Broker challenges sale of Gorell
A broker contends PNC Bank is cheating it out of $275,000 in finder's fees and is asking a judge to halt the pending sale of Gorell Windows & Doors as a way to force the bank to pay up.
The court action is connected to Gorell's insolvency; its ensuing placement into receivership; and work the broker, investment banking firm Anderson LeNeave & Co., of Charlotte, N.C., had done on behalf of Gorell and, in essence, Gorell's chief lender, PNC.
Gorell was placed into receivership last month because it could not repay roughly $10.5 million in loans and fees owed to PNC. As a result, the White Township replacement window manufacturer is being sold to another company, Soft-Lite LLC, which will allow PNC to recover some of its money.
Anderson LeNeave argues the sale took place only because of its efforts, and despite promises, PNC is now refusing to pay the firm for its work.
"Anderson LeNeave has been instrumental in effecting the sale to Soft-Lite, and PNC … would not have the benefit of Soft-Lite's offer but for Anderson LeNeave's efforts in connection with its engagement," the firm stated in a court petition filed Monday in Allegheny County.
So, it wants the judge presiding over Gorell's receivership either to stop the sale -- and for that matter, a sale to any of the other companies that had bid on Gorell by way of Anderson LeNeave -- or to revise the court order that placed Gorell into receivership in such a way that that firm will be guaranteed payment for its work.
It's not clear if the firm's request will affect the Gorell sale's timeline. Soft-Lite, also a replacement window maker, reached a handshake agreement to acquire Gorell's assets on Feb. 15, but the deal has yet to be finalized.
The firm said in the petition it believed the deal's closing was imminent. The judge in the case, Allegheny County Court of Common Pleas Judge Christine A. Ward, isn't taking the matter up until a March 14 status conference.
Gorell's receiver, Margaret Good, of The Meridian Group, did not return a phone call seeking comment. Neither did Roy Anderson, Soft-Lite's president and owner.
Anderson LeNeave's involvement with Gorell began in July, when it signed an agreement with the company to look for a buyer or someone to refinance its debt, according to court papers. Though it technically was working for Gorell, Anderson LeNeave said it essentially was working for PNC because the proceeds arising from a sale would benefit no one other than PNC. The firm also said PNC even required an approval meeting in which bank officials gave an OK for Gorell to work with the firm.
"At all times, PNC treated Anderson LeNeave as its agent in connection with its brokerage services rendered on behalf of Gorell by requiring Anderson LeNeave's call logs, summaries of offers, copies of offers, periodic updates and meetings and reports from Anderson LeNeave regarding progress in selling (Gorell's) assets," according to the petition.
The firm said that, as a result of its efforts, it found three potential buyers for Gorell, including Soft-Lite.
Anderson LeNeave said that, all along, the understanding was PNC would pay the firm through proceeds of the sale. And, it said, that understanding was supposed to have been formalized through the court order placing Gorell into receivership.
A clause guaranteeing the firm's payment had been written into a draft version of the court order, but PNC omitted the clause in the final version it asked the court to approve, the broker contends. Now, despite six months of assurances that payment would be made, PNC has reneged on the promise, the firm said.
"In this case, but for the work of Anderson LeNeave under the terms of the brokerage agreement that was approved of by PNC, the receiver and PNC would not have the benefit of the offer from Soft-Lite. Anderson LeNeave continued to work in light of repeated assurances by PNC that its finder's fee would be paid. Now PNC is attempting to use the receivership proceeding as a means to gain the benefit of Anderson LeNeave's work without having to pay the agreed compensation," according to the court petition.