes 24 Q. Okay. Does the debtor dérivé any income other
5 (Pages 14 to 17)
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1 than fiom its principal business? 1 Q. -Ijustasking,tiyingtogetasenseofhow,
2 A. Na 2 what the cash flow has been like since you filed. I know
3 Q. Okay. Since you filed your pétition do you think 3 that there's some others. Do you think that you've been
4 ifs been — there's since been a positive cash flow or a 4 generating enough to pay ail your —
5 négative cash flow? 5 A. I think it's — I think ifd be adéquate,yes.
6 A. I would — I would say it's positive, yeah. 6 Q. Okay. Is the business seasonal in nature in the
7 Q. Okay. Have you been payingsecuredcreditors 7 sense that there aie certain piedictable seasons when
8 since then? 8 business increases versus —
9 A. West Vii^nia EDAs gotten payments. 9 A. Well-
10 Q. Okay. If you fectored in the normal payments that 10 Q. -decreases?
11 you would make to secured creditors, would it be a positive 11 A. -yeah. In-in, yon know,December/January it
12 cash flow then or has the positive cash flow resulted fiom 12 -it-it—there's — there's somewhat ofa lull, and
13 not making — 13 that — but that ail dépends, but because ofthe training.
14 A. Well — 14 you know,the holidays, and for the final fiscal quarter.
15 Q. — certain payments because ofthe bankmptcy 15 govemment fiscal quarters leadtng up to the end of
16 protection? 16 September there's-there's often qnite a bit of activity.
17 A. Well,I mean,I guess it dépends on a couple 17 Q. So increase is-
18 factors,it dépends on the plan, you know — 18 A. Yeah.
19 Q. Mnvhnrai. 19 Q. — consistent with the — the—the govemmenfs
20 A. — that we wanna corne forward with, which,you 20 -
21 know,is still being worked on,and — and I — and -and 21 A. The govemment,yes.
22 the- 22 Q. Okay. For the pastyear, have you closed any part
23 Q. I dont think you have to anticipate,just — 23 ofthe facility or shuttered it, or anything like that?
24 A. Yeah. 24 A. Well,Ifs-it-ifs-it has been leased by
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1 Panthera Training,and -• and, you know,to my knowledge, 1 like checking accounts or—
2 tt's ail-it's ail operating. 2 A. Tbey're both checking, yeah.
3 Q. Okay. No- no change where you've sectioned ofT 3 Q. Ok^. So there were two checking accounts-
4 a portion and -and shut it down in order to make- 4 A. Right
5 A. Not that l'm aware o( na 5 Q. - with Atlantic Union?
6 Q. Ok^. Allright. Bank accounts, you had some 6 A. Right
7 pre-petition bank accoiuits. I believe those have been 7 Q. And you've deactivated those?
8 closed,coirect? 8 A. Deactivated, yes.
9 A- Well — well,there's — there's two that are open 9 Q. And then you've opened new accounts,correct?
10 that — that,and I tietieve 1,1 don't know Ifit passed 10 A. Yes.
11 through the counsel or not, but we're walting to make sure 11 Q. And 1 believe you've given us documentation to
12 no — no outstanding payments coming in, because — 12 thateffect?
13 Q. Right 13 A. Yes.
14 A. — it's very hard to change, yen know,govemment 14 Q. And who is that with?
15 payments,and — 15 A. WithSunTmst
16 Q. Okay. So I should say inactive,correct? 16 Q. Ok^. And similariy,theyVe a checking account?
17 A. Tbey're inactive, but— 17 A. Yes.
18 Q. RighL 18 Q. Just a checking account?
19 A. -Just In case anyofthose payments corne through 19 A. A checkiog account yes.
20 we're waiting until probably at least the end ofthe month. 20 Q. C^y. In the past two years, has ail income that
21 Q. Okr^. And—and who were those bank accounts 21 the debtors received been deposited into a checking account?
22 through? 22 A. Yes.
23 A. Atiantic Union Bank 23 Q. Okay. So any income that cornes through the
24 Q. Ok^. And what were the nature ofthose accounts. 24 checking account and then is disbursed as needed fiom the
6 (Pages 18 to 21)
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1 checking account? 37
1 A. No.
2 A. Ycs.
2 Q. Okay. Any ej^ttse-any payments fiom the
3 Q. Okay. Has the debtor ever received cash?
3 debtor? When'stheJasttimeyoutookadiaw.Ishouldsay,
^ A. Wel],letme--Ietme-
4 m start with that?
5 Q. Okay.
8 A, Froin-<fromEDterprise,froDi the debtor,it-it
® A. — let me clarify. 6 wasseveraimontfasago. I believe it's In-in the
' Q. Yeah,go —
? documents —
8 A. There-therebavebeenthe-the,sincewe 8 Q. Okay.
9 s^ed the lease with Panfliera Trainiog,the monthly 9 A. -for tbose.
10 payments to West Viiginia EDA hâve been made directly by 10 Q. And how do you designate that in -would itjust
11 Training to them on our behalt
11 be a check to you?
12 Q. Okay.
12 A. Yes. Or —or—
13 A. So that — that money has not gone into the 13 Q. Or to Mr.Jones?
14 checkiog account
14 A. Yeah. Yeah.
18 Q. Okay. So that money has not gone — 18 Q. And is that identifiable in the bank records that
16 A. Right 16 die paymenfs to you?
1? Q. -through check- 17 A. ltshouldbe,yes.
18 A. Right
18 Q. Okay. Otherthanthose payments to you or Mr.
19 Q. Even though it probably is- 19 Jones, has fiinds ofthe debtor been used to pay any expenses
20 A. Yeah.
20 ofany other entity?
21 Q. -considered income?
21 A. In — in what time period?
22 A. It is most definitely income, yes. 22 Q. In the past year?
23 Q. Okay. Isthereanythingelsesimilarto that that 23 A. No.
24 have — has not gone through the- 24 Q. Okay. So ail expenses have been expulses ofthe
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1 debtor or diaws to you or Mr. Jones? 1 receivable?
2 A. As — as far as 1 can recoUect, yes. 2 MR. LINDSAY; It does not seek collection ofthose
3 Q. Ail right. Okay. Lefs talk about the debtoi's 3 accounts receivable.
4 assets. I noticed on your schedules you have an accounts 4 MR KJNDER; Okay. Maybe you could just describe
5 receivable of$777,700.00. Can you describe tfaose accounts 5 that adversaiy proceeding briefly.
6 leceivable?
6 MR LINDSAY: The adversaiy does relate to amounts
7 A. Yes,it's —ifsmoney owedfromPanthera 7 due,and delàults under the operative contiact documents
8 Training,and I don't—I don't have die schedule in front 8 between the debtor and Panthera Training. Theadversary
9 of me. 9 seeks turnover ofthe real propeity and other assets from
10 Q. And I noticed that ifs-
10 Panthera Training.
11 A. Idon'tknow what other—other is in there. 11 MRKINDEROk^.
12 MR.LINDSAY; I belteve thafs the bulk ofit. 12 MR LINDSAY; Thafs the — thafs the primaiy
13 Q. Yeah. 13 cnix ofthe adversaiy.
14 A. Yeah,that's most ofit 14 MR KINDER Okay.
15 Q. And ifs — ifs designated as over 90 days old. 15 Q. Your attomqr just gave a briefdescription ofthe
16 A. Right 16 adversaiy proceeding that wasfiled. Is that consistent
17 Q. Typically that indicates a collection issue if 17 with your underetanding ofthe lawsuit?
18 ifs over 90 days old, but ififs ail fiom one source, or 18 A. Yes.
19 the majority ftom one source,that might change that 19 Q. Okay. So it sounds like it doesn't speak to some
20 équation. Is that an accurate statement or is that- 20 ofthe accounts receivable. Do you peroeive those accounts
21 A. Yes. Yes.
21 receivable as being collectible?
22 Q. Okay. And l'm awaie that last evening a adversaiy 22 A. l'm — l'm not sure.
23 proceedingwasiiled,and your attorney maywannaspeakto 23 MR LINDSAY; May I answer?
24 this,does that adversaiypioceedingspeaktothese accounts 24 Q. Okay. You'll defer to coimsel.
7 (Pages 22 to 25)
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1 MR.LINDSAY: The collectible is a-is a 1 A. Ves.
2 judgment call, but I-1 would yes. 2 Q. But Panthera Training Center, you and Mr. Jones
3 MR.KINDER: So this is a viable asset — 3 own?
4 MR.LIMDSAY: Yes. 4 A. No,the debtor owns.
5 MR.KINDER: — youbelieve? Okay. 5 Q. Oh,the debtor owns,okay.
6 Q. Now it shows that the debtor is an owner of 6 MR. LINDSAY: Isthat-
7 Panthera Mission Systems,LLC. 7 A. Oh,no.
8 A. Correct 8 MR LINDSAY: Ifs an 80 percent.
9 Q. Whatisthat? 9 A. Ri^t
10 A. WeU,it's-it's~reaUy,it'sdefanct I 10 MR LINDSAY: Is that correct?
11 mean,Ifs — so we're—wc're — ifs been closed down, 11 A. Ifs80,right
12 but officlally ifs still there, but ifs being closed down. 12 MR LINDSAY: Yeah,ifd bc page,ifs Page 11 of
13 And it was intended to — to do some aviation work which we 13 the-if you look at the top.
14 never—never ended up doing. 14 A. RIght Rl^t
15 Q. Are any assets in — 15 Q. Okay. There we go,okay. AUrigJiL Sothe
16 A. There's no assets, none,DO. 16 debtor owns 100 percent ofPanthera Worldwide,LLC?
17 Q. Okay. And IVe also seen where it says see 17 A. Rlght
18 continuation sheet under non-publically and tiaded stock. 18 Q. And then Panthera Trainii^ Center, the debtor owns
19 Does the debtor own other businesses? 19 80 percent?
20 A. Not other dian the three that — Panthera Training 20 Q. And then who owns the other 20 percent?
21 Center,Panthera — Panthera Worldwide,Panthera Mh»ion 21 A. AmanbythenameofDave,DavidDolan.
22 Systems. 22 Q. And who is David Dolan?
23 Q. Okay. So Panthera Mission Systems the debtor 23 A. We originally built the facility,and wben we—
24 owns,correct? 24 we formed Panthera Training Center,and -and purcbased the
Page 28 Page 29
1 facilily we — he had — he was given a 20 percent stahe in 1 contracts with Panthera Training Center,LLC,are thqf
2 it- 2 perfoiming?
3 Q. Okay. Doeshehave — 3 A. There are two small contracts performing, yes.
4 A. — for services. 4 Q. Okay. So who are the managers ofPanthera
5 Q. ~ any management responsibility? 5 Worldwide,LLC?
6 A. No. No. 6 A. It wonld the same,Ray Jones and myself
7 Q. Okay. So his interest is purely financial? 7 Q. Okay. And then who are the managers ofPanthera
8 A. Yes. 8 Training Center,LLC?
9 Q. Ok^. And Panthera Worldwide,how much — vdiat 9 A. Ray Jones and — and — and me.
10 are the assets that it has? 10 Q. Okay. And since ifs owned the debtor,I wanna
11 A. I mean,other—other than a currenfiy non- 11 get into a little bit more ofthat income. The Panthera
12 performing contract there's no assets. 12 Training Center,LLC,which is where youVe received your
13 Q. Okay. And Panthera Training Center, LLC,what 13 income personally in the past year, is that correct?
14 assets does it have? 14 A. Well,yes,thafs correct
15 A. Well,I mean,it bas — has some contracts, and 15 Q. Okay. And Panthera Training Center,LLC,has been
16 really thafs — thafs it And there was — there's a — 16 profitable?
17 Do you care to speak to the personal property issne at ail, 17 A. No,I don't believe it bas been, no.
18 or — for the training center? 18 Q. Okay. How have you documented your,the income
19 MR.LINDSAY: I dont know that those are assets— 19 you have received fiom Panthera Training Center?
20 A. Ohay. 20 A. I mean,ifs — ifs recorded in — in a ledger in
21 MR.LINDSAY: - ofPanthera Training Center. 21 the — in the —
22 A. Well,they're not Yeah,yeah,they're not So— 22 Q. Okay.
23 Q. Okay. You mentioned that Panthera World- 23 A. — inthebooks.
24 Worldwide's contracts were non-peiforming. Are the 24 MR KINDER- l'm just going to ask your counsel if
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1 you could provide us with the bank statements for-of
for37 1 can only share with permission. So I dont know ifyou ail
2 both ofthe two subsidiaries. l'd like to take alook at 2 wanna speak to that afierwards or-or what
3 that. 3 MS. ALLEN: Sure.
4 MR.LINDSAY; Sure. We can do IhaL 4 Q. Allright Olher than the three LLCs weVe
5 MR.KINDER: Well add that to- 5 discussed,does the debtor own any other stock in any other
6 MR.LINDSAY: How far back would you like us to 6 business?
7 go? 7 A. No. No.
8 MR.KINDER: Last year. 8 Q. Any sort ofinvestment stock?
9 MR.LINDSAY: Okay. 9 A. No.
10 MS.ALLEN: Could we also receive a copy ofthose 10 Q. Okay. Allright The debtor does own real
11 statements? Gary? 11 property, ifs the facility at 2506 Fish Pond Road,Old
12 MR.KINDER; We can*!share those without the — 12 Fields, West Virginia, is that the only teal property the
13 MR.LINDSAY; No. 13 debtor owns?
14 MR.KINDER: -debtor's permission. You could 14 A. That's correct. And It's two parceis —
15 ask the court for thaL 15 Q. Yeah.
16 MS. ALLEN: Okay. 16 A. — but It's the saine address.
17 MR.KINDER: Ifthe debtor has- 17 Q. Ifs two parceis that are operated as one
18 MS.ALLEN: Okay. 18 facilify?
19 MR.KINDER: -gives us permission, we can pass 19 A. Right Right
20 fliose along,or you ail can — can communicate directly. 20 Q. Okay. And the appraised value is $15,050,000.00?
21 MS. ALLEN: Okay. 21 A. Yes.
22 MR.KINDER: But- 22 Q. And does that-is that accurate, to the best of
23 MS.ALLEN: Okay. 23 your-
24 MR.KINDER: -any ofthose sorts ofthings we 24 A. Yes.
Page 32 Page 33
1 Q. -knowledge? Okay. AllrighL Debtor tists 1 A. No.
2 that it has machineiy,equipment, vehtcles of$900,000.00, 2 Q. OkîQr. Soit would be the-the buildings
3 is that correct? 3 themselves?
4 A. PrimarQy the pre-fab buildings. 4 A. Correct
5 Q. Okay. Andso,the pre-fab buildings sit on the 5 Q. Okay. How about the — like ofSce fiimiture and
6 property? 6 sort ofthing that is inside there, who-who owns that?
7 A. Correct 7 A. Well,that — the personal property was signed
8 Q. But the/re net permanently attached? 8 over to SMI at some point in the past,and ifs belng used
9 A. Na 9 at the facility now.
10 Q. So — so a creditor, or whoever,could — could 10 Q. Okty. Andwho'sSMI?
11 attach those without attaching- 11 A. They're one of the debtors. Or one —one ofthe
12 A. I- 12 creditors,l'm sorry.
13 Q. -thereal- 13 Q. Allright. SoyouVestgnedit—youVesigned
14 A. That's a question Ican't— 14 over title, or you signed over a secuiity inteiest?
15 Q. Okay. 15 A. It was —it was title.
16 A. — can't answer. 16 Q. So-
17 Q. Do they sit on a foundation? 17 A. Yeah.
18 A. No. 18 Q. — one ofthe creditors is SML and youVe signed
19 Q. Okay. What are the pre-fab buildings used for? 19 over titie to ail ofthe personal property?
20 A. Primarily office and classroom meetings, you know. 20 A. Correct
21 ciassroom training focilities. 21 Q. When was that?
22 Q. Okay. Yeah, you-theyre iisted as modular 22 A. It was sometime last year,1 — I — I don't
23 office buildings. Is theie any other machinery or equipment 23 recall the exact date.
24 that the debtor owns? 24 Q. Sometime in 2018?
