As Daryl Heller remains under pressure to come through with buyout payments for some 2,700 investors in his ATM network, Heller and his businesses owe others more than $25 million, including demands for $20 million from creditors and $5 million from the IRS for back taxes.
Since an ATM investor lawsuit was filed in late August over $80 million in missed monthly payments, banks and other creditors have filed numerous notices of judgments against Heller and his companies in the Lancaster County Court of Common Pleas.
The ATM investor lawsuit has been paused to give Heller a chance to buy out all the investors. But with deadlines slipping for actual payments, the investors' representatives have been threatening to resume litigation.
Yet for the judgments already filed against Heller and his companies, there won't be any litigation since they are the final say on each dispute, something akin to winning a lawsuit.
"A judgment is simply the court saying the plaintiff is right," said Peter Kraybill, a partner with Manheim Township-based Gibbel, Kraybill & Hess who is not involved in any of the Heller cases.
While creditors who win a judgment don't have to pursue any more litigation, they do have to try to enforce the ruling, Kraybill explained. To do that, they can use a variety of methods, such as putting a lien on someone's property, garnishing their wages or trying to seize their property. A creditor who wins a judgment can also negotiate directly with the debtor.
Until a judgment is satisfied it remains a standing, publicly-recorded obligation for payment that can affect someone's ability to get additional financing.
In a response to LNP - LancasterOnline's questions about the judgments, Heller said that they can be resolved once the payments are made to ATM investors.
"All these suits tie to ATMs and will go away with the ATM settlement," Heller said.
Heller did not address the federal tax lien which was filed in March for unpaid taxes in 2022.
Types of judgments
Many of the judgments against Heller did not result from litigation since they were triggered by provisions in commercial loan contracts.
In Pennsylvania, a "confession of judgment" is a clause that can be written into a commercial loan agreement or other contract. If the terms of the loan are violated, the provision allows a creditor to bypass litigation and immediately record a judgment.
"Since no judge is involved in the confessed judgment's recordation, there is a significant advantage to the confessing creditor in both the lack of significant potential for objection and also in the speed of having that judgment made of record against the debtor," Kraybill said.
The Federal Trade Commission has outlawed confessions of judgment in consumer loans, but Pennsylvania is one of 10 states that allows them in commercial loans. Four of the recently filed judgments against Heller and his companies, totaling $12.1 million, were from confessions of judgment.
Two of the judgments, totaling $1.5 million, resulted from litigation initiated in Lancaster County.
Two judgments, totaling $6.6 million, are "foreign judgments," meaning that they are notices filed in Lancaster Court of Common Pleas that judgments have been won against Heller or his companies in other jurisdictions.
Kraybill explained that a creditor would enter a "foreign judgment" in Lancaster County if they believe the debtor has assets here. All of Heller's companies, including Heller Capital and Paramount Management Group, are based in Lancaster city. He also owns a home in Bent Creek, a gated community in Manheim and East Hempfield townships.
One of the foreign judgments entered here against Heller is one for $6 million on behalf of Superior Group ATMs of Michigan. According to a lawsuit filed in Michigan, the company agreed to buy 250 ATMs from Paramount in April and then have Paramount manage them in exchange for monthly payments of $72,500 for seven years.
Superior alleged that Paramount didn't make the payments for the ATMS and then only made one monthly payment. In July, the parties agreed to a settlement of the case, but Paramount didn't make any of the settlement payments, according to the suit.
On Sept. 27, Superior Group ATMs got a judge to sign a consent judgment against Heller and his companies, which was then filed in the Lancaster County Court of Common Pleas on Oct. 14.
A separate lawsuit nearing its conclusion in New York could more than double the amount local court records show Heller or his companies owe. Silverview Credit Partners sued Heller and some of his companies in New York because of missed payments on $25 million worth of loans made in August 2023.
Silverview is now seeking a summary judgment in the case for $28.5 million.
Heller told LNP - LancasterOnline that like the other judgments which have been recorded in the Lancaster County Court of Common Pleas, the Silverview debt cannot be paid off until the ATM investors are paid. "We can't legally pay one and not the other," he said.