In rulings that pleased both sides in the Athlete's Den business war, a judge has refused put the business in receivership but ordered its new owners to pay its old owners about $30,000 by Saturday.
State Supreme Court Justice Joseph D. Mintz Tuesday directed Red-Teks Industries Inc., owner of the chain since September, to "comply with contract terms" for the approximately $195,000 it still allegedly owes Albert and Nancy Franjoine for the 20-year-old athletic footware and clothing chain.
Kenneth W. Africano, attorney for the Franjoines, said he was "pretty pleased" with the judge's ruling and is waiting to see if Red-Teks makes the court-ordered payment by Saturday.
Cheryl Smith Fisher, attorney for Red-Teks, also said she "pleased" by Mintz's rulings because putting the business in receivership, as the Franjoines unsuccessfully demanded, "would have put us out of business."
Mintz rejected the Franjoines' request for immediate appointment of a temporary receiver to handle the chain's finances, and also rejected efforts by Red-Teks to get a dismissal of the lawsuit the Franjoines filed earlier this month.
Ms. Fisher said the judge's rulings gives Red-Teks a chance "to continue to press our claims for an offset to the amount we owe" the Franjoines on the sale of the chain. Without going into details, Ms. Fisher said Red-Teks owes the Franjoines "something less than" the nearly $200,000 they are demanding.
Mintz directed the new owners Tuesday to pay off the Franjoines by the end of this year.
Africano said that under the Mintz rulings, the new owners of the chain, headed by Tim Heider and his wife, Sara Brewster, also have to make another payment of between $30,000 to $35,000 to the Franjoines by May 1.
In a lawsuit the Franjoines filed this month, they accuse Heider, his wife and Red-Teks' investors of defaulting on payments linked to the September sale of the business and its inventory.
The Franjoine lawsuit also alleges the Heiders have made fraudulent transfers of funds from Athlete's Den accounts to their personal accounts.
Mintz ruled that if the April and May payments aren't made, the Franjoines can come back to court and he will reconsider their request for appointment of a court-named receiver to oversee the financial dealings of their former chain.
Red-Teks recently closed an Athlete's Den store on Delaware Avenue in Buffalo, leaving the chain with four suburban locations. Under the Franjoines, the chain once had eight stores and a mail-order business.