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1 A. Yes. 1 A. Correct
2 Q. Okay. And was that transaction documented? 2 Q. Okay. AlltighL Is there any assets ofthe
3 A. Yes. 3 debtor that we havent talked about?
4 Q. Okay. Fil ask for a copy ofthat, the 4 A. No.
5 transaction papers for that, ifyou don't caie. Is that 5 Q. Okay. Fm gonna briefly kinda go through some of
6 something you think you guys can corne up with? 6 your creditors,the daims that you listed, particularly the
7 MR.LINDSAY; m have to ask Jim about tiiat. 7 especially large ones,and -and just kinda ask you some
8 A. Yes. 8 général questions about those. One ofthe creditors, Howard
9 Q. Ok^. 9 Shockey & Sons, Inc.
10 MR.LINDSAY: But Fm sure we can. 10 A. Right
11 Q. AUright And \^hy was it transfened to a 11 Q. And ifs for 1.7 million dollars?
12 creditor? 12 A. Right
13 A. It was-it was part ofthe agreement we made to 13 Q. What is that?
14 them on — on — on,you know,on the payback of- of the 14 A. Construction. It was done in,I think,2014/'1S.
15 debt 15 Q. And thafs secured by the debtoi's facility?
16 Q. And what debt did — what debt is that? 16 A. Correct
17 A. Justaloan. 17 Q. The debtoi's large — There's one to John
18 Q. Justaloan- 18 McCuskey,thafs — it has in his ofEcial capacity, thafs
19 A. Itwasaloan. 19 a tax lien from 2017. Do you know,any idea what the amount
20 Q. -th^ gave you cash? 20 ofthat daim is? A range possibly?
21 A. Secured with — yeah,secured with personal 21 A. John McCuskey?
22 property. 22 Q. Ifs a West Virginia State Tax, would be my
23 Q. Ok^. And then you transfèrred that Personal 23 impression from that.
24 property but maintained possession ofit? 24 A. West Vir^ia State Tax? Well,there's the -1
Page 36 Page 37
1 mean, we owe some reai estate taxes to the state. That was 1 A. Correct fwo — two mortgages.
2 taken the state. l'mnotsure. Is that- Is that was 2 Q. Ok^. West Virginia Paving,$640,000.00,is that
3 thatb? 3 part ofajudgment lien?
4 Q. Real estate tax is probably the SheriffofHardy 4 A. Yes,it's money owed for- we bad agreed to pay -
5 County,would be my- 5 - they had built the-did the paving work on the track
6 MR.LINDSAY: There's a beliefthat something may 6 facilities, and we agreed to pay them —
7 be due to the state, and but ifs an amount thafs not 7 Q. And they -
8 determined at least at this time. So it was identihed, it 8 A. — when we acquired the facility.
9 may or may not be something that remains on Schedule D 9 Q. And they have received judgment on that?
10 forever. 10 A. Yes.
11 MR.KINDER: Okay. 11 Q. Okay. Ail right. Moving on to your unsecured
12 Q. And Fm just asking you this for -for 12 debt,there's a daim for $714,000.00 to A.L.L.
13 information just to get a sense,so you m^ not know the 13 Construction.
14 answer,but is that tax, is it in the millions, is it 14 A. Yes.
15 something significantly less, any idea about the value? 15 Q. What ofconstruction was that?
16 A. It was part — it's part of the S79,000.00 of the 16 A. They do mainly excavation work.
17 Sheriff of Hardy County, but the state bad — 2017 is owed 17 Q. Okay. When did th^ do that work?
18 to the state,so it's part ofthat — that oumber,the 18 A. Some of this was — was in — gocs back to the
19 scventy-nine. 19 construction of the facility previous to us, it was- was
20 Q. Okay. Okay. 20 owed to them,that we assumed the debt, and then some of
21 A. Yeah. 21 that was in,I think,2014.
22 Q. Ail righL Then the West Virginia Economie 22 Q. Okay. 1.S8 million owed to Anthony Mclntyre.
23 Development Authority,6.433 million, that looks like ifs a 23 A. Right.
24 moitgage, is that correct? 24 Q. What is that?
10 (Pages 34 to 37)
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1 A. Tbat's—that'sa toan.
of 37
1 Q. What type ofinsurance?
2 Q. Aloanofcash? 2 A. Pretty mucb everytbing tbat the — liabiiity,
3 A. Yes. 3 Workers'Comp — umbrella.
4 Q. And when was that loan made? 4 Q. Okay. There's one for $224,000.00 to Azadian
5 A. Tbat was over a period I tbink,ZOlsyiô. I 5 Group. Do you know what that is?
6 bcUeve. 6 A. Yeah,the — that's a — was a loan. They'rea
7 Q. And who is Anthony Mcintyre? 7 loan Company. Short term loan company.
8 A. He's —he'sanacquaintanceofours. 8 Q. Is that an Internet lender, one that you foimd on j
9 Q. Okay. Is he in the business ofmaking loans? 9 the Internet?
10 A. No,no,he's justa welIoffindlvidaal,and — 10 A. Well,someone introduced us to tbem,but —
11 and he — well, yeab,and so we — we came to hnow him. He 11 Q. Okay.
12 — he did own the brokerage,insnraoce broherage that we — 12 A. —yeah. |
13 we uscd, but he's since sold that He's Just a wcO off 13 Q. OkîQr. What's the interest rate on that? Do you
14 individual. 14 know?
15 Q. Okay. And so, he made the loan, but he didnt 15 A. I mean,it's-it's extremdy high. Actually,I
16 take any sort of management interest in the teim? 16 don't know. '
17 A. No. No. 17 MR. LINDSAY: I dont know.
18 Q. It's purely a debt? 18 A. 20-something percent
19 A. Yes, 19 Q. Yeah,theyVe short term -
20 Q. Okay. There's $174,000.00 loan to Arthur J. 20 A. Yeah.
21 Gallagher&Co. Whatisthat? 21 Q. — tend to be.
22 A. That's for insurance premiums. 22 A. Right 1 mean,the principal on It's actually a
23 Q. That are-that were due and not paid? 23 very small part ofthat
24 A. Correct 24 Q. Okay. Do they have access to your bank accounts.
Page 40 Page 41
1 or anything like that? 1 of the operational aspects of running the facility.
2 A. Na No longer. 2 Q. Okay. Then you owe your-owed James Punelli.
3 Q. Okay. Bill NefTEnteiprises- 3 the debtor owes James-owes James Punelli $2,582,000.00
4 A. Yeah. 4 plus dollars. What is that for?
5 Q. -for$690,000.00. 5 A. Well — well,some of it is money — money put
6 A. Those are the modular buildings. 6 into the company,and some of it's back, you know,any back
7 Q. Okay. The modular— 7 payments that we, you know,paid -that we had been paying
8 A. It'salcase/purcbaseagreemeutwiththentyes. 8 ourselves previously to like 2016,'17-
9 Q. Okay. Do they-do theyhave a security interest 9 Q. Okay.
10 in those buildings? Ora- 10 A. — that we didn't receive.
11 A. Yeah,1-1 don't hnow ifit's-(indiscemible) 11 Q. How much money did you put into the company
12 -
12 perscnally?
13 MR. UNDSAY: We don't believe so. I mean,it's - 13 A. Perscnally,I mean,cash I don't — close to a
14 - it's a légal question. We don't believe so. 14 million,and then — and then, you know profits that were
15 MR.K1NDER: Okay. 15 put back in that I never actually received, we just roUed
16 Q. Allright. $379,000.00 to Duncan Development 16 it back in.
17 Croup,LLC. 17 Q. Okay. Midtown Resources is $273,000.00.
18 A. Yes. 18 A. That's a — it's another loan company.
19 Q. Whafsthat? 19 Q. Okay. Short term loan company?
20 A. It's a professional services tbat we'd contracted 20 A. Right Right
21 over tinte. 21 Q. Okay. Raymond Jones,$3.258 million dollars.
22 Q. What type of professional services? 22 A. Right
23 A. Justhe-beassistedwitbalotoftbereai 23 Q. Can you briefly describe that?
24 estate,and -aud construction tbat we did,and — and some 24 A. 1 mean,it's primariiy, you know,cash tbat be put
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1 in over «me. Probably dose to about 1.7/1.8 million,and of 37
1 A. He's — he's an individaal.
2 profits rolled back in,and then some back pay. 2 Q. Okay. Did he, is he alleging that he owed-
3 Q. Okay. SM1,LLC. 3 loaned money to-or did he do work?
4 A. That's a loan,loan and Interest 4 A. No,he loaned money.
5 Q. Okay. TheStateofWest Virginia StateTax S Q. Ok^. Allright ExecutotyContractsandExpired
6 Department for $170,000.00. Do you know what that is? 6 Leases. One ofthoseis with Panthera Tigining, LLC,
7 A- Yeab,it's — there's — some ofthe wtthbolding. 7 corrBct?
8 when we — when we — we did a previous company that-tbat 8 A. Correct
9 was operedng the fadlity. Back In 2013, we dId an asset 9 Q. And ifs my impression that possilrly that
10 purchase,we did not acquire the com|May,so a large- 10
adversary proceeding that was iiled relates to that
11 about halfofthat is the withholding because the state, you 11 contract, is that correct?
12 know,deemed that we were still responsible forthe,you 12 A. Correct
13 know — you know,we didn't acquire the company,and then 13 Q. Okay.
14 there's a passthrough and — and some sales tax. 14 MR.LINDSAY: IfI couldjust —
15 Q. Okay. Are you personaliy, do you personaliy owe. 15 MR.KINDER: Mm-hmm.
16 do you have personal liabiiity with respect to that? 16 MR.LINDSAY: -comment quidc It — it leally
17 A. No. No. 17 relates to the lease-
18 Q. Ok^. TimMiiler for $151,000.00,do you know 18 MR.KINDER: Ok^.
19 what that is? 19 MR.LINDSAY: — and not as much to the
20 A. It's, yeah,partially a loan and-and it's 20 subcontract
21 disputed — 21 MR.KINDER: Okay.
22 Q. Mm-himn. 22 MR.LINDSAY: Just to be clear.
23 A. — with the amotmt 23 MR.KINDER: Thafs helpfiil, yeah. Thankyou.
24 Q. And who is Tim Miller? 24 Q. And I guess, okay, with respect to the
Page 44 Page 45
1 subcontract, whafs your intention with respect to it? If 1 Q. Let me,and I maybe should've asked this at the
2 you've decided yet? 2 beginning Just to get a sense ofhow your business woiks.
3 A. Well,I defer to you to — 3 does the debtor obtain the govennnent contiacts and then
4 MR.L1NDSAY: Well,1 dont know that — we dont 4 subcontract out the services ofa —
5 necessarily wanna défend it, overiy state our intention at 5 A. Yes.
6 this-tfais time, we have varions options. Number one. 6 Q. Is that correct?
7 ifs-ifs,for the record, it probably makes scnse to 7 A. Yes.
8 advise that, you know,the subcontract,although 8 Q. Okay. Soifs not tbat dioffejust leasing tiie
9 outstanding, gives the debtor the soie discrétion as to 9 iàcility and whoever is leasing the fecflity goes out and
10 assigning any new woric under the subcontract. So 10 acquires the contract,the contracts come «irough the
11 essentialiy thQr dont have to give anymore work to Panthera 11 debtor, is that correct?
12 Tiaining at any time once the current work ends. They do 12 A. It could be both.
13 that by virtue ofissuing task orders, they have-there 13 Q. Okay. So the-the subcontractor/Iease-lessor
14 are-«lere's only one task order outstanding at this time. 14 m^seek contracts with govemment entities irulependent of
15 So theie's actually litde work thafs currendy assigned to 15 the debtor, is that correct? Correct me iffm wrong
16 Panthera Training,and at the debtofs discrétion thqr could 16 MR.LINDSAY: I would say,and again,that-that
17 chose to not assign any ferther work. Subcontract also is 17 could be a légal issue, but I think technically speaking as
18 executoiy contract cleariy that we would - we are in the 18 long as the/re not with the same govemmmit agencies that
19 process ofdetermining whether or not ifs necessary to 19 the debtor has contracts with.
20 reject or assume or- 20 MR.KINDER: Okay. Okay.
21 MR. KINDER: Okay. 21 MR.LINDSAY: So,and — and,as an example,the
22 MR.LINDSAY; — address in any one ofthose 22 debtor has a contract with the I and it subcontiacts that
23 numerous ways. 23 training wodc to Panthera Training to do on the fàcility
24 MR.KINDER: Ok^. 24 that it also leases to Panthera Training,there could
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1 of
conceivably be another govemment entity that Panthera 37
2 Trainingmighthavearelationshipwjththatwedontknow
1 MR KINDER; Okay. So there's timber on the
2 property?
3 about.
3 MR.LINDSAY: Yes.
4 MR. KINDER: Okay.
4 Q. And do you believe it bas some value, that time?
5 Q. So the-the debtor eams income notjust ftom
5 A. Yes.
6 leasing the facility to another entity, they also acquire
6 Q. Okay. And has that timber been timbeied-
7 contracts and then,I guess, make a profit for the
7 A. No.
8 différence between what they pay a subcontractor versus what
8 Q. -bas any ofit been timbered?
9 the contiact pays, is that correct?
9 A. No.
10 A. CorrecL
10 Q. So ifs ail still there?
11 Q. Okay. And currently that only -the only
11 A. Yes.
12 subcontractor that fits into that categoiy is Panthera
12 Q. Okay. So that is a potentiai income stream for
13 Traimng,LLC?
13 the debtor. is the seUing ofthe timber thafs on the
14 A. Yes.
14 property?
15 Q. Okay. Timber agreement with SMI,LLC,whafs
15 A. Potentially. Not-as long as it doesn't
16 that?
16 interfère with the abilityto train.
17 A. Well,the timber—tiinberrights agreement,!
17 Q. Okay. And do you have any sense ofthe value of
18 don't hnow if you wanna speak to h because it's-
18 that timber?
MR-UNDSAY: Yeah,I mean,I don't want- we 19 A. No,I don't
20 dont wanna by to characterize the entire agreement, but it
20 Q. Okay. Aspartofyourreorganization,vw>uldyou
21 is a-it's an agreement with SMI whereby some rights to
21 tiy to capitalize on that value?
22 take timber from the property where an agreement was made so
22 A. Thafs-thafs a potentiai,I think.
23 they have some rights in that regard. We'restill
23 MR.UNDSAY: Certainly, ifneedbe.
24 evaluating what to do with that agreement.
24 MR.KINDER; If—ifthat —ifitexists.
Page 48
Page 49
1 MR.LINDSAY: Yeah.
1 Q. So thafs what that contract is-
2 MR. KINDER: Okay.
2 A. Yes.
3 Q. n» contract with the Small Business Consortium, 3 Q. — is a right offirst reflisal if you would sell
4 u4iafs that?
4 thereal^
5 A We're a member ofconsortium with other businesses 5 A. Yes, malnly,I tbink, yeah.
6 that have set aside, you know,goventment contracting. We- 6 MR. LINDSAY: Yeah,and the — the agreement is
7 - we bave a HUBzone,the debtor has HUBmne désignation. 7 the primaiy APA wherei^ the debtor purchased the property-
8 There's companies in there that have, you know,Vétéran, 8 MR.KINDER: Mm-hmm.
9 Disabled Vétéran, woman owmed,and -and other set-asides 9 MR LINDSAY: — in, u/hat year was that?
10 so to form the consortium to abte to — to acquire contracts 10 A. 2013.
11 that —that are set aside for those varions things. You 11 MR LINDSAY: Ifs — ifs identified as executoiy
12 know,there—there is a cootract that the consortium ha» 12 because there are tiiose types ofitems-
13 wn under one of the members,and so any of the training 13 MR KINDER: Okay.
14 work that happens under that contract would — would corne to
14 MR LINDSAY: — that potentially could be-
15 us as a —as a member ofthe consortium. 15 could corne into play.
16 Q. Okay. You got a Ucense agreement with Panthera 16 MR. KINDER: Okay.
17 Training. We wont get into that right now. The 17 Q. So you-you're not under contract to sell the
18 you've got a contract to perform training with them? 18 property-
19 A. Yes.
19 A. No,no, no.
20 Q. Real Estate Sales Agreement to Renick G. Williams 20 Q. — to anybody —
21 and Betty P. Williams, what is that? 21 A No, no.
