Operating Engineers' Local 324 Fringe Benefit Funds v. Demrex Industrial Services, Inc. et al

Filing 68

ORDER Directing Defendants to Provide Accounting Information and Setting ( Telephone Conference for 9/12/2012 10:00 AM before District Judge Robert H. Cleland) (See order for additional dates) Signed by District Judge Robert H. Cleland. (LWag)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

OPERATING ENGINEERS’ LOCAL 324
FRINGE BENEFIT FUNDS and TRUSTEES
OF THE OPERATING ENGINEERS’
LOCAL 324 FRINGE BENEFIT FUNDS,
Plaintiffs,
v.

Case No. 10-15072
Hon. Robert H. Cleland

DEMREX INDUSTRIAL SERVICES, INC.,
ALTCHEM ENVIRONMENTAL SERVICES,
INC., BARRY C. PORTNOY, JASON
GOLDBERG and MARC G. BAILEY,
Defendants.
__________________________________/
ORDER DIRECTING DEFENDANTS TO PROVIDE ACCOUNTING INFORMATION
On July 2 and July 24, 2012, the court conducted telephone conferences with
counsel for the parties during which production of financial records was addressed. The
parties presented their positions with respect to information Defendants1 provided to
Plaintiffs pursuant to this Court’s April 4, 2012 Order.

After reviewing the parties’

positions and concluding that Defendants must provide additional access to Plaintiffs of
their financial records,
IT IS ORDERED that Defendants shall produce, on or before August 29, 2012,
the following records to Plaintiffs through a compressed zip file or compact disk of
equivalent utility, with reports printed using a standard Sage system.report form, for

_________________
1

This action is stayed as to Demrex Industrial Services, Inc. (“Demrex”) as a result of its Chapter 11
bankruptcy proceeding initiated on December 9, 2011 in the United States Bankruptcy Court for the Eastern District
of Pennsylvania, Case No. 11-19403. Consequently, “Defendants” refers to all Defendants except Demrex.

Demrex and Altchem for periods stated in the April 4, 2012 Order, to enable Plaintiffs to
analyze and review data at Plaintiffs' location:
1.

Demrex's Vendor Lists, such as Report 4-1-2-63, A/P Invoice List With
Payments, and Report 4-1-5-21, Vendor Payments, to investigate payments to
or for the benefit of Defendants or vendors associated with them. However,
Plaintiffs will not contact any vendor without a subpoena before providing
Defendants with the vendor's name and a purpose for which Plaintiffs would
contact the vendor, at which point Defendants will have 14 days to provide an
explanation to Plaintiffs. Then, Plaintiffs will not contact the vendor without a
subpoena unless they are not satisfied with Defendants' explanation and
Defendants authorize such contact. If the parties do not agree on whether
Plaintiffs should contact the vendor without subpoena, they will submit their
positions to the court for direction.

2. Payroll Reports with employee number of Jason Goldberg, to obtain Report 51-2-36, Payroll Check Register by Employee, for Mr. Goldberg, to the extent
such reports exist. If such reports do not exist Defendants will submit an
affidavit verifying their lack of existence.
3. The entire accounting databases, made available at Plaintiffs' location for
analysis and review to determine what caused Trial Balances and Income
Statements to be out of balance from the ends of years to the beginnings of
following years.
4. Individual 4-1-5-21 reports for Vendors 3, 394 and 449.
IT IS FURTHER ORDERED that Defendants will provide, on or before August

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29, 2012, Plaintiffs through remote access the General Ledger for Demrex to review
voided records, through read only access to Menu 1-3 of General Ledger Records, to
enable Plaintiffs to research the circumstances surrounding the voiding of 594 Job Cost
Records. Plaintiffs will provide Defendants with five full or partial days they are
available to engage in the remote access described above. Defendants will select one
of the proposed days to provide Plaintiffs with the access. Although the parties expect
that Plaintiffs can complete the necessary action to obtain the records described above
in less than one day of remote access, if Plaintiffs do not obtain records sought in one
day they will communicate with Defendants in order to select additional time to continue
the remote access.
IT IS FURTHER ORDERED that all other provisions of the April 4, 2012 Order
remain in effect except as modified by this Order.
Finally, IT IS ORDERED that counsel shall participate in a telephonic status
conference on September 12, 2012, at 10:00 a.m.

s/Robert H. Cleland
ROBERT H. CLELAND
UNITED STATES DISTRICT JUDGE
Dated: August 7, 2012
I hereby certify that a copy of the foregoing document was mailed to counsel of record
on this dateAugust 7, 2012, by electronic and/or ordinary mail.
s/Lisa Wagner
Case Manager and Deputy Clerk
[phone]

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