Bobak Sausage Co. v. Bobak Orland Park, Inc., No. 06 C 4747, Slip Op. (N.D. Ill. Nov. 3, 2008) (Kennelly, J.).*
Judge Kennelly denied without prejudice plaintiff Bobak Sausage Co.’s ("Bobak") motion to compel defendant’s interest in Bobak Fifty Third Street LLC (“Bobak 53”). Bobak makes and sells meat products and operates a related restaurant in Chicago. Bobak’s founder, Frank Bobak, transferred ownership of Bobak’s to his sons. In early 2006, Bobak’s reorganized, leaving two of the sons owning Bobak’s and a third, defendant, owning a grocery store that Bobak’s had been building. All of the brothers maintained as interest in Bobak 53. As part of the reorganization, Bobak’s granted two entities rights to use Bobak’s trademarks at retail locations for a six month period. After the six month period ended, Bobak’s filed suit against defendants (including the third son and the licensed retail locations) for, among other things, trademark infringement based upon the continued use of the Bobak’s marks. The parties settled that dispute based at least in part upon a stipulated permanent injunction, which the Court entered, setting various limits on what marks each defendant could use, requirements that the defendants remove and change their signage and requirements that defendants use disclaimers that they were not affiliated with Bobak’s. The Court later held certain defendants in contempt for violating the permanent injunction and entered a remedial fine of $150,000. When defendants failed to pay the fine, the Court added interest to it.
Because defendants continue not to pay the fine, Bobak moved the Court for an order compelling the transfer of defendant’s interest in Bobak 53 pursuant to Fed. R. Civ. P. 69(a) and 70. The Court, however, held that Rule 70 only allows for enforcement of money judgment in very narrow circumstances, circumstances that were not yet met in this case.
Rule 69(a) allows for a writ of execution in accord with the rules of the state where the court is located, Illinois in this case. Illinois law says that the debtor’s property delivered for repayment is to be sold by the sheriff at public auction. But because defendant’s interest in Bobak 53 is relatively non-liquid – plaintiffs, the other owners of Bobak 53, retain substantial sale over any sale or subsequent sale. The restrictions on ownership and sale of Bobak 53 make a public sale impractical. But the Court could order that any distributions be paid to plaintiff. The Court, therefore, denied plaintiff’s motion without prejudice. But the Court also ordered defendant to show cause why the Court should not appoint a receiver for defendant’s interest in Bobak 53 and enjoin the state court proceedings regarding Bobak 53.
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