22 A. This IS, It's where we purchased the land from,so 22 Q. — or anything like thaï?
23 there's an agreement with-with-I guess the main tbii^ 23 A. AbsolutelyDot
24 would be a first right of refusai in it 24 Q. Okay. The Bill NeffEnterprises, the Sales
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1 Contract Purchaser. what's that? of 37 Page 51
1 training when it cornes to hospitality and-and iodging.
2 A. Tbat's the modular buildings. 2 So we didn't go outside ofthe-die student base,I guess.
3 Q. Okay. Right.okay. South Branch Inn, what is
3 Is that-that a correct characterization,I guess,from
4 that, Covenant & Agreement?
4 what you see?
5 MR. UNDSAY: Do you want me to talk about that
5 MR. LINDSAY: Yeah, it's-it's-
6 real quick?
8 Q. Okay. So-
7 A. Yeah,if~lfyoucan,yeab.
7 MR. LINDSAY: — ifs simplified, yes.
8 MR.UNDSAY: The Covenant& Agreement relates to
8 Q. So you got trainees coming in and you require the
9 if you go down two spots to the Joint Ventuie Agreement- 9 trainees to stay at the South Branch Inn or a iàcility
MR. KINDER: Mm-hinm.
10 operated by the-the South Branch Inn?
11 MR.LINDSAY: - this is reiated to hospitality 11 A. No,no,itdoesn't require that at ail,just —
12 services,and the covenant basically is the debtoi's 12 just that it's a covenant if any,you know,any outside — I
13 agreement to not, I believe,participaie or allow the-
13 guess so we wouidn't be competing with them on the
14 someotherfeciJify or Company to provide those types of
14 hospitality side —
15 services within a certain 1 would say geographical range. 13 Q. Okay. So —
16 MR. KINDER: Okay.
16 A. — outside of the training.
17 Q. Does that relate to trainees at the facility? 17 Q. So you wouidn't build your own hôtel in order to -
18 A. Right Cornet 18 - to house trainees?
19 Q. Okay. And —and does the debtorgetpaidby the 19 A. No,itdoesn't restrict that,itjust —so that
20 South Branch Inn for supplying of— 20 we don't build a hôtel to compete with them otherwise
21 A. You know,South Bi:ancb Inn was reiated to the — 21 outside of training. I believe —
22 to the property owner we had purchased ftom. So wejust- 22 Q. Okay.
23 there's lihe a covenant and agreement on,you know, 23 A. — is how to characterize it
24 competitioa,so we didn't go outside ofthe-the realm of 24 Q. Okay. AmiraSecurity Systems,Inc.. Joint Ventuie
Page 52 Page 53
1 Agreement, what is that?
1 A, Again,one of the — one of the creditors that got
2 A. Some-some work in the Mlddle East that we are 2 — that was on the paving that got a judgment
3 pursuing,and it's reaiiy non-operative at this point. 3 Q. Okay. Does the debtor have any potentiel lawsuits
4 Q. Okay. MRW,Inc., c/o Robert R. Williams, Covenant 4 other than the one it aiready filed that it may —
5 & Agreement, what is that? 5 A. Not-
6 A. It was- it's a-they were-they were going 6 Q. — recoverfrom? Thatyou'reawareof?
7 to be leasing adjacent land on a-on a shooting range,and 7 A- No. No.
8 -and we agreed to compensate them for not doing that 8 MR. LINDSAY: Well, to clarify, I mean,
9 because it would interféré with our training. 9 potentially the receivables could be part ofa sepaiate
10 Q. Okay. Okay, who is iron Force Consulting, LLC? 10 lawsuit.
11 A. They're a professionai services consultant,and 11 MR.KINDER: Right,okay. But the/re,other than
12 they did business development work for us. 12 the receivables.
13 Q. Okay. Ail right. Real quickly Fm gonna go over 13 MR. LINDSAY: Yes.
14 some ofthe légal actions. Youfiledanadversary 14 MR. KINDER: But you're not aware ofany cause of
15 proceedingyesterday. WeVe brieflytalked about it. 15 action that-that may be available other than — than
16 There's Azadian Group, UC,V. TENX Group,LLC. Canyou 16 throu^your-
17 just briefly describe that? 17 MR.LEON: (Indiscemible)-on the schedule?
18 A. It's one of the debtors tbat's pursuing a 18 MR. LINDSAY: Not currently.
19 judgment
19 MR.KINDER; That wasjust a question,that was
20 Q. Ifs a creditor? 20 not on the schedules,that wasjust me thinking ofsome-1
21 A. l'm sorry,creditor, yeab. 21 was looking at, in ternis ofthe schedules,l'm actually on
22 Q. Yeah,okay. West Virginia Paving, Inc., v. 22 the Statement ofFinancial Afiàirs,Part 3,Légal Actions
23 Panthère Enterprises formerly known as TENX Group, what is 23 and Assignments,and that caused me to ask a question about
24 that? 24 potentiel assets.
14 (Pages 50 to 53)
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1 MR.LEON: Thankyou. 1 debtor?
2 Q. Okay. Otherthan whafs listedonyourschedules. 2 A. Correct
3 and weVe kind oftalked through,does the debtor lease any 3 Q. Okay. Is there any property that the debtor
4 pioperty to any other party? 4 possesses other than those things that belongs to a
5 A. No. 5 différent party?
6 Q. Okay. E)oes the debtor lease any property iirom any 6 A. Na
7 other party? 7 Q. Okay. Is there any property that anybody else
8 A. Na 8 possesses that belongs to the debtor other than cash and any
9 Q. Okay. Is, I guess, ail the personal property,and 9 bank account?
10 title is actually in, that the debtor possesses, is actually 10 A. Na Na ;
11 in a différent entity that-that you transferred that to. 11 Q. Okay. Does the debtor have any sort ofinventory?
12 is it SMI,or something like that? Or am I tnisremembering? 12 A. Na ^
13 A. That —tbat's — 13 Q. Okay. Does the debtor own or lease any motor
14 MR LINDSAY: Thafs correct. 14 vehicles?
15 A. Tbat's correct 15 A. Na
16 MR.LINDSAY: Otherthan the-the modular 16 Q. We talked about those. Does the ddrtor own any
17 buildings to the extent thq'Ye considered personal 17 crédit cards?
18 property, which we believe they are. 18 A. Na
19 MR.KINDER: Okay. 19 Q. So it hasnt use crédit cards post pétition?
20 Q. So any personal property that the debtor possesses 20 A. Na j
21 belongs to SMI,is your understanding? 21 Q. Doesnt have any that are outstanding? ■'
22 A. Yes. 22 A. Na
23 Q. And then the lealestate and the modular— 23 Q. Okay. Have ail federal and state tax retums been i
24 modular buildings that the debtor possesses belongs to the 24 filed? :
i
Page 56 Page 57 ,
1 A. Yes. 1 conversation with your attome/s office, it sounds like
2 Q. Okay. Who préparés the taxes ibr the debtor? 2 ifs not as simple as just providing us with an insurance
3 A. In the past we had a CPA who is actually one of 3 certificate. Can you briefly describe the state of your 1
4 the creditors. This past year I did tbem. 4 insurance coverage? j
5 Q. Ok^. Who do you, if - if this case stays in 5 A. Okay. You know, onr Insurance bad — bad lapscd
6 bankruptcy, who do you anticipate preparing the tax retums 6 and l'm — l'm exploiing options, which is rather, gtvcn the
7 in the future? 7 kind of work we da it's — it's not as easy as H, you ;
8 A. We'll bave to contract somebody to do that I 8 know, as a, you know an office type environment Sol'm— i
9 don't have anybody In mind right now. 9 l'm - l'm pursuing that And there's aiso some other
10 Q. Okay. Similarto-to-to other professional 10 issues that may be ticd up in -
11 services befote you contract anybody youll need to talk to 11 MR LINDSAY: The debtor is pursuing potentially
12 your attorney - 12 obtaining its own insurance as it had already done over the
13 A. Correct 13 past year despite the fact thaï it believes ifs — Panthera
14 Q. -and —andgettfaemapproved. The tax records. 14 Training is responsible for that obligation. WeVe, in an
15 are they still in the possession of your previous 15 attempt to provide the U.S. Trustee's office with proof of
16 accountant? 16 insurance, weVe requested that fhnn Panthera Training, and
17 A. Yes, I believe he bas records, and I think we have 17 are still waiting for that
18 them ail, too. 18 MR KINDER; Okay.
19 Q. Ali right 19 Q. ru - ru tell you, and your attorney already
20 A. You know, I possess them as welL 20 knows this, the United States Trustée requires particularly
21 Q. C^y. Has the debtor ever been audited? 21 liability insurance, but ail relevant insurance to be up-to-
22 A. No. 22 date and current, and certificates to be provided.
23 Q. Okay. We talked briefly about insurance. Wehave 23 Encourage you to work on that as quickly as possible.
24 not received any sort of insurance certificate. In a brief 24 A. Yes, sir.
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1 Q. I wouidnt be suiprised if you'll be seeing a
of 37
1 records like that?
2 motion fiom the United States Trustée witii-with that 2 A. Yes.
3 respect, but keep us in the loop on that, let us know,and 3 Q. Okay. And who's the responsibleparty with
4 but we still m^ be filing a motion. 4 respect to maintaining the records?
5 A. Okay. 5 A. lam.
6 Q. Ailright. 6 Q. Okay. Does the debtor have income statements?
7 MR.LINDSAY: Understood. 7 A. Yes.
8 Q. CBcay. Ochtofs books and recotds for the past 8 Q. Balance sheets?
9 thiee yeais. Where have those been maintained? 9 A. Yes.
10 A. Those bave been in-bouse. 10 Q. Cash flow reports?
11 Q. And when you s^ in-house,specificaliy where are 11 A. Yes.
12 they located? 12 Q. And inventory records? To the extent there is
13 A. Well,our accounting system is the Qoud System, 13 inventory?
14 and — and — and virtuaily everything is there 14 A. To the extent there Is, yes.
15 electronically. 15 Q. Okay. InthepastyearweVekindofgotten into
16 Q. Okay. 16 this already,whafs been the compensation level for your —
17 A. Yeab. 17 the officers ofthe business?
18 Q. On the computers in your office? 18 A. It's been - well,from -from the debtor
19 A. Yes. 19 virtuaUy nothing. There isn't anything other than
20 Q. OrtheCloudthat- 20 expenses,some expenses reimbtirsed.
21 A. Yes. Yes. 21 Q. Okay. Have any dividends or bonuses been paid?
22 Q. Okay. 22 A. No.
23 A. Yes. 23 Q. Has the debtor guaranteed any personal debts of
24 Q. Do you anticipate continuing to maintain your 24 the officers?
Page 60 Page 61
1 A. Na 1 outside ofthe ordinaiy course ofbusiness in the past year?
2 Q. Has the debtor made p^inents on any peisonal loans 2 A. Na
3 ofdie ofScers? 3 Q. Okay. Has any property been repossessed in the
4 A. Na 4 past year?
5 Q. Has the debtor made a loan to any paity? 5 A. Na
6 A. Na 6 Q. Past three years?
7 Q. Okay. Other than whafs been documented including 7 A. Yes,therewasatractor. Well,actually that was
8 your p^rment to your attom^,has the debtor made any 8 ~ no,that wasn't the debtor's. Well-
9 payments to any other professionals? 9 Q. Was it a debt —
10 A. Na 10 A. Itwas —
11 Q. Ailright Has the debtor gifted any property in 11 Q. -that the debtor owed?
12 thepastyear? 12 A. No,it was—actually it was Panthera Training
13 A. Na 13 Center.
14 Q. In the past three years? 14 Q. Okay. Has any ofthe debtor's property been
15 A. Na 15 seized?
16 Q. Has the debtor sold any real property in the past 16 A. No.
17 three yeais? 17 Q. Has there been any involuntary attachments to any
18 A. Na 18 property in the past year?
19 Q. Okay. Has there been - Okay,we-we know the 19 MR.LINDSAY: 1 think there was — there was a
20 tiansfer ofthe personal property as part ofthe loan with 20 gamishment Ifto the extent you include that in either of
21 SMI,has there been any other bulk sales of personal 21 those catégories,then it's-
22 property by the debtor in the past three years? 22 MR.KINDER: Yeah.
23 A. No. 23 MR.LINDSAY: -identified on the sub —
24 Q. Okay. Has there been any payments to creditors 24 MR.KINDER: Go ahead, yeah,anything in that
'
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1 nature. of 37 1 MR.LINDSAY: Primarily issues with Panthère
2 MR.LINDSAY: Yes, ifs — ifs a gatnishment by 2 Training.
3 Iron Horse, I believe. 3 MR. KINDER: Okay.
4 MR.KINDER: Okay. And I think thafs- 4 Q. Ail right. As we,your- your counsel alluded
5 A. Tbat was in — yeab, yes. 5 to, there are deadiines that are out there, Mien your ^
6 MR.KINDER: — reflected in your — 6 counsel contacts you about those deadiines, those are «
7 MR.LINDSAY: Yeah,ifs in Part 2,Section — or 7 serions deadiines -
8 No. 3. 8 A. Yes.
9 MR.KINDER: Okay. 9 Q. -dont ignore your counsel,tespond to th«n,get
10 Q. And it does sound like that there is some 10 back with him, because those deadiines do have légal efiëct
11 variables that are ont there, but do you expect to rile a 11 Monthly operating reports are due,theyte due by the 21st *
12 plan? 12 day following the month for Miich youte reporting. Those
13 A. Yes. 13 are something that — diat we will stay on you about.
14 Q. Do you have a sense on when you would expect to 14 Thafs something else that will resuit in motions from our i
15 file a plan? 15 office. Quarterly fees are due. Youllbereceivinga 1
16 A. I tblnk it dépends on some of tbe actions. So l'm 16 invoice from the United States Trustée. Similarly, weti
17 prepared when — 17 file motions in order to collect those ifthose arent paid.
18 MR.LINDSAY: Yeah,our-our-our initial 18 So we would encourage you to respond to those and pay those ]
19 intent is to file it within the original exclusivity period. 19 fees to keep this case moving forward. î
20 but that, obviousiy, if we need to seek an extension we 20 A. Understood.
21 will, but we'd like to move this case as quickly as 21 Q. I believe thafs ail tire questions I have. fm
22 possible. 22 now going to open diis up to creditors. Is there anyone '
23 MR. KINDER: What thing -spécifie variables to 23 that would like to go fiist?
24 you anticipate need to be resolved before you file a plan? 24 MS. ALLEN: I would like to go first.
Page 64 Page 65 i
1 MR. KINDER: Okay. Would you care to identify 1 be redeemed by August — or April 1,2020, is that your
2 yourselfand who you represent and then — 2 undeistanding?
3 MS. ALLEN: Certainly. 3 A. Tbat's my understanding,yes.
4 MR.KINDER: - ask your questions. 4 Q. Okay. Have there been any plans to redeem the >
5 MS. ALLEN: l'm Debra Lee Allen, and l'm with the 5 property?
6 firm ofSpilman, Thomas & Battle, and we represent the West 6 A. Defer to — to bis advise as when do we do tbat
7 Virginia Economie Development Authority. 7 MR.LINDSAY; When? Clearly we have to address it
8 EXAMINATION OF MR.PUNELU 8 before the deadline. So we're in the process ofdetermining
9 BY MS. ALLEN: 9 how to do that. We have no intention ofrelinquishing the
10 Q. Mr. Punelli, we metjust recently out in the 10 property or allowing it to go to someone else,so we'll be
11 hallway. 11 addressing that.
12 A. Yes. 12 MS. ALLEN; So at this point,I mean,the debtor
13 Q. I have a few questions to follow up on the 13 really holds simply a right ofredanptiœi,doesnt really
14 questions from the U.S. Trustee's office. You had,there 14 hold the property.
15 were some questions about property being transferred, your. 15 MR.LINDSAY; Well,debtor holds title.
16 the real estate in this issue, the 2 in this case, Tm 16 Q. The — there were some questions about bank
17 sorry, the 2017 tax liens were sold, or were auctioned by 17 accounts. There was listed in your schedules an Old Line
18 the West Virginia -or by the - Tm sony- Hardy County 18 Bank account?
