City investing company liquidating
Gal resigned shortly thereafter, and was succeeded by Lazare. Each share of common stock in Panex was converted into a nontransferable “unit” of the Panex Trust. Once aware of this potential liability, the Trustees postponed any further distributions and extended the life of the Panex Trust beyond its three-year term. The Proxy Statement for Panex's Liquidation Plan informed stockholders: It is possible that the entire amount which will be held in the Liquidating Trust to cover contingent and other liabilities of Panex will be used to discharge such liabilities ․ Moreover, although the Board of Directors believes that the amount of approximately million which will be deposited in the Liquidating Trust will be sufficient to cover any liabilities which may arise during or after the Liquidation Period, there can be no assurance that this will be the case. If the amount held in the Liquidating Trust is insufficient to discharge fully all liabilities which arise, or if liabilities arise after the Liquidating Trust is terminated, each Panex stockholder may be liable for any unpaid portion of such liabilities to the extent of the liquidating distributions paid to him․ 5Each year from 1985 through 1991, the audited financial statements prepared by the Panex Trust's independent auditors reminded the former shareholders of the Proxy Settlement's earlier condition that “[i]f the amount held in the Trust is insufficient to discharge fully all liabilities which may arise, or if such liabilities arise after the Trust is terminated, each beneficiary may be liable for any unpaid portion of such liabilities to the extent of liquidating distributions paid to such beneficiary by the Company and the Trust.”In 1987, the Environmental Protection Agency (“EPA”) found that several wells in the east-central portion of St. Esso and Texaco had service stations in the area, and were called upon by the EPA to enter into an Administrative Order of Consent that required them to undertake an investigation of the Tutu site. Esso and Texaco have expended over million in responding to the EPA's remedial orders, including the funding of the remedial investigations. It is expected that the total remediation will cost in excess of million. In accordance with the Trust Agreement, ¶ 4.1, the Trustees defended the Tutu Wells action.
The appeal is from the September 30, 1997, Order of the Court of Chancery, as amended October 10, 1997 (the “Order”), seeking to have it reversed and set aside. In 1983, pursuant to a plan of reorganization, a Final Decree was entered which provided, inter alia a general discharge of Duplan's debts and liabilities and a permanent injunction against any debtors from commencing any suit against Duplan or Panex. In 1981 Duplan emerged from bankruptcy, reorganized and was renamed Panex Industries, Inc. Panex's principal shareholders were the family interests of Lazare and Gal (37% of the common stock); a former trustee of the Panex Trust, Rosenbloom and his partnerships (40%) (“the Rosenbloom group”); and Goldman Sachs (13%).