Las Vegas Assisted Living Center Trustee Files Lawsuit to Avoid Lien, Alleges that Center Never Received Funds Secured by the Deed of Trust
August 16, 2021, District of Nevada – Trustee Ryan A. Andersen for the estate of Yong Kang Las Vegas Assisted Living Center, LLC commences a lawsuit against Defendant, Yujin Ren, to determine the validity, priority, and extent of a lien under Section 506(a) and FRBP 7001(2).
By way of background, Debtor took title and possession of two parcels of land in Nevada in 2016. More than two years after Debtor acquired the properties, Defendant recorded a deed of trust against the properties. Defendant allegedly intended to secure a $1,424,300.00 debt “to be owed by Debtor to Defendant Ren”. Debtor filed a voluntary petition for relief under chapter 7 of the Bankruptcy Code in March 2021. In its schedules, Debtor listed Defendant as a secured creditor with claims totaling $2,056,166.80. However, according to the Debtor, the funds allegedly secured by the deed of trust were “never received” by the Debtor and were instead received by Debtor’s principal in his individual capacity under a written loan agreement that was “never transferred to or assumed by” Debtor.
The Trustee argues that no loan agreement existed between Debtor and Defendant Ren and, hence the Debtor “failed to receive reasonably equivalent value” for the deed of trust. The Trustee further argues that the deed of trust was recorded three years before the petition date and, hence the Debtor “fraudulently transferred” a lien interest in the properties within the four years preceding the petition date. Accordingly, the Trustee requests a judgment in its favor and, against Defendant Ren avoiding the deed of trust and rendering it void and unenforceable.