19 Sherifïs Office in 2018,correct? 19 A. Right
20 A. Correct 20 Q. What- what is that bank account?
21 Q. And my undeistanding is the tax liens have been 21 A. It —itwasjosLithadasmallamoimtofcasb,
22 certified to the state auditoi's office for disposition? 22 and ifs been closed.
23 A. Correct 23 Q. Ifs closed, okay.
24 Q. And they need to- and the property will have to 24 A. We hadn't really used it na
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1 Q. A]l right. And you said there are no other bank 1 - you're asking, but-
2 accounts for the debtor,correct? 2 Q. Well,rmjustcurious how we came upwith this
3 A. Other than what we discussed eariier, no. 3 figure. If it was ail Panthera Training,then I was curious
4 Q. Okay. When ~ when did the insuiance lapse? You 4 about how you came upwith the figure. But now you're '
5 indicated that it had lapsed. When did il lapse? 5 telling me some ofit is other — 1
6 A. In-inAugust 6 A. Right
7 Q. Ofthisyear? 7 Q. - parties.
8 A. Yes. 8 A. Right That's correct
9 Q. And following up on questions related to the 9 Q. Okay. You indicated that you and Raymond Jones
10 accounts receivable,there was listed a $777,000.00 account 10 share responsibillties for the debtor,and that he,Raymond
11 receivable. You indicated that's ail Pantheia Training? 11 Jones,does most ofthe business development and you are
12 A. The —lhenuijorityofit,yes. 12 operational. Is that correct?
13 Q. What amount is not Pantheia Training? 13 A. Yes.
14 A. I would have- have to look at it to give you 14 Q. Okay. Now when you s^ operational, what is it •
15 détails,I don't know the eiact detaîL 15 that you do for Enterprises? \
16 Q. Do you know who the other parties are that money 16 A. Well,you know,at this point you know,we — we
17 isowed? 17 bave — the property had been — bad been leased to Panthera
18 A. Panthera Training Center. 18 Training,so there isn't as much in dealing,in ternis of
19 Q. And how much ofit is Panthera Training Center? 19 dealing witb — with the property or-or training
20 A. I beileve it's around $100,000.00. 20 contracts,there wasn't as much activityto-to do. But-
21 Q. And the figures that are listed,the $777,000.00, 21 - but piimariiy it's accounting,and I do-do some
22 wdiete are those figures documented? 22 business development as welL
23 A. I mean,we bave — have them in our accounting. 23 Q So?
24 you know,documented. l'm not sure whatspecifically you're 24 A. Accounting,admin.
Page 68 Page 69
1 Q. Okay. Do you consider yourselfan employée ofthe 1 Q. What would you — I mean, you have no idea? Isit r
2 debtor? 2 within the last year?
3 A. l'ma —Tm a memberofthe Company,50- 3 A. No,it's further back than that
4 Q. Okay. The appiaisal that you rely on for the 4 Q. Isit2014,2015?
5 value ofthe property,thafs a 2015 appiaisal, correct? 5 A. You know,1 don't wanna say somethlng I don't bave
6 A. Ibelieveso,yes. 6 the exact answer to, but it's — it's, you know,previous to
7 Q. Okay. And that was doneper Access National Bank? 7 the past year. But and -and I believe it's in the-in
8 A, Yes. 8 the — in the area of2016, but I — I don't know the exact
9 Q. And it relied on,I think, a significant increase g dates.
10 in income for the center, or for the fecility, correct? 10 Q. And you say ail - were ail three loans made in
11 A. You know,I — l'm not femiliar witb the 11 2016?
12 methodology that tfaey use. You know,l'm not au appraiser. 12 A. 1 — 1 don't recall exactiy wbert it was over a
13 so I can't get into that 13 periodoftinie.
14 Q. But it also included fumiture,fixtures, and 14 Q. So how many loans were there?
15 other item — and other personal property in that appiaisal. 15 A. 1 — ltold you,tiiere was two or three,!
16 is that your recollection? 16 believe.
17 A. 1 don't recalL 17 Q. And what were those loans for?
18 Q. Could you tell me,SMI, you've talked about SMI, 18 A. They — they loaned us cash.
19 and you have this timber agreement,and you also had a sale 19 Q. Now you indicated that the personal property fiom
20 of personal property to SMI,is this one loan to SMI — fiom 20 -or the debtor's personal prc^rty was ail sold to SMI,
21 SMI or is it two,or multiple? 21 correct?
22 A. There was two or thrce loans. 22 A. Yes,theytooktitletoit
23 Q. Can you tell me the dates ofthe loans? 23 Q. And you- you didnt recall the date, but I have
24 A. I-Idon't have that in front of me,no. 24 a copy ofthe commercial lease that you have with Panthera
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1 Training,and it has attached it an appendix ofalmost 40 37
of 1 MR.LINDSAY: I dont believe so.
2 pages ofPersonal property. So was the personal propeity 2 Q. Was there ever an adjustment made to the lease,
3 sold aftcr the lease or before the lease? 3 because it does include personal propeity?
4 A. 1 betieve at the time ofthe lease ibat became a 4 A. There's no adjustment to the lease, no.
5 point ofcontention because they had a,SMI bad the right to 5 Q. You indicated that you get most ofyour income
6 the title ofit,and — and I don't recaU the exact date 6 from Panthera Training Center. What is it exactiy you do
7 that it was done,thongh. 7 for Panthera-Panthera Training Center?
8 Q. A point ofcontention with whom? 8 A. Well,Panthera Training Center has a few
9 A. I mean,we — we had the lease with Pantfaera 9 contracts,and — and they — and any — any work from
10 Training which inclnded personal property, which is in our 10 Panthera Enterprises,it really flows through Panthera
11 possession. So,you know,SMI,you hnow,claim that,claim 11 Training Center.
12 -claim that You hnow,again,to — 12 Q. Say that again,any work from -
13 MR. LINDSAY: I don't think there's a question 13 A. We-wemanage-Pantfaera Training Center has a
14 that Panthera Training uses the personal property right now. 14 few contracts,also basically manages the contract of
15 and thafs why ifs identified in the lease. Title is not 15 Panthera Enterprises.
16 gonna be identified therein, and ifs certainly not 16 Q. And what does it do to manage the contract for
17 dispositive fix)ni the lease. 1 think thafs a légal issue 17 Panthera Enterprises?
18 that SMI would also probably have an opinion abouL But the 18 A. Well,Panthera,the subcontract that we had with -
19 Personal property is identified in the lease,and Panthera 19 - with Panthera Training was a subcontract between ail the -
20 Training currently uses it. 20 - ail—ali ofour entities,so Panthera Enterprises,
21 MS. ALLEN: Okay. 21 Panthera Training Center,Panthera Worldwide,any
22 Q. But Enterprises, the debtor. dœs not own the 22 subcontract,any task ordera issued. So — so just, you
23 property, correct? 23 know,management of~ oftbose contracts,and ofthat-of
24 A. At this time, no. 24 those opérations.
Page 72 Page 73
1 Q. So ifsjust sending out invoices and - 1 Q. - what schedule it is?
2 A. Program management It's program management and 2 A. This is, what is that,Part 2.
3 so forth, yeah. 3 MR.LINDSAY: Thafs Schedule F.
4 Q. Does Panthera Training Center have any employées? 4 MS.ALLEN: Schedule -
5 A. At thU time, no. 5 MR.LINDSAY: 3.6.
6 Q. So the onlypeopledoinganything with Panthera 6 MS.ALLEN; Schedule F? ^
7 Training Center are you and Raymond Jones,again, correct? 7 MR.LINDSAY; Correct.
8 A. Right Correct 8 MS.ALLEN: E/F. Why is it they are holding a
9 Q. 1 did not see listed in your Schedule D a secured 9 Deed ofTrust and listed as a non-secured creditor?
10 claim for Virginia Héritage Bank, which showed up in our 10 MR LINDSAY: We'd have to get back to you on
11 title work. Was that debl paid ofT? 11 that,l'm sure some analysis was done. >
12 A. It's- 12 Q. So which one is it, again? i
13 Q. Or is it listed as something else? 13 A. 3.6, Atlantic Union Bank.
14 A. There's- there's a debt to ~ there's a debt to 14 Q. Letmesee. And it shows only owed $6,000.00 for ;
15 Access,1 believe. 15 bank fees?
16 Q. Well,the title work that was done for the EDA 16 A. Yes. And tbey're showing —
17 showed that there was a Deed ofTrust from 2014 in favor of 17 Q. I have a Deed ofTrust showing fbr a $500,000.00 j
18 Virginia Héritage Bank. So fm cutious why it doesnt show 18 loan.
19 up? 19 A. Oh,well, yeah,that — that loan has been paid.
20 A. Give me a moment here. That's on -on the 20 Q. Isee. Well,thafs what I was-
21 schedule.Page 2 of9,3.6,Atlantic Union Bank,is a 21 A. Yeah.
22 successor.
22 Q. -asking. '
23 Q. l'm sorry, can you tell me- 23 A. Yeah.
24 A. Atlantic Union Bank. 24 Q. Thafs why. Yeah. ;
<
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1 MS. ALLEN: There were some questions about West 1 have been incurred since 2013 then?
2 Viiçinia taxes. I don't know ifthe U.S. Tnistee's office 2 A. Yes.
3 has known -the West Virginia State Tax Department did file 3 Q. And you said none ofthem have been mcurred in
4 aProofofCIaim. Youhavethat? 4 the last year?
5 MR. KINDER: I imagine we do, but I have not 5 A. Na Na
6 looked at it personaily. 6 Q. There were questions about licenses. lunderstand
7 MS. ALLEN: Okay. Allright. 7 that for the contracts that you have with the govemment
8 MR. KINDER; But that, that should answer most of 8 there's some soit ofa security clearance that you may need.
9 my questions. 9 or other désignation, is that correct?
10 MS. ALLEN: Yes, it — yeah, it does. 10 A. Ifs for Panthera Worldwide.
11 Q. On your list ofunsecured creditors,I know that 11 Q. For Panthera Worldwide?
12 from reading the file in 2013 when you acquired the property 12 A. Yes.
13 there were certain unsecured debts that were assumed by the 13 Q. But Pantiiera Worldwide is not opeiational.
14 d^tor. 14 correct?
15 A. RIghL 15 A. No,it's— No,Panthera Worldwide is, we have a
16 Q. Howmanyofthese unsecured debts are debts that 16 DOD contract It has not task orders performing at this
17 are -that were assumed by the debtor? 17 time,and that-that requires a security clearance.
18 A. On — on here,the only tbing on here woald be the 18 Q. Okay. But not for the contract with the 1
19 West Virginia witbbolding taxes. And — and aiso, part of 19
20 the A.L.L. Construction, which is 3.1. And let's see — 20 A. No.
21 Weil,I — weil,the unsecured. And secured, we did assume 21 Q. Or the.
22 aiso the West Virginia Paving,tbat's secured. Just making 22 A. No.
23 sure tbere's nothing else that- Tbat's, yeab, tbat's alL 23 Q. Okay. Whafs the most number ofcontracts this
24 Q. So ail the rest ofthe debts then are ones that 24 debtor has ever had at one time?
Page 76 Page 77
1 A. Weil,the — most ofthe contracta we have are — 1 liccnse agreement with Panthera Training,and I don't wanna
2 are not long tenn,they're-the^re more ad hoc,and most 2 take this aw^fiom Mr. Kahle ifwas gonna ask it, but l'm
3 ofthem perform under Panthera Trainii^ Center. So Panthera 3 curious, what is this license agreement, what are you
4 Enterprises has had maybe two or three at any given time. 4 refèrring to?
5 Q. And how nuich income does the 5 A. You wanna cbaracterize tbat?
6 générale? 6 MR. LINDSAY: Ifs reallyjust related to certain.
7 A. Ifs in the neighborhood ofabout 1.7 million. 7 I would say,I believe like domain names,and use of^ I
8 Q. Thafs the revenue? 8 mean,I think it includes email addresses and things ofthat
9 A. Yes. 9 nature. So. m other words there are —
10 Q. And do you have a figure for what the net profit 10 A. Advertising.
11 ts on that? 11 MR.LINDSAY: Yeah. TheyYe able to use those.
12 A. Weil,1 mean,that's gonna dépend on going forward 12 MS. ALLEN: So I -1 have read in a-an
13 on what bappens with some of our actions. So- 13 agreement,and I-1 cail it an agreement ofassignment
14 Q. And there are no othcr contracts other than the 14 where everything was assigned to Panthera Training. Is that
15 and the two contracts right now,correct? 15 what you're refeiting to, is that the agreement?
16 A. Correct Weli,l mean,tfaose are the—those are 16 MR.LINDSAY: No. Weil,actualty is that the —
17 kmg term contracts. Tbere's — tfaere's other tfaings that 17 A. Na Na
18 the trainii^ center — commercial — commercial contracts 18 MR.LINDSAY: Letmesee.
19 and — and other govcmment trainlng that bappens, but it's. 19 MS. ALLEN: Is there something else documented?
20 as I said, it's — it's more ad hoc,and It's relatively 20 MR.LINDSAY: That is, I believe that is the
21 signiticant but — but not long term contracts. A lot of 21 agreement. And what that agreement covers, more than just
22 the items that we considered to have been licensed to
22 the training tbat's donc is done, you know, b donc for-
23 for short term requirements,deployments,and so fortb. 23 Panthera Training,that Ijust mentioned, it includes-it
24 Q. On the executoiy contracts, you had listed a 24 - it puiports to be an assignment ofcontracts which the
20 (Pages 74 to 77)
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1 govemment thereafter told the debtor it could not do,so 1 MR. LINDSAY: bi v^ch case, maybe that is.
2 that portion is essentialiy null and votd, but we wculd, I 2 Q. So there was no cash given for the agreement when
3 guess,agree that die portions that involve things that we 3 it was signed?
4 could have assigned,like the domain names and things of 4 A. No. No.
5 that nature, ifs probably still efiècdve. So 1 believe 5 MR.LINDSAY: It sounds like the answer to your
6 that is the agieement that — that youïe looking at. 6 question islikely yes, but we can confîrm that. Your
7 Q. And the subcontract, I know we talked about that 7 original question widi regard to wdiether or not it satisfied
8 forjust a few minutes whh Panthera Training,that 8 a debt.
9 contenqilates doing the training on the fecility, correct? 9 Q. Okay. Go to Schedule H. Schedule H is a request
10 A. Yes. 10 for co-debtors, and co-debtors is to include guarantors.
11 Q. Okay. The timb«-agieement, what date was- 11 And Pm curious why the guarantors on the West Virginia EDA
12 Well, actualiy I have a copy ofthat,I take that back. The 12 loan are not listed? And Pm aiso wondering ifthere are
13 timber agieement,I understood that was an agreement that 13 not guarantors on some ofthese other loans? j
14 was given for payment ofa debt to SMI, is that correct? 14 MR.LINDSAY: So whafs your question? ^
15 A. Mark,can you characterize that,1 mean - 15 Q. Why is Global Matrix not listed as a co-debtor on
16 MR,LINDSAY: I dont- Actualiy, 1 cant answer 16 Schedule H?
17 that. 1 dont know diat it was given to satisfy a debt. 17 MR. LINDSAY: Do you believe them to be a co-
18 Itn happy to follow up and iHovide a better answer, but 1 18 debtor?
19 dont-1 dont know at this time ifthafs tiue. 19 A. Wheo we originally si^ed that mor^ge,they —
20 Q. Well,the agreement recites that ifs given for 20 they're- yeah,they were on there as a guarantor,I
21 $100,000.00 considération. Did you-did you or the did 21 believe.
22 the debtor leceive $100,000.00 for that agieement? 22 MR. LINDSAY: Okay.
