Clawback Suit Initiated Against Multiple Defendants for Turnover of Sale Proceeds under Section 541 of the Bankruptcy Code
August 3, 2021, Middle District of Florida – Plaintiff, Richard B. Webber II, as Trustee of the Estate of the AAA Real Estate Investment Services, LLC (‘Debtor’) accuses Defendant, RSD Advisory, LLC (“RSD”) to avoid and recover a post-petition transfer pursuant to Section 549(a) and Section 551 of the Bankruptcy Code; sues Debtor and its member, Andres Guerra (“Guerra”), for turnover of sale proceeds pursuant to Section 541 and Section 542 of the Bankruptcy Code; summons Defendant, Iron Building Florida LLC (“Iron”) to avoid and recover a “fraudulent transfer” pursuant to Section 548(a) and Section 551 of the Bankruptcy Code; and for emergency injunctive relief pursuant to Section 105 of the Bankruptcy Code.
The Trustee urges the Court to enjoin Debtor and Guerra, from using, dissipating, encumbering, transferring, or conveying real properties at issue pursuant to Section 105 of the Bankruptcy Code pending a determination on the merits of the underlying adversary proceeding. The Trustee alleges that the sale proceeds from the sales of the real properties post-petition are property of the estate pursuant to Section 541 of the Bankruptcy Code and must be returned to the estate. Further, the Trustee argues that the transfer of real property to Iron was “fraudulently concealed” by the Debtor on its statement of financial affairs and must be preserved for the benefit of the estate.