![]() ![]() Seventy-five of the 250 stores Circle K conveyed to Kathary in this agreement had been acquired by Circle K from the Plan.ĭonovan v. The Kathary II agreement was finalized in April of 1987. The agreement required Circle K to lease back the stores at a rate several times higher than Circle K had been paying. This agreement contemplated that Kathary would buy 250 stores from Circle K for $100 million. One week prior to the Plan's conveyance of its property interests, Circle K entered into a "non-binding" sale/leaseback transaction with financier Robert Kathary. On October 21, 1986, the trustees conveyed to Circle K the Plan's interests in the 91 stores for $4,393,700. The trustees decided to sell the Plan's assets for the price fixed in the appraisal. To the extent the trustees received legal advice regarding the sufficiency of the appraisal, that advice was received from Circle K attorney Jerry Busby. The record, however, contains no indication that the trustees formally met to discuss the appraisal. According to Hutchinson's affidavit, the trustees reviewed and discussed the appraisal. Nevertheless, in his affidavit of December 18, 1992, trustee Robert Hutchinson states that the trustees insisted the sale take place according to Zaboroski's recommendations.Ĭircle K retained an appraiser to render an opinion as to the fair value of the Plan's *352 assets. No notation on this letter indicates it was forwarded to the Plan trustees. The addressee of this letter, however, was Robert Reade, executive vice-president of Circle K in charge of real estate, and copies of the letter were forwarded to Circle K officers Bill Farmer, Charles Shoumaker, Tom Cosgrove and Circle K attorney Jerry Busby. In an affidavit dated December 19, 1989, Zaboroski indicated that in a Maletter, he "provided the Plan with a legal opinion." That opinion consisted of Zaboroski's summary of ERISA requirements in order for the sale to Circle K not to be a prohibited transaction. Robert Zaboroski, an attorney who specializes in ERISA law and who is a member of the El Paso firm of Kemp, Smith, Duncan and Hammond, was counsel to the trustees. In early 1986, Plan trustees and Circle K officers discussed Circle K's possible purchase of the Plan's interests in the 91 stores. Upon Plan termination, one of the duties of the trustees was to liquidate and distribute Plan assets. The Plan owned a reversionary interest in the other 79 stores, which interest was subject to a long-term below-market lease to Circle K and was subordinated to other entities holding a mortgage on the properties. The Plan owned twelve of the stores outright but subject to leases held by Circle K. Assets of the Plan included interests in 91 of Circle K's convenience stores. In 1985, Circle K made a business decision to terminate the Plan. Other persons owing fiduciary duties to the Plan were Circle K as plan sponsor and plan administrator Brent Foshie. Hutchinson, President of Circle K, and Millard Orick, President of Sun World Corp. Hervey, founder and Vice-Chairman of the Board of Circle K and Chairman of the Board of Sun World Corp., Robert E. Those facts of particular significance to these motions are described in this order.Īt all relevant times to this action, the Plan trustees were Fred T. The facts relating to this case are set forth in this Court's order of December 23, 1994. Also pending before the Court are cross-motions for summary judgment as to whether Karl Eller was a Plan fiduciary for ERISA purposes. § 1002(21) (A), for the Fred Hervey Interests Employees' Benefit Plan ("the Plan") when it purchased certain real assets from the Plan. Pending before the Court are class plaintiffs' and defendant Circle K Corp.'s ("Circle K") cross-motions for summary judgment on the issue of whether Circle K was a fiduciary, as defined in the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. ![]() Thomas Preston Burke, Paul Michael Gleason, Daniel Adam Weisberg, Brobeck Phleger & Harrison, Los Angeles, CA, for Karl Eller, Joan Eller. Howard Shapiro, Anne Horton Breaux, McCalla Thompson Pyburn & Ridley, New Orleans, LA, for Jane Doe Hervey. Ballard, Ballard Rosenberg & Golper, Universal City, CA, Craig Eugene *351 Epperson, Lillick & Charles, San Francisco, CA, for Fred Hervey. Smith, Kemp Smith Duncan & Hammond, El Paso, TX, for Circle K Corp. Kerns, Streich Lang P.A., Phoenix, AZ, Tad R. O'Dowd, O'Dowd, Burke & Lundquist, P.C., Tucson, AZ, for plaintiffs.ĭan M.
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