23 A. No,it was-that may have been — that may bave 23 Q. And could you tell us who is Global Matrix?
24 been refening to a previous loan. 24 A. That's — that's Ray Jones. 4
l
Page 80 Page 81
1 Q. He is the sole owner, do you know? 1 A. Yes.
2 A. I — I don't know,I believe sa 2 Q. And tfaen both you and Mr.Jones perscnally are 1
3 Q. And wdiat does it do? 3 guarantors on the EDA loan, and youYe not listed either.
4 A. It's just lihe a professional services company of 4 A. Okay.
5 his. 5 Q. Are you guarantors on any ofthe other debt thafs
6 Q. Does it provide any services to the debtor? 6 been listed in the-in the schedules?
7 A. Na I mean,originally it was contemplated that 7 A. For AzadianandMidtown.
8 It was holding the — the ownersbip. 8 Q. Are you a guarantor ofanyofthe SMI loans? i
9 Q. But it dœsnt hold any ownership now? 9 A. I -1 do not believe sa
10 A. Na
10 Q. Are you a co-obligor -1 mean,are you a borrow
11 Q. Okay. And you said it does not provide any 11 with SMI on the SMI loan?
12 services to the debtor? 12 A. I — I wonld have to look at the documents,but 1
13 don't-
13 A. Na No.
14 MR.LINDSAY; Well file an Amended Schedule H.
14 Q. Okay. Thertfsalso a company called Pons Milvius?
15 Clearly.
15 A. Yes,and that was — that was my person services
16 company,if you will. But again,that was — weil. 16 Q. What is the status ofthelitigation with Azadian
17 Group?
17 conceived,I guess to be simQar to Global Matrix to be a
18 A. It's — it's been taken ofT the docket
18 co- — you know,be the owner,but does not own — doesn't
19 Q. Becauseofthebankruptcy?
19 own stock now, but yes,just,I guess just a vestige of-
20 MR.LINDSAY: Ifsstayed.
20 MR.LINDSAY: What is it a guarantor of?
21 A. Ifs stayed, yeah.
21 A. Well,of the mor^agc. I-
22 Q. <%ay. And you indicated all the books and records
22 Q. Does it provide any services to the debtor?
23 are with, ofthe dditor,are with-are on the Cloud,and
23 A. No.
24 that you and-
24 Q. And you are the sole member?
21 (Pages 78 to 81)
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1 A, Right 1 MR.KAHLE: Sure. Douglas KahIe,law firm.
2 Q. - Raymond Jones control those, is that correct? 2 Basnight,Kinser, présent Panthera Training,LLC.
3 A. Yes. Yes. 3 EXAMJNATION OF MR PUNELLI
4 Q. And no one else has reviewed those within the past 4 BY MRKAHLE:
5 couple ofyears? 5 Q. I wanna followupfirst on a few questions Ms.
6 A. That's — that's correct. 6 Allen asked yoa. Panthera Training Center,LLC,you
7 Q. Okay. 1 think I may not have anything else,just 7 testified that it mandes contracts for Enterprises,is that
8 a second. 8 right?
9 MS. ALLEN: Okay. I dont have anything else 9 A. That — that's what it's donc in the past, yes.
10 right now. Thanks. 10 Q. So lefs talk about since June 1 of2018. What
11 MR.KINDER: Okay. Ycu want — you wanna go next? 11 has Panthera Training Center done to manage contracts for
12 MR.LEON; I would, yeah. Mind ifI swap seats 12 Enterprises?
13 withyou? 13 A. Well,you know,we have three longer term
14 MS. ALLEN: Yes,thafs fine. I mean,I dont 14 contracts,and there's been other business development work
15 mind. 15 that we've done. So I don't know that I wanna get into any
16 MR.LEON: Ifyou wanna do that. Thankyou. 16 great détail at this point with, you know,dtscussing that.
17 MRKAHLE; ni go next. 17 Q. Well-
18 MR KINDER: You - you'd rather. Well — 18 MR.UNDSAY: I think thafs—
19 MR.KAHLE: Is it — let me go ahead, if you dont 19 Q. - you testified that-that it mandes contracts
20 mind. 20 for Enterprises. I think ifs fair to know what it does to
21 MR.LEON: Sure, fm sony. 21 manage contracts starting fiom June 1 oflast year.
22 MR.KAHLE: But have a seat 22 MR UNDSAY: But thafs to oversee the contracts.
23 MR.KINDER: Would you identify yourselfand wiio 23 I think thafs what he says, they are a parly to the
24 you represent? 24 contract, they — they oversee them.
Page 84 Page 85
1 Q. Se what do — what has Panthera Training Center 1 Q. Has Panthera Training Center made phone calls to
2 done to oversee its contracts since June 1 oflast year. 2 clients to help manage contracts perfotmed at the ^ilify
3 it^ done nodiing, has it? 3 since June 1 oflast yeai?
4 A. Yoa know,given the- 4 A I know that Ray Jones bas been involved, and -
5 MR.UNDSAY: What^ the relevance ofthat 5 and worked with Panthera training people on not only
6 question? 6 business development but on contract Issues. 1 can'tspeak
7 MR.KAHLE: Well,his testimony was tojustily 7 for him what was done.
8 what Panthera Trainlng's eaming were. I think it got to 8 Q. So-
9 how he and Mr.Jones have received income fiom Panthera 9 A He — he's done a lot of that b the past.
10 Training Center. rht trying to understand how it fits in 10 Q. Okay. So-so he as cpposed to you would be the
11 the picture. What-what does it do to manage contracts or 11 person who cculd answer that question?
12 to service contracts which in tum justifies money coming 12 A He — he's tnalnly the one who's — who's done that
13 out to Mr.Jones and Mr. Punelli. I think ifs a fair 13 work, yes.
14 question, fm following up on his testimony to claril^ what 14 Q. Okay. Do you, Jim Punelli, have ai^knowledge as
15 it does to manage contracts since June 1 oflast year to 15 to actual services ptovided or management services provided
16 generate it getting money. 16 by Panthera Trainii^ Center in connection with contracts
17 MR.UNDSAY: Ifs —ifsapartytothose 17 since June 1 of20I8?
18 contracts. 18 A As 1 said,Ray was the one who's been working with
19 MR.KAHLE: But-but he- 19 Panthera Training, and with, you know,with any customer as
20 MR.UNDSAY: I think that^ what he testified to. 20 well as a lot ofthe business development So I—Ican't
21 MR.KAHLE: Well, no,he testified that it manages 21 speak to it directiy right cow,no.
22 the contracts, you testified that he-it services the 22 Q. Okay. You-you-you testified in responseto
23 contracts. l'mjustasking what does that consistof. Let 23 questions fi-om Ms. Allen, talked about the _ contract, and
24 me be spécifie. 24 I believe you testified that for 2019 there'd been 1.7
22 (Pages 82 to 85)
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1 profitable or are you projecting into the future?
2 A. No. 2 A. For tbis year. For-
3 Q. — approximately — 3 Q. Okay.
4 A- No.
4 A. So it would be profitable this year.
5 Q. -fiom that contract? 5 Q. Lefs talk about not going forward,year-to-date.
6 A. No, tbat's oot wbat I said. Sbe asked what- 6 has-has .contract generated profit to Enterprises?
7 Q. Okay. Whafs you say? 7 A. WclJ,okay,given that what the question was
8 A. She asked wbat the eipected annual revenue would 8 Panthera Enterprises,the debtor,okay-
9 be,and I said it woold In the range of about 1.7 million. 9 Q. Okay.
10 Q. Okay. Looking back at the schedule,I believe you 10 A- -and 1 said yes,there-theie would be a
11 reported, approximately, 1.7 million dollars ofrevenue for 11 profit
12 2019, year-to-date. 12 Q. Okay. Outofthe i contract?
13 A. Yes. 13 A. You know,I didn't-1 did not- You asked me
14 Q. Okay. And that was from the i contract, right? 14 what Ispoke to,I did uot speak to the spécifie contracts.
15 A. And — and rents money. Rent,contract and rent, 15 I talked about the-the Enterprise as a whole,and tbat's
16 yes. 16 kind of where l'm gonna go right now bccause I haven't you
17 Q. From the fecility? 17 know,1 haven't put together the plan, we're working on
18 A. Rlght 18 that and -and tbat's ail a part ofthat
19 Q. Okay. Nowyoutestifiedthat-thateither 19 Q. Okay. Well,I may have misunderstood, but there
20 Enterprises or the contract was profitable. Do you 20 was testimony about the contract. Tobeclear,a
21 recall that testimony? 21
hundred percent of your revenue that comes in on the i
22 A. I said I believe Enterprises would be profitable 22 contract pursuant to the subcontract is to be paid
23 this year. 23 immedrately over to Panthera Training, correct?
24 Q. Ail right. Now is that — is that year-to-date 24 MR. UNDSAY: Well,you're asking-l'm just
Page 88 Page 89
■
1 gonna mstruct him net to answer. These are contractual 1 contract?
2 interpietation issues. 2 MR LINDSAY: He's not gonna answer any questions
3 MR.KAHLE: TheyVe—theyre related — 3 about the subcontract-
4 MR.LINDSAY: They have nothing to do with the 4 MR.KAHLE: Okay.
5 schedules. 5 MR LINDSAY: — put it that way.
6 MR.KAHLE: Well, it has to do with the questions 6 MR KAHLE: Okcy. <
7 he's testified - 7 Q. You testified in response to Ms. Allen's questions i
8 MR.LINDSAY: IVe already told him that he's not 8 about the $777,000.00 ofaccoimts receivable,I believe you !
9 — he doesnt have to answer that 9 said about$100,000.00 ofthat was from some — well. it was r'
10 MR.KAHLE: Soyou- 10 from Panthera Training Center,correct?
11 MR.LINDSAY: Soyou- 11 A. Tbat's what I told her, yes.
12 MR.KAHLE: To-to- 12 Q. And am I right that Panthera Training is an 80
13 MR.LINDSAY: -can seek an answer to that 13 percent subsidiary of-ofEnterprises?
14 somewhere else. 14 A. That's correct i;
15 MR.KAHLE: -to-to what extent? Se are you 15 Q. And — and operationally you and Ray Jones ^
16 directing him not to testify about any questions about the 16 basically run both compantes yourselves?
17 _ .contract? 17 A. That's correct
18 MR.LINDSAY: I dont know, you'd have to ask him 18 Q. Is there any operational independence between the ^
19 first 19 two companies?
20 MR.KAHLE: Okay. 20 A. Well, yes,tbere's contractiodependence and
21 Q. The youte&miliar with the contract? 21 operational independence, yes.
22 A. Yes. 22 Q. Okay. The six hundred and some odd thousand
23 Q. And are you familiar with the subcontract whereby 23 dollars left over ofthe accounts receivables that you say ^
24 Panthera Training performs all the services for the 24 Panthera Training owes,did you personally calculate that
23 (Pages 86 to 89)
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1 numbei? 1 A. l'm not gonna spesk to approximate tbings.
2 A. Yes. 2 Espedally since, you know, you have the information anyway.
3 Q. And whafs the niimber conpised oi? 3 So-
4 A. WetI,I don't know tbat I really wanna get iato at 4 Q. Se do you have the catégories that conqnise that
5 tbis time becaose it iavolves some otber tbings tbat are 5 number?
6 ongoiDg. 6 A. Well,there's — tfaere's taxes,rents,insuranoe.
7 Q. Well, ifs in the schedule. 7 Q. Wbat kind ofrents?
8 A. Well,I understand tbat 8 A. There's additional rents tbat are under the lease.
9 Q. Doyou-doyou- 9 Q. And again, did you calculate that numbei?
10 A. I mean,it's — it's comprised of money — monies 10 A. I did.
11 owed,I mean,rents and — 11 Q. Okay. Ray Jones didnt?
12 MR.LINDSAY: Your client bas a — bas an itemized 12 A. Well, he — he W8S involved with going throttgb it
13 list oftbose amounts owed. 13 with me, yes.
14 MR.KAHLE: I understand, but be's under oatb 14 Q. You gave an address for Panthera Enteiprises being
15 today. 15 Fisb Pond Road. When's the last tiiiie Enterprises had any
16 Q. So-so tbat six bundied and some tbousand- 16 employées located there?
17 MR.LINDSAY; 1 don't tbink he bas it in fiont of 17 A. It would be last year.
18 bim. 18 Q. Say again?
19 Q. But do you know wfaat tbat six bundred and some 19 A. Last year.
20 tbousand dollars is comprised o^ Mr.Punelli? 20 Q. Say June I of2018?
21 A. 1,again,1 don't bave tbe exact breakdown in 21 A. Yeah, right
22 front of me. 22 Q. Wheris the last time Enteiprises had ai^
23 Q. Have you got the approximate breakdown in your 23 représentatives located there? Same date?
24 mind? 24 A. It'd be at the same time, yes,the faclllty —
Page 92 Page 93
1 Q. So- 1 Q. Se you dont perfoim any- any business there?
2 A. — bas been leased to Pantbera Training. 2 A. Yes,weda
3 Q. — wben's the last time tbat Enteiprises or 3 Q. Okay. What-what business does Enterprises
4 Pantbera Training Center perfoimed any iimctions in Fisb 4 perfoim there?
5 Pond Road in Har^ County,same date? 5 A. We bave contracts tbat arc pcrfonncd tbcrc.
6 A. No. 1 mean,we bave contracts tbat we bold. 6 Q. But not by you?
7 Q. Therearcno- 7 A. Tbcy're subcontract-
8 A. Tbere were subcontract — tbe- 8 MR.LINDSAY: By Mr. Punelli bimself?
9 Q. Well. wben's the last time tbat Pandiera Training 9 MR.KAHLE: By Enterprises.
10 Center or Pantbera Enterprises itself performed any 10 MR.LINDSAY: Oh.
11 iùnctions? 11 Q. Enterprises doesnt perfoim aiQT contracts at tbat
12 MR. LINDSAY: Can I ask you a question quick? 12 location and hasnt since June 1 oflast year,correct?
13 MR. KAHLE: Sure. 13 A. Well — well,I don't know. I mean,I gucss —
14 MR. LINDSAY: IfI were to look at tbe scbedules 14 MR.LINDSAY: Thafs-
15 and bis statement offinancial aflàirs, wiiat would tbese 15 A. — It dépends bow you wanna —
16 questions relate to? 16 MR.LINDSAY: Yeah.you dont have to answer tbat.
17 MR. KAHLE: Well, it relates to why be's telling 17 Ifs-ifs—you're asking a légal question, whetber or
18 tbe court, or the Trustée, tbat it bas an address at Fisb 18 not a primaiy contractor performs a contract by a
19 Pond Road. l'mtiyingtofind ont whatits connection with 19 subcontract contracting it, whafs your answer to that
20 is tbere otber tban ownersbip. 20 question?
21 MR. LINDSAY: I dont tbink tiiere is -tbafs- 21 Q. And you tbink thafâ a légal question, Mr.
22 tbat is a-the address ofapiece ofproperly tbey own. 22 Patelli?
23 Is tbat wbat youte asking? 23 A. l'mnotalawyer.
24 MR.KAHLE: Okay. 24 MR.LINDSAY: Yes, it is.
24 (Pages 90 to 93)
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of 37
1 Jones for that money?
2 Q. You — you testified, this is back to questions 2 A. Well, business devetopment and — and so fortb.
3 the Trustée asked you,that — that you and \fr. Jones werc 3 and you know,I was — I was oveneas for most oflast year.
4
drawingincomefiDmPantheraTrainingCenter. Howmuch? 4 So, you know — so,you know,l'm not — I don't know.
5 A. I don't bave the figures right in front of me. 5 MR.LINDSAY: Well,I mean,he — I think he's
6 Q. Approximately? 6 answered the question.
7 A. Again,I don't bave the numbers right In front of 7 MR.KAHLE; Hedid.
8 me,and — and I don't how that relates to the schednle. 8 MR.LINDSAY: Theyie — theyre members ofthe
9 Q. Well ~ well, you testified in tesponse to the 9 LLC and they perform services.
10 Trustee's questions N^en he asked you about it, where your 10 MR. KAHLE: Okay.
11 income is coming from,you testified it came from Panthera 11 Q. And that. did that money corne to you or Mr. Jones
12 Training Center. I think it's a feir question, how much. 12 out ofthe Panthera Training Center bank account or out of
13 $1.00,$100,000.00? Ijust want-1 think the creditors 13 Enterprises bank account?
