Somerset Trust Seeks Dismissal of Trustee’s $600k Fraudulent Transfer Action
September 9, 2021, District of Pennsylvania – Defendant, Somerset Trust Company (“Bank”) seeks to dismiss Trustee Robert Shearer’s complaint to avoid and recover transfers worth $625,000 as “fraudulent transfers”.
Last month on August 9, 2021, Trustee Robert Shearer for the bankruptcy estate of SRG Cranberry, LLC, initiated an adversary proceeding against Defendant Bank, alleging that the transfer to Somerset constitutes a “fraudulent conveyance” under Sections 544, 548, and 550 of the Bankruptcy Code. The Trustee also brought “unjust enrichment” and “breach of fiduciary duty” claims against Defendant and its principals. The Bank argues that all counts of the Trustee’s complaint be dismissed, in their entirety, according to Fed. R.Bankr. P.7012 and Federal Rule of Civil Procedure 12(b)(6) for “failure to state a claim” upon which relief may be granted.
Specifically, the Defendants allege that the Debtor “received reasonably equivalent value” in exchange for the transfer because the transfer was made “on account of antecedent debt” for which the Debtor was liable, thereby reducing Debtor’s liability to the Bank on a dollar-for-dollar basis. Defendant further alleges that the complaint does not state any facts relating to insolvency and offers only “labels and conclusions” or “a formulaic recitation of the elements of a cause of action”.
The case is In re SRG Cranberry, LLC, Case 21-02083-JAD in the United States Bankruptcy Court for the Western District of Pennsylvania