H2D Motorcycle Ventures Seeks $800,000 From Paradise Management Group LLC as Alleged Fraudulent Transfers
July 16, 2021, Eastern District of Wisconsin – Yesterday, Trustee Helen M. Ludwig for the bankruptcy estate of Debtor H2D Motorcycle Ventures, LLC instituted legal proceedings against Defendant Paradise Management Group LLC to avoid and recover alleged transfers worth $839,999.84, under 11 U.S.C. §§ 548(a)(1)(B), 544(b) and 550(a)(1), for the benefit of the Debtor’s estate. The Trustee also alleges that to the extent the Debtor was indebted to the Defendant, certain transfers to the Defendant would constitute “preferential transfers” which the Trustee sought to avoid and recover, under 11 U.S.C. §§ 547 and 550(a)(1), for the benefit of the Debtor’s estate.
According to the complaint, Eric Pomeroy and Sara Pomeroy (the “Pomeroys”) owned and managed the Debtor and Defendant. Allegedly, between March 2017 and February 2019, the Pomeroys “caused the Debtor to transfer” an aggregate of $839,999.84 to Defendant, even though Defendant was not indebted or otherwise obligated to Defendant. The Trustee asserts that at the time of the transfers, the Debtor was insolvent, possessed unreasonably small capital, and was unable to pay its debts as they matured. Accordingly, the Trustee claims that the alleged transfers constitute “constructively fraudulent transfers” which must be avoided as the Debtor made the alleged transfers from its bank account and did not receive reasonably equivalent value in exchange for the said transfers.
The Trustee also alleges that Defendant was an “insider” of the Debtor at the time of the disputed transfers because Defendant owned and controlled the Debtor. Additionally, both Defendant and the Debtor, through Defendant, were allegedly controlled by the Pomeroys. According to the Trustee, Defendant and the Debtor “did not conduct business at arm’s length” and the alleged transfers occurred solely on account of the Pomeroys’ control of the Defendant and the Debtor.
The case is In re H2D Motorcycle Ventures, LLC, Case No. 19-26914-beh. The law firm of Steinhilber Wanson LLP is representing the Trustee.