14 are entitled to know how much money you and Mr. Jones are 14 A. 1 — I don't bave that,1 don't bave that in front
15 pulling out ofthe 80 percent subsidiary ofEnterprises, and 15 ofme.
16 you don't— Doyouhaveanapproximatenumber? In the 16 Q. How —how did you and Mr. Jones receive that
17 last 12 months? 17 $70,000.00 each?
18 A. The last 12 months, maybe seventy,around 18 A. I — 1 don't have the exact detaUs in fnmt of
19 $70,000.00 each,somewhere in that neighborbood. 19 me, which account itcameontofor—
20 Q. How- how much,seven or seventy? 20 Q. Did-
21 A. Seventy. $70,000.00. 21 A. And I don't know — I don't know where —
22 Q. And-and- 22 Q. Are you saying you don't know the source of
23 A. Somewhere in that neighborhood. 23 $70,000.00 that you and Mr.Jones each received over the
24 Q. And what services were provided by you or Mr. 24 past 12 months?
Page 96 Page 97
1 MR. LINDSAY: I think what he's saying is he cant 1 amount ofmonies received and the source ofthose,of- of
2 testify to it with having the exact information in front of 2 — ofthe two owners ofthe business, fiom either Panthera
3 him. He's not going to say something that might possibly be 3 or their majority owned subsidiaries that-that we can
4 incorrect. So~ 4 share with creditors that-
5 Q. To-to pick in the time frame, you were 5 MR.LINDSAY: Yeah,and going back,I believe the
6 testifying you believe that you and Mr. Jones each received 6 U.S. Trustee's Office has asked for those bank statements —
7 $70,000.00 compensation from Panthera Traiiting Center, t^t 7 MR.KINDER: Yeah.
8 would be the time frame during which each ofyou received 8 MR.LINDSAY: -and we've agreed to provide them.
9 about $70,000.00? 9 MR.KINDER: Yeah. Now I — I dont know that —
10 A. Well, you asked me over the past year. 10 that we can share the- we —
11 Q. So to be clear, the past 12 months fiom - 11 MR.LINDSAY: I-1 understand that you-
12 A. And- 12 MR.KINDER: — can push for you to share the fiill
13 Q. - October? 13 bank statement —
14 A. And again — Yeah. And again, l'm — l'm — I 14 MR.LINDSAY: -cant share them withoutour-
15 don't have the information in front of me. You know,l'm 15 our consent.
16 under oath,l'm not — it's in that neighborhood, 1 can't 16 MR.KINDER: Birt- but Ifyou're willing to
17 tell you the exact amount 17 consent for us to share the bank statements, we're happy to
18 MR. KINDER: Let me-there may be a more 18 do that, but I think that at the vety least we would ask
19 efficient way to do this. I do tiiink tiiat ifs relevant to 19 that we be able to share tire amount of money the insiders
20 under-for creditors to understand- 20 received with ail-with any creditors that-
21 A. Right 21 MR.KAHLE: And the source ofthe payments? If
22 MR. KINDER: - how much insiders receive. fm 22 not, you can -you can white out the bank détail
23 going to ask for varions things. This is one thing that I 23 information, but to know where'd the monQr corne fipoia
24 think it would be good, if you — if you could clarify the 24 MR.KINDER: Well,I think even a summary that
25 (Pages 94 to 97)
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1 they préparé thatjust shows that they-that thqr verify 1 that?
2 that shows the source ofthe payments and the amount of 2 MR. KINDER: How soon do you think you can do it?
3 ps^ments to — to insiders fiom either the debtor or 3 A. Reiatively soou 1 can get that to bim - !
4 subsidiaries ofthe-ofthe debtor. 4 MR.LINDSAY: We'11 get them in the next 10 days. ^
5 MR.LINDSAY: Well, ifI could ask this, once I 5 MR.KINDER: Ten days, okay,that sounds good.
6 see them and — and you see them,and you could confer — 6 Q. To follow up some questions fiirther that I believe i
7 MR.KINDER: Yeah. 7 the Trustée and Ms. Allen asked about. The personal
8 MR.LINDSAY; - and décidé how-how- v^dtafs 8 property, Mr. — Mr. Punelli, 1 think youH recall some i
9 fair to how to présent them. 9 dates when I refresh your recollection, do you recail the
10 MR. KINDER: Right. 10 commercial lease for the property was signed back as ofJune
11 MR.LINDSAY: Okay. 11 1 of2018?
12 MR.KINDER: That — thafd be fine. l'm -1 do 12 A. Yes.
i
13 expect- was expecting to do this anyway. lYn leaving the 13 Q. And Ibelieve you testified that therewere some
14 —the record open on this Meeting ofCreditois so that if 14 schedules, acknowledged some scheduled that referenced
15 that would inspire questions by creditors we may bave to 15 Personal property, and it wasn't until June 18 of2018 wdren
16 reconvene if— ifthat doesnt answer it. Now the scope of 16 Enterprise assigned a Bill ofSale selling ail the personal
17 the- 17 property to this SMI Group, COTrect?
18 MR.LINDSAY: Mm-hmm. 18 A. And to the extent that- yeah,that-that date
19 MR.KINDER: — would be limited to — to the new 19 may be correct, I don't bave it in front of me,but- but
20 information, but it may answer the question, we wouidnt 20 it goes back to some préviens agreements witb SMI,so l'm
21 need to, but l'm not gonna officially close the -the 21 not gonna characterlze tbat because it's a légal issue and I
22 record on this until we see those. Isthat&ir? Does that 22 — I can't answer it :
23 short circuit some that questioning? 23 Q. But-but do you recall the sequenceofevents
24 MR.KAHLE: Yes,sir. Do you have a time fiante on 24 that the lease was signed first and then -then within a-
Page 100 Page 101
1 A. That- 1 MR.KAHLE: You haven't left-
2 Q. -couple weeksailer that a Bill ofSale was 2 MR.LINDSAY: Because that's -thafs-
3 signed- 3 MR.KAHLE: You bavent lefi much,have you?
4 A. Ibelieve— 4 Q. Give me one more minute here. Oh,in your list of
5 Q. -as to the Personal prcperty? 5 unsecured creditors,I see that you dont have Panthera
6 A. I believe that is correct, yes. 6 Training listed. Are you familiar with the-the
7 Q. Andtounderstand,how—howdidEnterpiise 7 gamishment back in June when $103,000.00 that came into
8 anticipate that Panthera Training was gonna conduct business 8 Enterprises was not forwatded to Panthera Training?
9 ifit sotd al! the peisona! propeity located on the 9 A. Well,that — that — that amount — well,we were
10 equipment to a thiid paity? 10 paying that tfarough — throngh Training Center, but it was
11 A. Well,again,that transaction b — is tied up 11 paid, you know,subsequently in August In the August
12 with other previous agreements and previois to the lease of 12 training that was done,I believe that was short pahL So
13 wfaich, you know,Panthera Training was — was made aware of 13 yeah,Panthera-Panthera Training Cfenter I believe paid
14 bcfore the least was signed. So,1 mean,it was — it was a 14 that in August,yeah.
15 matter that was discussed. 15 Q. So — so your testimonyis the $103.000.00 that
16 Q. Withwho? 16 was giabbed by gamishment was later paid by Enterprises to
17 A. Whb Panthera Training, and — and aiso, you know. 17 Training?
18 the fact that the — the property b still located at the 18 A. Andisn'tit—
19 facility,stOl being used for—for training. I think it 19 MR.LINDSAY: We'ie not awaie ofa $103,000.00
20 speakstothat 20 gamishment. I believe we'rc awaie ofa $97,000.00-
21 MR.LINDSAY: I know you possibly wont be happy 21 $97,782.00 by lion Horse,is that what you'ie lefening to?
22 about thb, but to the extent yoifre gonna ask questions 22 MR.KAHLE: Yeah,lefs cal! it, approximately.
23 regaiding the lease, and which b clearly subject of 23 $100,000.00to make it easy.
24 dispute, he's not gonna answer those questions ehter today. 24 Q. So—sothere was about $100,000.00 gtsbbed in a
26 (Pages 98 to 101)
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1 gamishment in June of2019.correct? of 37 1 MR. KAHLE: M just trying to tiack down that
2 A. Thafs correct 2 gamished money as to ftnd out what happened with it.
3 Q. Okay. And that, whateverthat dollar amount is, 3 MR. LINDSAY: Well, the money- money that was
4 approximately,$100,000.00,that was payable to Training 4 gamished, it went to Iron Horse. ;
5 back at the time by Enteiprises, correct? 5 MR.KAHLE: Allright. And so, that note-
6 A. Net by — yesb, by — by Panthera Training Center, 6 MR.LINDSAY: So that, there's no way that
7 yeah. 7 particular money could be paid to anyone, it was taken by i
8 Q. Okay. But that wasn't done, was it? 8 Iron Horse,correct. ^
9 A. I said it was sabsequently paid m Augost 9 Q. And that money that was grabbedby Iron Horse,the
10 Q. Oh,rmsony. So- 10 équivalent ofthat money,$100,000.00 that — that was taken i
11 A. And — 11 by Iron Horse, that amount was,and no later amount
12 Q. Yeah, you did say that, I misunderstood. Soyour 12 replacing that was ever forwarded on to Panthera Training,
13 testimony then is in August of2019 Panthera Enterprises or 13 correct?
14 Panthera Training Center paid that $100,000.00 down to 14 MR. LINDSAY: And ail Pm saying is to the extent
15 Panthera Training? 15 that we have disputes as to what is owned and what is not
16 A. FroinJune,rigbt And then tberc was a payable— 16 owed under the subcontract, as Pve said on the record, !
17 there was a payable in Augost then that was not paid on 17 we're not gonna answer those questions. Obviously, any
18 time. So we- we — we paid the oid payable,and there was 18 creditor is free to file a ProofofClaim ifth^'dont
19 a new payable. 19 agree with the schedules.
20 Q. But the payable in August,that was for a separate 20 Q. Duncan Development Croup,Rob Duncan is at least a \
21 course, correct? 21 part owner ofthat company?
-j
22 A. WelItOkay. 22 A. Yes.
23 MR. LINDSAY: Are you-are you asking about 23 Q. And does Rob Duncan, he atone time had options to !
24 amounts that potentially could be due under the subcontract? 24 buy into Panthera Enterprises, correct?
Page 104 Page 105
1 A. Yes. 1 MR. KAHLE: Okay. j
2 Q. Are those options still outstanding? 2 MR. LINDSAY: So I guess the govemment told him :
3 A. That's — that's a question that we have to look 3 that.
4 at tbe agreement,and I-1 don't know. 4 MR.KAHLE: Ok^. ]
5 MR.LINDSAY: M not sure that he can answer 5 MR.LINDSAY: Iassumeyou'retalking-you- ;
6 that. Tm not trying to be obstinate, thafs truly a -1 6 you- you referenced,just so we're clear on the record.
7 don't know that he can answer that question yes or no at 7 you - you called it a novation agreement?
8 this point. Thafs a contractual issue. 8 MR.KAHLE: Correct. j
9 Q. Whatever options Mr. Duncan has or had, have you. 9 MR.LINDSAY: Thafs not the title ofthe ^
10 I mean,do you have possession of documents that memorialize 10 agreement, is it? If-1 wanna make sure we^re talking
11 that agreement? 11 about the same agreement
12 A. Yes. 12 MR. KAHLE: I believe it is called that.
13 Q. Under the Executory Contracts heading,are you 13 MR.KINDER: Let me clarify, ask a clarifying-
14 familiar with a Novem — l'm sorry—with a December of 14 when you say the goverrunent, is that the govemment as a
15 2018 novation agreement that was signed ly Panthera 15 customer or is that the govemment as a regulating entity.
16 Enterprises? 16 A. As a customer.
17 A. Yeah,there was an agreement that was rejected by 17 MR.KINDER: As a customer,okay.
18 the govemment 18 A. Contracting office, yeah.
19 Q. Inwriting? 19 MR. KINDER: Okay.
20 A. Yes. 20 MR.LINDSAY: What was — what was the date ofthe
21 Q. Who told you thaf? 21 agreement that you referenced?
22 A. Do we have a reference? 22 MR.KAHLE: I think it was dated a couple
23 MR.LINDSAY: Ifs a-ifs a-ifs a 23 différent times,the-the latest version may have been
24 correspondence from the govemment. 24 dated M^ of2019.
27 (Pages 102 to 105)
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1 MR.UNDSAY: And you believe ifs called a 1 A. Correct
2 novation agreement? 2 Q. YouVe — you're the only two members ofthat LLC?
3 MR.KAHLE: I seem to recall that. 3 A. Thafs correct
4 MR.LINDSAY: Okay. 4 Q. IsitamembermanagedLLC?
5 Q. So-so it is your testimony, Mr. Punelli, that 5 A. Vcs.
6 that,assuming it was dated May 2019,1 believe ifs titled 6 Q. Okay. Do you have a writtenoperating agreement?
7 a novation agreement, you believe you bave coirespondence 7 A. Ves.
8 from the govenunent that officially rejected that novation 8 Q. Okay. And your cuirent address is listed in,lYfi
9 agreement? 9 gonna say Virginia?
10 A. Ves. 10 A. Right
11 Q. Okay. 11 Q. Is that a résidence address that I see in these ;
12 MR.KAHLE: No more questions. 12 schedules?
13 MR.KINDER: Okay. 13 A. Thafs the — thafs an office address, mailing
14 EXAMINATION OF MR.PUNELLI 14 address.
15 BY MR.LEON: 15 Q. Okay. Where do you live?
16 Q. Mr. Punelli, we met briefly earlier. Mynameis 16 A. Live in Virginia.
17 Léon,and I repiesent SMI and Bill NeffEnterprises. 17 Q. Okay. Whafs your physical address in Virginia?
18 fm gonna ask you a few questionsjust to orient nq^lf 18 MR.LINDSAY: You don*! have to answer that <
19 here. IknowyouVecoveredmostofthis- 19 MR.LEON: Okay. ;
20 A. Sure. 20 Q. How about Mr. Jones, where does he live?
21 Q. -earlier. You and Mr.Jones own the debtor. 21 A. He lives in Virginia.
22 correct? 22 Q. Ok^. And Panthera Training, LLC,whoowns that? j
23 A. Yes. 23 A. 1 — I believe ifs Bob Star,Robert Star.
24 Q. And thafs Panthera Enterprises, LLC? 24 MR.LINDSAY: You — he — I mean,you dont have j
Page 108 Page 109
1 to answer that either, thafs not a related entity, thafs a 1 A. Correct
2 tenant 2 Q. — ammunition,tmcks, do you agree with that?
3 MR.LEON: Well, youYe suing them. 3 A. Right correct
4 MR.LINDSAY: Right 4 Q. Okay. And Panthera Training is using aU that
5 MR. LEON: Okay. 5 stufftoruntheir business? Yes?
6 Q. And you dont have, you personally do not have an 6 A. That — thafs correct
7 ownership interest in Panthera Training? 7 Q. Okay. Is SMI getting paid for the use ofits
8 A. That is correct 8 equipment? '
9 Q. Not does Mr. Jones? 9 A. Thafs somethlng I don't — l'm not aware of?
10 A. That's correct 10 Q. Well, are you- is ~ 5
11 Q. IDoes Panthera Enterprises have an interest in 11 A. We are not —
12 Panthera Training? 12 Q. — the debtor paying it?
13 A. No. 13 A. We are not paying, no, we are not paying that
14 Q. Okay. So itjust shares a name? 14 Q. So is it yow* positirm that — that Panthera
15 A. Correct 15 Training has some right to use this equipment? Or thafs
16 Q. Okay. And — Okay. that clarifies that AU 16 between Panthera —
17 right You indicated that apparentiy in 2008,or 17 MR.LINDSAY: You're not —
18 thereabouts, the debtor transfèned essentiaUy aU ofits 18 Q. — Panthera Training and my client?
19 Personal propeity to SMI. 19 MR.LINDSAY: The last thing that he said.
20 A. 2018. 20 A. Veah,thafs-thelatter.
21 Q. Right 21 Q. Okay. Lefs taUc about the schedules a little
22 A. Right 22 bit Specifically on Page 19 you listed yourselfas an
23 Q. lYa soriy. And that induded, fiom what I can 23 unsecuied creditor,or the debtor has listed you as an
24 see, a whole bundi offîiearms — 24 unsecured creditor being owed 2.58 million doUars.
