Cathay Bank Sued for $1.1M in 41-23 Haight Realty Inc. Bankruptcy
December 6, 2021, Eastern District of New York – The Official Committee of unsecured creditors of 41-23 Haight Realty Inc., a/k/a 41-23 Haight Street Realty, Inc., files a $1.1 million lawsuit against Cathay Bank for avoidance and recovery of alleged “preferential transfers” and “fraudulent conveyances”, “unjust enrichment”, and “consequential damages.” The Committee brings this action to recover the transfers at issue under a real estate development “scheme,” allegedly perpetrated through Haight Realty by its “insiders.” In addition, the Committee “accuses the insiders of substantially aiding, helping, and sustaining the massive fraud perpetrated against the creditors of Haight Street’s estate.”
The Committee contends that the bank allegedly “benefited from the insiders’ exploitation of the real estate development scheme.” Specifically, the Committee contends that the defendant bank allegedly received approximately $1,151,500.00 in avoidable transfers from Haight Realty and these funds were “funneled off Haight Realty’s account for purposes other than developing the latter’s real estate project.” The complaint asserts that the bank allegedly has been “wrongfully and unconscionably benefited” from the receipt of money from Haight Realty and “did not provide fair value in good faith.” The Committee also argues that the bank received these monies only as a result of perpetuating and participating in a “fraudulent scheme” that they were allegedly aware of or should have detected had they not been “willfully blind.”
Through its complaint, the Committee seeks the return of the alleged transfers or its value as well as the disgorgement of all funds, properties, and assets by which the bank was “unjustly enriched” pursuant to N.Y. Debt. & Cred. sections 273, 278, and/or 279, and Bankruptcy Code sections 544(b), 550(a), and 551
In re 41-23 Haight Street Realty, Inc. a/k/a 41-23 Haight Street Realty, Inc.,Case No. 19-43441-nhl. Honorable Judge Nancy Hershey Lord is overseeing the bankruptcy case.