Vetting’s Alleged Security Interest Is Avoidable As “Fraudulent Transfer”, Argues Work Cat Florida Trustee
December 1, 2021, Middle District of Florida – The trustee overseeing the bankruptcy case of Work Cat Florida LLC (formerly, Work Cat Trans Gulf, LLC) charges Vetting, LLC with a lawsuit for the avoidance of alleged security interest on Work Cat’s property and to recover transfers worth $2 Million as alleged “preference” and “fraudulent conveyances.”
In its complaint, Trustee Douglas N. Menchise contends that Vetting allegedly lent about $2 million to Work Cat’s parent company, WCTG Holdings, LLC, in exchange for a security interest in Work Cat’s property. The trustee argues that Work Cat allegedly “did not receive any consideration in exchange” for granting the security interest to Vetting. Hence, Menchise asserts that Vetting’s alleged security interest in any of Work Cat’s assets should be avoidable as a hypothetical judicial lien creditor under Section 544(a)(1) and § 548(a)(1)(B) of the Bankruptcy Code.
Menchise further argues that since Vetting allegedly perfected the security interest six months after making the loan to the WCTG and six months before Work Cat filed for bankruptcy, the transfer is also avoidable as an alleged preference. Additionally, Menchise alleges that since Vetting is also an equity owner of WCTG, any transfer made by and between WCTG and Vetting was allegedly made to Work Cat’s “insider.” Menchise also contends that Vetting allegedly entered the transaction sub judice in “bad faith and for its own benefit -i.e., money lent to itself” -all of which allegedly “provides an unfair advantage” to Vetting in this bankruptcy case.
Accordingly, the trustee requests the court to enter a judgment against Vetting, determining that the alleged security interest or its late perfection is avoidable as a “fraudulent and preference transfer” under §§§ 544, 547, and 548.
IN RE: WORK CAT FLORIDA LLC f/k/a WORK CAT TRANS GULF, LLC, Case No.: 8:21-02588-CPM