28 (Pages 106 to 109)
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of 37
1 Q. Whafs the difiference between a draw and a
2 Q. I wasnt clear vrfiat the basis ofthat daim was. 2 distribution?
3 is that unpaid compensation? 3 A. Well,I mean,you know,it-yeah,It's the same.
4 A. Some ofit is. Some of it's cash loans, yoii know, 4 yeah.
5 or — or profits that were loancd back to the company is — 5 Q. Okay. So,and on some occasitms you apparently
€ is the majority ofit 6 took that money that you'd received in the form ofK-1
7 Q. Okay. So the majori^ ofit is - is loans that 7 distributions and lent it back to the debtor?
8 you made back to the company? 8 A. ThaPs correct
9 A. Right 9 Q. What sort ofdocumentation exista to show those
10 Q. Okay. Walk me through that, are you saying that 10 loans?
11 as a, first ofl^ as-as a member ofthe LlC,did you 11 A. It — it's — it's reflected in the général
12 reçoive K-1 distributions? 12 ledger.
13 A. We'regoingbackafewyears. Yeah,there was K-1 13 Q. Who maintains the général ledger?
14 income. 14 A. Attfaatpointwebada-badaCPAandCFO, but
15 Q. Okay. Were you a W-2 employée,did you receive a 15 at this point I do. Bnt since — since l've been dotng it
16 salaiy flom the debtor? 16 the last year there's-there's been noue ofthose
17 A. No. 17 transactions.
18 Q. Okay. So the only money that you got- one more 18 Q. Oksy. Before you became the keeper ofthe ledger.
19 — back up one more. Did the debtor ever loan you money? 19 who- who was in charge ofthe ledger?
20 A. No. 20 A. Our —ourCFO.
21 Q. Okay. So any money you got eut ofthe debtor was 21 Q. Who was that?
22 in the form ofa K — K-1 distribution as a member ofthe 22 A. Raymond Barbie.
23 LLC,is that a &ir statement? 23 Q. Spell the last name,please?
24 A. Or — or draws that— 24 A. Ray-B-A-R-B-I-C
Page 112 Page 113
1 Q. Okay. 1 trylng to-that does not Inctude any interest —
2 A. B-A-R-B-I-C 2 Q. Okay.
3 Q. And where does he hail from? 3 A. — iftiiat's what you're asidng.
4 A. He's in N^rginia. 4 Q. Does it have repayment terms?
5 Q. Okay. Washefiredordidhequit? 5 A. No. As 1 said,it's-it's in the général ledger
6 A. Weil,I guess you would say lay ofit yeah. 6 notations,so there's no repaymenttenns noted in there.
7 Q. Okay. Soare wetalkingaboutaphysical ledger 7 right
8 here or is this -is this a digital QuickBooks ledger — 8 Q. Ail right. As you understand this- Imean,
g A. It's — 9 first off,I assume you're on both sides ofthis
10 Q. — or what form is this information? 10 transaction, you're the — the managing member ofthe LLC
11 A. Well,it's-it's a digital accouuting system. 11 borrowing money iiom yourself?
12 Q. Okay. Is there a note,a physical note wheieby 12 A. Right
13 Panthera,the debtor, acknowledged it owed you money because 13 Q. Okay. So it seems to me ifanybody knows the
14 you'd toaned it money? 14 terms,ifs you. Is it a demand note?
15 A. I mean,yeah,the — the général ledger entries 15 A. Basically, yeah,as the — as money b available
16 are-are typically documented that way-(Indiscemibte) 16 we -- we would pay ourselves. But we stove to[«y back any
17 -
17 debtors, you know,that we could before ourselves. You
18 Q. Okay. What are the terms ofthe loan? 18 know,wc're — we see our—saw ourselves as — as belng
19 A. We — we don't bave loan documents. 19 last in line to bc paid.
20 Q. Okay. Well,are you entitled to receive interest? 20 Q. Thafs-thafs the reality ofanybody that owns
21 A. Entitled versus, you know — 21 a small business. I guess. So but the question I have is
22 Q. Okay. Well,Tm not-l'm not trying to parse 22 have-has the debtor ever, in &ct,paid you anything on
23 words with yoa 23 those notes? Or those loans?
24 A. No. I mean,we-we-we don't-wc'rcnot 24 A. No.
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1 Q. Okay. Andoverwhatperiodoftimedidyoumake 1 A. Well,I mean,ifs-
2 these loans to the debtoi? 2 Q. No,rm — Fm not parsing words with you -
3 A. Reallysincetbebeginniagofthe—ofthe 3 A. Sure.
4 Company. 4 Q. -1 wanna know how you booked the transaction.
5 Q. Whichiswhen? 5 A. I don't bave the exact words on each ledger entry.
6 A. 2011. 6 Q. Okay.
7 Q. Okay. How did you capitalize the company.did you 7 A. But It's gonna say sometbing simllar to that, yes.
8 make an investment as opposed to a loan? 8 Q. Okay. Well, lefs drop downto Page 21. Raymond
9 A. Mostofitwasaioan,Ith!iik. 9 Jones bas an unsecured daim of$3,258,323.18.
10 Q. Okay. Well,ofthe 2.58 million dollars youVe 10 A. Okay.
11 claiming as an unsecuied creditor, how much ofthat was 11 Q. Thafs like a million more than yours.
12 contiibuted — contributions to capital as opposed to loans? 12 A. Rigbt
13 A. Well,initiaUy we bad virtually no contributions 13 Q. Whafs that made up of? i
14 to capital becanse we didn't bave any — any infrastructure, 14 A. Again,ifs-it's mostly loans into the company.
15 we were going ont and — and bidding on contracts. 15 Q. Okay.
16 Q. Okay. So,I mean,that's a pretty précisé number. 16 A. And —
17 $2,582,637.31. Where in the books ofthe debtor can I find 17 Q. You're 50/50 owners?
18 that number? Where do I need to go to look for that? 18 A. RIgbt
.!
19 A. It's — it's in the général ledger. 19 Q. In niy experience when you bave 50/50 owners the '
20 Q. Okay. And ifs gonna be, best you necall, since 20 discussion goes sometbing like this, hq',the company needs
21 you're now the keeper ofthe général ledger, what l'm gonna 21 & hundred grand,Fm putting in fifly, you gotta put in
22 see is notations that say loan firom member? 22 fifty. How was it tbat Mr.Jones contributed hundreds of
23 A. SontethingtotIiateffect,yeab. It's- 23 thousands ofdollars more in loans than you did?
24 Q. Well, what other effect could it be? 24 A. It was-it was an agreement between he and I
Page 116 Page 117
1 that, you bnow,tbat be bad the ability to — to loan money 1 againjust so we're-
2 in times where I didn't,and — and that's-that's wbat 2 MR.LEON: Okay. Let me make sure i understand
3 happened. 3 the players because 1 get lest in ail these, everybody's
4 Q. Okay. So is that agreement in writing? 4 named the same thing.
5 A. Ifs — ifs In the général ledger. 1 mean — 5 MR.LINDSAY: Training Center is a-is a debtor
6 Q. Okay. Soisityourbeliefandundcrstandingthat 6 subsidiary,or partiai -
7 that 3.258 million dollars is a loan from a member? 7 Q. Panthera,LLC,dte défendant in the adversary
8 A- Yes. 8 proceeding,am I correct that it is leasing die realty that
9 Q. Okay. Were there any contributions to capital 9 the debtor owns on which this training fecility is located?
10 made by either of you as opposed to loans? 10 A. That's correct
11 A. 1 — I believe initlally there may bave been some 11 Q. Okt^. And isitalso correct that at présent the
12 contributions to capital,I don't recall- 12 biggest source ofincome for the debtor are the rent
13 Q. Okay. 13 payments firom Panthera Training,LLC?
14 A. — but 1 thinkifs mostly loans. 14 A. Tbat's correct
15 Q. Is it a feir statement to say that in large part 15 Q. Okay. And fbrtackofabetter terni, theyquit
16 this bankruptcy was precipitated by Panthera Training 16 paying you,apparently?
17 stopping p£^g its rent, cutting ofif your ability to 17 A. Well,ifs in two parts,so —
18 service the debt owed to the State of West Virginia over 18 MR.LINDSAY: I -ifs a little more-there's -
19 here? 19 - there's dififerent rent aspects under the lease.
20 MR. KAHLE; You mean,Panthera Training Center? 20 MR.LEON: Right.
21 MR.LEON; Yeah. 21 MR.LINDSAY; We believe,I will-will say
22 Q. Whoever you're suing in the AP. 22 conservatively that, believe ihey continued paying a portion
23 MR.LINDSAY; I think he means Panthera Training, 23 ofit, but there are other portions that it!s our position
24 not Panthera Training Center. Ifyou wanna ask the question
24 that they have not paid.
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1 MR. LEON; They owe a S52,000.00 a month base 1 property ifyou were making the note payments?
2 rent, right? 2 A. Well,I mean,there were other arrearages and ;
3 MR.LINDSAY: Correct 3 other — other Issues that they had. So do you wanna ~
4 MR.LEON: Okay. 4 Q. Okay. Oneofwhichis this impaid property tax,I
5 Q. Are they paying that? 5 guess? ;
6 A. Yes. 6 A. That's one, yes.
7 Q. Okay. Se thafs $600,000.00 a year inoome fixrm 7 Q. Okay. Okay. Couple ofquestions about Mr. Neff.
8 that So the hiss with them is over this additional rent 8 I think there are,as I understand it, these are sort of
9 thafs based on some profit^ility calculation? 9 modular ofiice units -
10 MR.LINDSAY: Thafs a portion ofthe fùss. 10 A. Correct ,
11 MR.LEON: Okay. 11 Q. -that are on wheels, or at least can be ^
12 Q. And is the $500,000.00 you're getting insufBcient 12 transported on a undercaniage ofsome sort, right?
13 to serve as the debt due the State of West Virginia over 13 A. Correct i
14 here? 14 Q. AndlthinkyouVegot what37,orso,ofthem
15 A. No,it's Dot insufiicient It is sufficient 15 out there?
16 Q. It is insufEicient? 16 A. it's 37,38, yeah.
17 A. It is suflident 17 Q. And — and they can be lashed together to make
18 Q. Okay. 18 larger units, right?
19 A. Yeah. 19 A. Correct
20 Q. Are you paying the State ofWest Virginia on this 20 Q. Okay. And how many ofthose,I dont knowwhat i
21 note? 21 you cal! that, a pod or a-those lashed together things.
22 A. Tbey've been paid. 22 how many ofthose unit assemblages are out there on your
23 Q. Okay. And so, as you understand it why did they. 23 proper^
24 the state, give notice that is was gonna foreclose on this 24 A. Let's see —
Page 120 Page 121 !
1 Q. Three? Four? 1 A. That's correct !
2 A. - there's ftve, I think. 2 Q. Okay. Again,just sort offor my édification, who
3 Q. Five,okay. Howinany ofthem are you actually 3 or what was TENX? ^
4 using? 4 A. TENX was the original, the name ofPanthera
5 A. Thcy're al! — thcy're ail— 5 Enterprises, the origiDal name,and we changed it in 2016.
6 Q. You.the debtor? 6 Q. Okay. So it was an LLC as well?
7 A. We- we,as the debtor, right now they're leased. 7 A. Yes.
8 So they're leased. 8 Q. Was there a merger or was itjust a change of
9 Q. Okay. How many are the lessee using? 9 names?
10 A. 1 believe ail of them. 10 A Just a name change.
11 Q. Forwhat? 11 Q. Okay. As &r as you know,and I may have asked
12 A. Office space and training,classroom training 12 this and probably forgotten the answer,is Panthera
13 space. 13 Training, LLC,using the guns and the trucks and ail the
14 Q. Okay. And I think your counsel indicated that to 14 other Personal property that Panthera Enterprises
15 his mind there is some issue about whether- who holds 15 transferred to SMI?
16 title to those properties, is that a iair statement,those - 16 A. 1 believe so.
17 - those units? 17 Q. Okay. Ami correct that part ofthe use ofthese
18 MR.LINDSAY: I-ifI -1 dont believe I said 18 vehicles is they eventually get shot up,th^re used for
19 that. We identified them as-as — as assets ofthe 19 target practice?
20 estate. 20 A Well, 1 mean,the majority of the vehicles are
21 MR.LEON: Okay. 21 used for — as training vehicles.
22 Q. They werent,those units were not part ofthe 22 Q. Right.
23 personalty that you sold to or transferred to SMI,is that 23 A. They're ~ they're vehicles that are bonght as
24 correct? 24 junk, you know,asjunkers and used in that way, yeah.
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1 Q. CMcay. Just out ofcuriosity, what— 1 State ofWest Virginia on the other parcel.
2 v\4iafs your educattonal backgroiuid? 2 EXAMINATION OF MR.PUNELLI
3 A. I bave a bachelor ofscience in — in océan 3 BY MR GOOD:
4 engineering from the U.S. Naval Academy,and I bave a 4 Q. Some ofthese are real quick, Jim.
5 niasters degree in business. 5 A. How are you doing,John?
6 Q. Okay. How old are you,sir? 6 Q. Would you agree that you and Ray Jones are
7 A. rm57. 7
guarantors ofthe Howard Shockey & Sons debt?
8 Q. 57? B A. Yes.
9 A. Yes. 9 Q. Okay. I did, I apologize,I didnt hear your •
10 Q. Okay. Thafs ail the questions I have for you,I 10 answer to that-
11 appreciate your patience. 11 A. Yeab.
12 A. Sure. 12 Q. — question earlier to Ms. Allen. In earlier work
13 MR. KINDER: Do you ail have questions back there. 13 with you and Jim -and pardon me-Ray, you mentioned you
14 corne on up. Did you have questions? 14 had a business in North Carolina,do you still have that? '
15 MR.QUEEN: No,sir. 15 A. No. •;
16 MR KINDER: Ifyou wanna have a seat here. 16 Q. Okay. Did it have any relationship, either rash
17 identiiy yourself. Then Fil have some,ifthis is the last 17 coming or going with the debtor?
18 questioning, l'il have a few housekeeping things at the end. 18 A. Yeab,there were some — there were some loans
19 and then we'll wrap up. Ifyou can identify yourself vrfio 19 that were-tbat were co-signed by tbem,if you wiD,that
20 you represent, and then you can go ahead now. 20 bave been paid previousiy. Several —
21 MR GOOD: Fm John P. Good,Jr. l'or treasurer of 21 Q. Loans to the debtor?
22 Howard Shock^& Sons,Inc., and we're a trust holder on the 22 A. Well, yes. But-
23 real estate,second trust holder on one ofthe parcels, and 23 Q. So — 80 the debtor paid those loans because th^
24 third trust, I believe, aller the paving company in the 24 were co-signed by the-
Page 124 Page 125 :
1 A. No,ao — 1 that-
2 Q. -Noith Carolina business? 2 A. Right. j
3 A- No,no.they-tbey'reveiyseparateinany- 3 Q. -line ofquestioning. Let's go back to this
4 any, you know,as &r as any payment made. I mean,there 4 timber situation. I spoke with Ray Jones,I believe, about
S were — But because we bad an ownersbip interest in thcm. 5 that aller a title search tumed up that the-an interest
6 they — let's see, bow do I — We bad an ownersbip interest 6 in the timber somehow was transfeired. This SMI,I dont
7 tn tbem at one tinte,so we borrowed money,so — so die 7 recall. There was a person*^ name associated with that that
8 debtor bad borrowed money and tbey were guarantors. 8 had loaned you money. Do you recall that-that name? '
9 Q. They were- g A. I believe It's tbe — tbe member ofSMI is — is
10 A. But — 10 Terry Migliore.
11 Q. - guarantors ofthatdebt? 11 Q. Okay. Ail right. And it, would it seem
12 A. Rigbt, but — bot any—any money that was, you 12 consistent to you that my conversation with R^ included.
13 know,any-any debt tbat debtor bad the debtor paid,did 13 when I asked about, you know, we — we do have a-an
14 not pay any debt oftbat Nortb Caroiina company. 14 interest in the real estate —
15 Q. But it eliminated that guaranty. 15 A. Rigbt.
16 A. Well,the debt was paid off. We-the debtor 16 Q. -the West Virginia Economie Development
17 paid offtbe-tbe bankloan. 17 Authority has an interest in the real estate, and the timber
18 Q. When was that debt created? 18 is rooted and grows on the real estate, we were concemed
19 A. Tbat was,I thlnb,2012. 19 about that-
20 Q. 2012. 20 A. Rigbt
21 A. Ycah. 21 Q. -Ray said, and -and I assuming,I think you
22 Q. When was it paid ofi? 22 said earlier today it has not been harvested, is that
23 A. 20IS, maybe,'16. 23 correct?
24 Q. Okay. You understand myreason for-for that- 24 A. Tbat's correct.
32 (Pages 122 to 125)
WENDI L. WATSON, P. 0. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
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of 37 Page 127
1 Q. Ail right. Whafs the trigger for harvesting? 1 A. Well,that's ~ tbat's an accurate
2 A. I don't know tbat 1 caa aoswer tbat Do-1- 2 characterization,I thlnk is how Ray looked at it, yeah.
3 MR. LINDSAY: I think — I don't know ifthere's— 3 Q. Okay. Atthepotentialexpenseofthefirstand
4 Q. Is that the- 4 second,and — and in our case,and some cases,third trust
5 MR.LINDSAY: -trigger other than SMI has the 5 holder ultimately ifthat timber would be harvested by that
6 rights to use the — 6 creditoi?
