IPS Liquidating Trust Seeks to Clawback $1.7 Million in Alleged Fraudulent Transfers From The Freight Rate Company
July 30, 2021, Middle District of Florida – Plaintiff, Alex D. Moglia, in his capacity as the liquidating Trustee for the IPS Liquidating Trust, as the successor to Debtor, IPS Worldwide, LLC and its bankruptcy estate initiates an adversary proceeding against The Freight Rate Company, LLC (‘Defendant’) to recover about $1.7 Million in alleged fraudulent transfers under Sec. 548 of the Bankruptcy Code.
IPS provided global freight payment industry services, including freight audit and payment solutions, logistics and carrier contract management, and international transportation management. Defendant utilizes a web-based platform for its small to mid-size commercial clients to manage their transportation and freight shipping logistical needs.
The Trustee claims that IPS made a series of transfers directly to Defendant or on its behalf for legal services (paid to Upchurch, Bailey & Upchurch, P.A.), accounting fees (paid to Klayer and Associates, Inc.), and additional operating expenses. In its complaint, the Trustee alleges that within two years before the Debtor’s bankruptcy, Debtor transferred about $723,974.97 to or for the benefit of Defendant, managed and operated by an “insider” of the Debtor. The Trustee further contends that IPS made these transfers with the “actual intent” to hinder, delay or defraud present and future creditors of IPS and hence they are avoidable under 11 U.S.C. §548(a)(1)(A). The Trustee also asserts that within four years before the petition date, IPS transferred about $1,706,809.07 to assist Defendant to continue its operations according to the lending agreement between the parties. Allegedly, the IPS “received no fair consideration” in exchange for the said transfers.
The Trustee urges the Court to enter judgment against Defendant in the sum of $1,706,809.07 for “breach of the lending agreement” and for recovering the value of the “fraudulent transfers” under §550, and grant such other and further relief as the Court deems just and proper.