Debtors’ Estate Has “Equitable Title” in RiverCliff Property, Alleges Trustee Stephen W. Rupp
November 12, 2021, District of Utah – Trustee Stephen W. Rupp and Cosimo Borrelli, and Meade Malone (the “Plaintiffs”) initiate an adversary proceeding against RiverCliff Farm, Inc. (“RFI”) for the avoidance of “fraudulent transfers” and “security interest” under Sections 544, 546 and 548 of the Bankruptcy Code in the bankruptcy case of Heng Cheong Pacific Limited, World Wide Investment Services Limited and New Centuries Properties Limited ( “Debtors”). The Plaintiffs seek to avoid and recover “fraudulent transfers” related to RiverCliff Property—including the monies allegedly transferred from the Debtors to RFI and “used to purchase and improve the property”.
As stated in the complaint, the proceeding arises against the backdrop of an “investment scheme” that allegedly defrauded foreign investors out of tens of millions of dollars. The Plaintiffs seek to substantively consolidate RFI, which was “used to purchase and improve” the RiverCliff Property on behalf of and by using “fraudulently-derived funds” from the Debtors. Through its complaint, the Plaintiffs seek determination whether the proceeds from the sale of the RiverCliff Property constitute property of the bankruptcy estates and should be made available to the Plaintiffs for administration in the Chapter 7 cases or should be solely available to pay the tax debt of non-Debtors. The Plaintiffs also seek declaratory relief that the Debtors’ estate holds the equitable title in the RiverCliff Property either through a “constructive trust” or, in the alternative, an “equitable lien”.
In re Heng Cheong Pacific Limited, World Wide Investment Services Limited and New Centuries Properties Limited, Bankr. No. 21-21115