UNITED STATES BANKRUPTCY COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA IN RE: UNIQUE VENTURES GROUP, LLC, DEBTOR.
Bankruptcy Case No. 17-20526 Chapter 11
FIRST DAY DECLARATION
Now Comes Eric E. Bononi, the State Court Receiver, Chief Operating Officer and Chief
Restructuring Officer of the Debtor pursuant to an Order of the Court of Common Pleas of Allegheny
County, Pennsylvania, and declares as follows:
History of Business Entity
The Debtor, Unique Ventures Group, LLC (“Unique”) is a Pennsylvania Limited Liability
Company with original members consisting of Joseph Rusnock, Michael Sabatini, Jack Kuhn, Carl Baker
and Jack Nalipinsky. Unique currently owns 28 Perkins restaurants and may have an interest in ten (10)
Burger King Restaurants. See, Exhibit “A” and Exhibit “B”.
Unique originally purchased the Perkins restaurant operations for a total purchase price of
approximately $38,000,000. Spirit Funding financed the purchase transaction by acquiring fee simple title
to these restaurants and then back to the Debtor1. Unique pays Spirit $265,000.00 per month to “lease
back” these locations. After paying Spirit Funding and other monthly operating expenses, Unique paid
itself monthly accounting and management fees and pays salaries to officers and directors. Historically,
the operation of the restaurant businesses grossed approximately $38,000,000 per year. However, after
paying Spirit and certain operating expenses, Unique reportedly was netting only approximately $500,000
per year.
In an effort to expand its profits, Unique purchased the Damon’s trademark out of this bankruptcy
court. Franchisees of Damon’s are required to pay fees of approximately $75,000 per year, which should
be revenue to Unique.
1 More detail on this transaction is outlined in the Cash Collateral Motion and Order that will be filed in this case.
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Certain Insiders of the Debtor formed a new business entity known as Elite Restaurant Group, LP
(referred to herein as “Elite”) on March 3, 2015. Elite is a Pennsylvania limited partnership which was
originally formed to be the transferee of all of the assets of Unique. The Controller for both Unique and
Elite is Dewayne Chandler. There is significant “infighting” among the insiders of both Unique and Elite
regarding ownership interests.
Further, and as more fully set forth below, there were major issues with inaccurate bookkeeping
for these businesses, as there were two entities paying the debts of Unique. Furthermore, significant
delinquent sales and payroll tax obligations posed a dire situation for these businesses.
Receivership
On or about February 16, 2016, an action was commenced in the Court of Common Pleas of
Allegheny County, Pennsylvania, at case number GD 16-002322, seeking, among other relief, the
appointment of a Receiver for Unique. See, Exhibit “C”. By Order dated October 13, 2016, the
Honorable Christine Ward appointed, Eric E. Bononi, as the Receiver for Unique. A copy of that Order is
attached as Exhibit “D”.
Pursuant to the terms of the Receivership Order, Judge Ward substituted the Receiver for and
displaced the executive committee of Unique and the Receiver was granted full authority to exercise all
powers and authority given to the Executive committee by the amended Operating Agreement of Unique
Ventures Group, LLC dated July 31, 2015. The Receiver is the defacto corporate governance of the
Debtor.
Currently, the Receiver is in possession of all the Debtor’s assets (“Property”) and is responsible
for the operation, management, maintenance and preservation of the Property under the terms of the
Receivership Order, including taking such steps as the Receiver believes are necessary in order to
manage, operate, protect, and preserve the Property.
Upon his appointment, the Receiver began to investigate various allegations made by the rival
factions of insiders and to perform a forensic accounting of the business. Upon his appointment, the
Receiver hired Chuck Dahlman, a former IRS criminal investigator of MDO Investigations in Pittsburgh,
to investigate the various allegations, to perform forensic accounting, and to assist the Receiver in this
matter. The corporate accounting books were approximately eight months behind.
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As a result of the investigation, the Receiver has determined that the so-called “Elite Restaurant
Group, LP”, does not conduct any business operations and has no revenue of its own. Instead, all of the
funds flowing through Elite were the revenue, assets and property of Unique.
Further, at the time of his appointment, the Receiver learned that Unique owed approximately
$500,000 in delinquent sales tax payments to the Pennsylvania Department of Revenue. This considerable
tax delinquency was confirmed by one of the principals of Unique during an evidentiary hearing on
October 19, 2016. What was not known to the Receiver at the time, nor disclosed to the Court by any of
the owners of Unique, was that Unique additionally owed significant delinquent tax payments to other
taxing authorities, including six-figure sales tax obligations to the State of Ohio and six-figure
employment tax obligations to the United States Treasury, for a total of approximately $1.8 million.
Based upon the Receiver’s subsequent investigation, it appears that Unique remains delinquent in the
following tax payments (excluding delinquent real estate tax obligations):
Taxing Authority Type Delinquency United States Treasury, Internal Revenue Service
Employee Withholding/Payroll Taxes
$518,910
Ohio Department of Revenue
Sales Taxes $794,442
Pennsylvania Department of Revenue
Sales Taxes $510,941
These unpaid tax obligations constitute a considerable financial challenge to Unique, and substantially
threatens its ability to continue operations. (By way of example, at the time of the Receiver’s
appointment, a principal of Unique had already negotiated with the Pennsylvania Department of Revenue
to make payments of $5,000.00 per day against the past-due balance. Payments in that amount are
unsustainable, particularly during Unique’s slower winter season. The Receiver has since negotiated a
reduced payment of $13,500.00 per week, but even this amount is difficult for Unique to meet while also
paying other operating expenses.) This Chapter 11 filing will assist in providing an amount of “breathing
room” necessary to help the reorganization of these restaurant operations most likely by a 363 Sale
Transaction or a recapitalization and Plan of Reorganization.
In addition to these priority tax obligations, Unique currently owes general accounts payable of
approximately $2,250,000.
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Additionally, the ownership and structure of Unique and its related entities, such as CBK
Future’s, Inc. which may own an interest in ten Burger King locations in Ohio, and Damon’s of North
America, LLC, which owns the trademark and associated Damon’s property (but which assets were paid
for by Unique), are unclear and confused. This confusion in corporate structure further impairs the
operations of Unique and the potential sale of assets. For example, CBK Future’s, Inc. has and continues
to operate at a significant financial loss. Historically, Unique has funded those losing operations, and
CBK Ventures continues to request that it do so. However, as the entities are constituted, it does not
appear that Unique has any financial obligations to or on behalf of CBK Ventures, and should not be
funding its losses.
Finally, the Receiver has transferred the payroll the substantial employee payroll operations to
ADP for outside handling, as the payroll is approximately $15 Million yearly. This will ensure the timely
payment of all payroll taxes. The Debtor in Possession planned this filing for Monday, February 13, 2017
so that the employees were all paid current and there are no prepetition unsecured wage creditors.
Date: February 13, 2017 Respectfully submitted,
Bononi & Company, P.C. /s/ Eric E. Bononi Eric E. Bononi, Esq., CPA Court Appointed Receiver and Chief Operating Officer 20 N. Pennsylvania Avenue, Suite 201 Greensburg, PA 15601 724-972-4180 [email protected]
/s/ David K. Rudov David K. Rudov, Esq. Pa I.D. 35579 The Frick Building 437 Grant Street, Suite 1806 Pittsburgh, PA 15219 412-223-5030 [email protected] /s/ Scott M. Hare Scott M. Hare, Esq. Pa I.D. 63818 The Frick Building 437 Grant Street, Suite 1806 Pittsburgh, PA 15219 412-388-8632 [email protected] Proposed Counsel to the Debtor
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