Early Resignation Defeats 548 Action Says Former CEO
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September 08, 2022, US Bankruptcy Court for Central California – Defendant Robert Schenkkan (“Schenkkan”) moves the Bankruptcy Court of Central California to dismiss the complaint filed by Howard Grobstein, the Chapter 7 trustee (“Trustee”) for BTL Machine (“Debtor”). The motion is filed under Federal Rule of Civil Procedure 12(b)(6). The Trustee’s complaint alleges “breach of fiduciary duty”, “unlawful dividend,” and “fraudulent transfers” against Defendant. The primary allegation of the Trustee is that after the Debtor sold its operating assets, the Debtor allegedly transferred the remaining proceeds to or for the benefit of its shareholders “without reasonably equivalent compensation”. Schenkkan claims that he was allegedly no longer under the employment of the Debtors when the alleged transfers were made.
By background, Schenkkan claims that he was installed as the independent Chief Executive Officer (“CEO”) of the Debtor on the recommendation of the US Department of Defense. Schenkkan claims that his primary role as CEO was allegedly to oversee the sale of the Debtor’s assets to Acromil, LLC, which transaction closed on or about August 29, 2018. Schenkkan allegedly resigned from all his positions with the Debtor and went to work for Acromil, LLC by September 1, 2018. According to the motion, Schenkkan was allegedly not involved in any post-closing transfer. Defendant Schenkkan claims that he allegedly did not owe any fiduciary duty to the creditors of the Debtor at the time of the alleged transfers since he allegedly had already resigned from all his positions with the Debtor by that time. Schenkkan claims that the Trustee allegedly fails to state any facts showing the involvement of Schenkkan in any of the alleged transfers. Schenkkan pleads for a complete dismissal of the Trustee’s complaint without any leave to amend.
Grobstein v. Catherine Marie Goodrow, (In re BTL Machine), AP No. 22-01060, US Bankruptcy Court for Central California