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Recent Cases

Bankruptcy Collection

As counsel to a Chapter 7 trustee, part of a bankruptcy estate, we obtained a judgment in federal court in an amount in excess of $9 million as against individuals who had signed guarantees. As part of this estate, we foreclosed on a mortgage which was owned by the Debtor and sold a partially developed shopping center at foreclosure sale. To date, we have collected over $2.5 million and paid creditors 75% of their claims. We are currently pursuing a fraudulent transfer action before the federal court to collect additional funds. We anticipate a distribution of 100% to creditors at the conclusion of this case.

Bankruptcy estate consisted of a portfolio of secured home improvement loans. Although the face value of this portfolio exceeded $2 million, most of the loans were old and non-performing. After investigation and analysis, we determined that many of the loans were barred by the applicable Statute of Limitations. Since many of the loans were subordinate to first and second mortgages, and in most cases, there did not appear to be much equity in the properties, we elected to bring action on the notes only for those matter which were not otherwise time barred. Some of the cases had to be discontinued because we learned that in some cases, the underlying renovations had never been done.

Breach of Contract

Customer of our client files for bankruptcy. Bankruptcy Trustee asserts claim against client for $100,000.00 for rebates which client previously provided to customer prior to bankruptcy. We successfully negotiated a settlement of 10% of the Trustee’s claim.

Money Recovery – Fraud

Client delivered $380,000 of merchandise to several jointly owned pharmacies and received a check. Client learned that payment of the check was stopped and that each pharmacy was sold under the bulk transfer provisions of the UCC. Client was offered 10% by a workout manager, which was accepted by all of the other creditors. We commenced a suit in Federal Court against the former owner under theories of fraud, and in State Court against one of the pharmacies successors in that they had failed to comply with the bulk sales provisions. As a result, our client recovered 100% of its money, plus interest.

Mechanic’s Lien

Client provided labor and materials to a foreign diplomatic mission. After the work was complete, the mission did not pay a balance of approximately $80,000.00. Client could not place a Mechanic’s Lien on the property since, as a foreign diplomatic mission, the property is treated as if it were located in its foreign country. We commenced an action in Federal Court. We also contracted the Department of State and arranged to sell them our judgment for face value and interest once obtained. The matter was settled for the full amount of the principal plus one-half of the outstanding interest.

Bankruptcy

Client owned and operated a group of local community newspapers. Due to the economy, client’s revenues dropped substantially. We filed a bankruptcy proceeding under Chapter 11 for our client. A large, well funded company purchased the business during our client’s reorganization efforts. The principal of our client was awarded a multi-year employment agreement to run the new revitalized corporation.

Creditor Protection

Client hired an investment advisor to handle his personal and business retirement funds totaling over $4 million. The investment advisor filed bankruptcy and sought to discharge the obligations to client. Investment advisor was unable to account for the client’s portfolio of investments. We commenced proceedings on behalf of our client before the bankruptcy court, and as a result, negotiated a significant settlement on behalf of our client of 80% of his investment.

In re: Schultz, 250 B.R. 22 (E.D.N.Y. 2000)

We represented a bankruptcy trustee who sought to recover the interest in good will of the debtor’s accounting practice. The Trustee was awarded judgment representing the estate’s interest in the goodwill and going concern value of the debtor’s sole proprietorship accounting practice, even though goodwill was attributable mainly to the debtor’s professional efforts.

In re: Akdogan, 204 B.R. 90 (E.D.N.Y. 1997)

We represented the debtor whose debt arose from the use of an unsolicited and pre-approved credit card. In order to have the debt declared nondischargeable, the creditor was required to set forth sufficient evidence of a misrepresentation by debtor upon which it relied. To establish justifiable reliance, the court found that the creditor had to demonstrate that it conducted a credit check of defendant or that credit was not extended blindly. Since the creditor did not conduct any investigation prior to extending credit, it could not demonstrate actual or justifiable reliance.

Timmerman v. Board of Managers of the Anchorage Condominium, 212 A.D.2d 523, 622 N.Y.S.2d 320 (A.D. 2nd, 1995)

We represented the aggrieved unit owners. Members of the board of directors were held personally liable for their bad faith activities by acting outside their scope of authority as board members. As a case of first impression, the court applied the “business judgment” rule, usually used for corporate boards, as the standard of review as to whether the board members acted outside their authority.

Promotions Unlimited Corp. v. DD Pharmacy Corp., 258 A.D.2d 144,695 N.Y.S.2d 25 (A.D. 1nd Dep’t., 1999). (Decision of the Day, N.Y.L.J.)

We represented the vendor who supplied goods to a pharmacy. The court assessed successor liability on the purchaser of the assets of the pharmacy where the seller failed to comply with the requirements of the bulk transfer provisions of Article 6 of the UCC.

Electronic Services International v. Silvers, 284 A.D.2d 367, 726 N.Y.S.2d 441 (A.D. 2nd Dep’t., 2001)

We represented a bankruptcy trustee who sought to recover damages on behalf of the debtor’s estate. In a reversal of the trial court, the appeals court found that the plaintiff properly establish its damages by providing a witness with actual knowledge of the transactions where the documentation was no longer available.

Rozzo v. Rozzo, 274 A.D. 2d 53, 712 N.Y.S. 2d 137 (A.D. 2nd Dep’t., 2000). (Decision of the Day, N.Y.L.J.)

We represented the non-defaulting spouse. The court ruled that post-judgment discovery provisions could be used against a defaulting spouse in a matrimonial action.