7 Q. Or-or is it your understanding, is it being 7 A. Yeah,Isuppose so, yes.
8 stayed the action now or — And — and let me wrap that 8 Q. Okay. Greg Farland ofour company,and I, met
Q
y up.
9 with you,roughiy,Febniaiy of2018. Do you remember we met
10 MR.LINDSAY: Without giving you a légal opinion. 10 you up at the-
11 I -1 -1,lefs just say, I- we can't answer that 11 A. Yeah.
12 MR. GOOD: Okay. 12 Q. -trailers there-
13 Q. And -and-and final question related to fliat 13 A. Veab.
14 is is it consistent, Ray told me ftat, when 1 asked about 14 Q. -and you gave us some information that we had
15 this, 1 did net understand it at ail ffom him,that it was a 15 requested,including three years worth oftax retums and
16 sale oftimber, but that it was,these aren't his exact 16 some internai financial statements. Do you have any problem
17 words, but the impression 1 got was it was to make the 17 if1 share one page ofone ofthose tax retums with you to
18 person who loaned the money some time ago to the debtor feel 18 — as the basis ofa question, with your counsel,so they
19 more secure, is that ~ is that — thafs your take on it. 19 can see what l'm talking about-
20 too? 20 A. Okay.
21 A. I thInk tbat's — I mean,Ray is tbe one who 21 Q. -and with the représentative ofthe United
22 worked on it, but tbat's-tbat's- 22 States Trustee's Office, problem with one page? 1 dont
23 Q. But it was to help give security to somebot^ who 23 give out other people's tax information.
24 had made a loan at some earlier date? 24 MR.LINDSAY: Understood,and 1 think 1 would have
Page 128 Page 129
1 to look at iL If ifs gonna become part ofthe record,I 1 ofthelasttaxyearpresented wassubstantiallylower. 1
1
2 would like to -1 need to review it 2 couldnt understand that. Do you remember me being confiised
3 MR.KINDER: We dont attach exhibits to these,so 3 about that?
4 it would not be an exhibit, but- but- 4 A. And — and l'm not a — Fm not a tax expert,I
5 MR.LINDSAY: But to the extent there's 5 can't speakto this.
6 inform^on Irom it that is gonna be — become- 6 MR.LINDSAY: 1 mean,ifyou — if — ifyou'd
7 MR.GOOD: Verbalized? 7 like to ask questions, 1 dont know that- This is,just
8 MR LINDSAY: - part ofthe record- 8 this one page, Fm not comfortable, fiankly,just refeiring
9 MR.KINDER: Yeah. 9 to without eveiything else that-that went into the
10 MR.LINDSAY: -1 dont know that well- 10 création of-ofthis tax retum. But certainly you can
11 Q. Tum to the second page, because it's attached. 11 ask questions. i
12 And hete's a copy for you,too. This can« outofthe 2016 12 MR.GOOD: Well, Fil ask my question. i
13 retum. 13 MR.LINDSAY: Okay.
14 MR.LINDSAY; Can I ask you what-what-what 14 MR.GOOD: And -
15 information are you going to ask about? 15 MR.LINDSAY: If he can answer it, hc — he
16 MR.GOOD: The question is on the other page. 16 certainly will.
17 Q. As background, when you shared the-and gave us 17 MR.GOOD: — I wont share the copy ofthe part
18 copies ofthe tax retums, it wasjust in the same meeting, 18 ofthe tax retum then, but Fil ask my question.
19 I flipped through the retums and I had questions about the 19 Q. The 2016 Form 1065 Fédérai Tax Retum for TENX
20 equity section ofthe balance sheet, that ifthe beginning 20 Group, LLC,now Panthera Enterprises, LLC,Schedule M-2,
21 equity at the beginning ofthe three-year period was one 21 shows a propeity distribution of$6,507,664.00. This
22 number, and ifI subtracted the losses recognized on that 22 distribution caused partners capital accounts to show a ]
23 tax retum, the three tax retums, 1 would get one equity 23 négative balance on the tax retum of$2,871,626.00.
24 number, but the equity number actually reflected at the end 24 Similarly, the member equity shown on the consolidated
33 (Pages 126 to 129)
WENDI L. WATSON, P. 0. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
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13011/02/19 Entered 11/02/19 10:03:07 Page 35
Page 131
1 balance sheet ofTENX Group.LLC,this is the prepaied of 137
MR.LINDSAY: Didyou-
2 financial statements outside ofthe tax retum you gave me. 2 A. — from the company.
3 shows a négative balance ofS3,729.892.00. This proper^ 3 MR. UNDSAY: You didn't préparé these tax
4 distribution lendered the company insolvent Key question. 4 retums?
5 what made up the distribution and who received it? 5 A. We-1 don't remember,wbat year was that?
6 A. Okay. Again,Tm not a tax expert,and I — and 6 MR.UNDSAY: This is 2015.
7 Tm — Fm certatniy net, you know,a gap,you know. 7 A. No.
8 accounting expert, but 1 wiU tell you that Itbink there 8 Q. 2016-
9 wcre some adjustments made,some — it wasjust adjustments 9 A. Yeah.
10 bccause Ray Jones nor I received any lai^e distributions, we 10 Q. - tax retum.
11 never really received any distributions. So,you know,so. 11 A. Yes.
12 I mean, your question's comprised like, well, who received 12 MR.LINDSAY: That's— Maybe it is, it's — it
13 this distribution,and there was none. There was no- 13 says 2015 at the top. But Fil — l'il take your word for
14 there was no cash distribution or property distribution. 14 it, but either way you didn't-
15 Q. But six and a half million dollars ~ 15 A. No.
16 A. 1-1 don't know why the adjustment- 16 MR.UNDSAY: — préparé either one ofthese?
17 Q. -is-is not mémorable? Ifs-it's- 17 A. Hmm-mm.
18 A. I don't know why the adjustment was made,and well 18 MR.LINDSAY: I don't know that he can really
19 - 19 testify as to what this form says.
20 Q. It wasnt shown as an adjustment, it was shown as 20 Q. But what, you understand why? And 1 see where.
21 a distribution. 21 the same thing you're saying, 2015's at the top.
22 A. Okay. Again,I don't know why that's ~ WhatFm 22 MR LINDSAY: Okay.
23 telling you is we never- we never received any large 23 Q. 1-1 maybe have to stand corrected, maybe it was
24 distribution, never received any distribution- 24 a 2015 retum filed in 2016. I may — I will comect the
Page 132 Page 133
1 basis ofmy question because that-that could be. Ijust 1 Q. Okay. Allright. Well,thafs the-ail 1 have.
2 discovered this this moming in preparing to corne over here. 2 Thank you very much.
3 So I didnt have a lot oftime to -to double check, but it 3 MR.KINDER: Any other questions?
4 was shown as a distribution not as an adjustment. There are 4 MS. ALLEN: I have two clarifying questions.
5 plenty of places for adjustments to be shown. 5 MR KINDER: Okay.
6 MR UNDSAY: Understood. And ~ and again,I 6 MS. ALLEN: Just what Mr. Léon,and I didn't catch
7 just have to assert-(indiscemible)-he didnt préparé 7 his name.
8 it, and-and - 8 RE-EXAMINATION OF MR PUNELLl
9 MR.GOOD; And the impact on the equity took it 9 BY MS. ALLEN;
10 fiom a positive equity to a négative equity. 10 Q. Your attorney at the first scheduling conference
11 Q. You can understand why — (indiscemible)— would 11 we had with the court, with thejudge, indicated that you
12 be asking this question? 12 had filed the bankmptcy because ofthe foteclosure that had
13 A. I understand,and — and it bas — it bas 13 been initiated by the WVEDA,do you recall?
14 something to do,I think, who knows,it could be the 14 A. Yes.
15 adjustments witb Panthera Training Center, which bas a 15 Q. You were on that call. Okay. Because Mr.Léon
16 separate tax retum,Fm not sure. Ali I — ail I know is I 16 made a statement that he thought the bankmptcy filing was
17 can tell you that we never received any dbtributions. So, 17 pronqrted Panthera Training's iàiluie to pay tent,and
18 thafs not correct?
18 you know,we were —
19 Q. But is there another entity that mighfve been - 19 A. No,that-thaFs not correct, na
20 A. No.
20 Q. Ok^.
21 Q. - heaved off, and that — that that entity needs 21 A. 1 -1 don't know that 1 answered that it was,1
22 said —
22 to be brought back into this?
23 A. I — I don't — I don't think so, no. No. I — I
23 Q. Okay. Ijust wantedtomake sure it was clear.
24
24 A. Okay.
can't answer the-tbe numbers there.
34 (Pages 130 to 133}
WENDI L. WATSON, P. 0. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
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1 Q. Okay. And then there was reference from the last
of 37 Page 135
1 A. Some — sonie was,and some wasjiist done
2 gentleman ofa Terry Migliore in SMI,
2 oursehres.
3 A. Yes.
3 Q. And who did they retain?
4 Q. Was there a separate loan made by Teny Migliore? 4 A. rm-riasorry,Idon'tunderstand?
5 A. It's — it's ail through SMI as — as far as I —
5 Q. Who did ihey-who did they hire? Who was the
® I can recalL But she's the — the member,the owner of 6 contiactor they hired?
7 SMI
7 A. I don't recall.
8 Q. Isee. Isee.
8 MS. ALLEN; I have nothing else.
9 A. That's what he asked rae^ who the name was. 9 MR. KINDER; Okay. No other questions? Okay,
10 Q. And was that loan to you or to the debtoi? 10 there's a couple things Tve already asked for, but Tm
11 A. To — to the debtor.
11 gonna ask for a few other things that I havent asked for.
1^ Q- Okay. And -• and then the last thing is has the 12 thenrilgiveasummajyofeverythingrmaskingfor. If
13 debtor done anything to maintain the property in the last 13 you can provide us with a copy ofthe timber agreement,I
14 three/four years? 14 don't know ifthat was a sale or a security interest, or
15 A. There isn't a lot of-1 mean,there's been- 15 whatever, but the — the agreement related to the timber. I
16 we've done work on,you know,érosion control and — and try 16 think that we would like a list of.and this kind ofgoes to
17 to maintain that,and - 17 the next thing. which is an Amended Schedule H. which you
18 Q. Did the debtor pay for that? 18 already indicated you intend to file, but Amended -
19 A. Well, yes. 1 mean,in — in, you know, 19 MR.LINDSAY: Yes.
20 maintenance ofthe property, yes. 20 MR.KINDER: — Schedule H to reflect ait the —
21 Q. And when was that done? 21 theguarantorsandco-debtors. Butalsoalistofallnon-
22 A. I mean,it's kind ofa constant ongoing thlng. I 22 publically traded ownership interest in companies that
23 mean, we're in the mountains, yes. 23 either James Punelli or Raymond James has. So a list
24 Q. Did they hire a ccntractor for that? 24 because there was a company that came up that would have not
Page 136 Page 137
1 appeared anywhere else on Schedule — on — with respect to 1 agreement,a list ofthe non-publically traded — tiaded
2 this lequest for a new Schedule H,so which there may not be 2 ownership interest in businesses or companies that James
3 any that you own, but there's at least one that Raymond 3 Punelli and Raymond James has,the amendment to Schedule H.
4 James owned. 4 a breakdown ofthe accounts receivable. and the summary of
5 A. That's présent tense? 5 payments to insiders that-that would beshared. AndFm
6 MR. KINDER: Yes,thafd be — Well. okay. lefs 6 going, like 1 mentioned before, we're gonna keep the record
7 say within, presently or within the past year. 7 open. Ifanyofthose documents would inspire additional
8 A. Okay. 8 questions,so that we don't have to move for a 2004
9 MR. KINDER; Then Fd also like to see a breakdown 9 examination. Fil keep the record open. but ifour questions
10 ofthe accounts receivable as to who owes the debtor what 10 are satisfied by the provision ofthose documents,then
11 under the accoimts receivable. And then we also discussed 11 well close the Meeting ofCreditorsat that time.
12 this, and this may be separate frora the bank statements we 12 Is there anything else anybody would like to put
13 already discussed, but a summary of payments made by either 13 on the record?
14 the debtor or subsidiaries ofthe debtor to insiders, and 14 MS. ALLEN: Is there a time by which the/re gonna
15 thafs something that I would intend to share with creditors 15 provide this information?
16 iftheyaskforit. 16 MR.KINDER: Definitely the summary of payments to
17 A. Okay. 17 insiders was 10 days. Do you have a time firame you ail
18 MR.KINDER: Sojust to summarize a total list. a 18 would like to suggest on - The insurance. I know is-is
19 list of bank statements for the past year ofthe 19 currently due.so that's as soon as possible. Doyouwaruia
20 subsidiaries. the-a copy ofthe documents related to the 20 suggest a-
21 Personal property transfer that occurred,the insurance is 21 MR.LINDSAY: Ifyoujust-if-ifwecould
22 an ongoing- 22 have 14 days?
23 A. Rigbt 23 MR. KINDER: Two weeks,okay. Two weeks for the
24 MR. KINDER: - request, a copy ofthe timber 24 other stuff. And again, other than the payment to insiders.
35 (Pages 134 to 137)
WENDI L. WATSON, P. 0. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
No. 2:19-bk-00787 Doc 52-5Page
Filed
13811/02/19 Entered 11/02/19 10:03:07 Page 37
Page 139
of 37
1 we would check with the debtor befbre we'd share any
2 information with anyone else, and get petmission befbre we'd CERTIFICATE
3 do that. So unless anything,anybody else had anything to STATE OF WEST VIRGINIA.
COUNTY OF JEFFERSON,to-wit;
4 add, we'll tum offthe recoiding and -and close testimony I, Wendi L. Watson, a Notaiy Public for the State of
5 fortheday. Thankyou. West Virginia, do here ceitiiy that the aforegoing
6 MR.LINDSAY: Thankyou. transcript was recorded by mechanical sound means on the day
and date as stated on the title page ofthis transcript and
7 (Proceeding went offthe record at 12:33 reported to the best of my ability. Indiscemible when
8 p.m.) questions or answers are muflled or parties are speaking
9
over one another. Inaudible when diere is no verbal
response.
10
11 I flirther certify that I am not related to any ofthe
12
parties, nor am I an employée ofany ofthe parties, nor am
I related to any ofthe attorneys representing any ofthe
13 parties, and I have no financial interest in the outcome of
14 this matter.
15
16 Given under my hand and seal this 28th day ofOctober,
17 2019.
18
19
20
21
22
23
My Commission Expires:
24
November25,2022 Wendi L. Watson
36 (Pages 138 to 139)
WENDI L. WATSON, P. G. BOX 3355, SHEPHERDSTOWN, WV 25443 304.283.5375
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