O.K. Cargo Corp Trustee Charges “Insiders” for Allegedly “Diverting” Debtor’s Money to “Pay Their Expenses and Non-Debtor Debts”
March 22, 2021, Southern District of Florida – Trustee Drew M. Dilworth sues Defendants DFS Services, LLC and Discover Bank, alleging that the “insiders (owner and co-owner) diverted the Debtor’s monies to pay their personal obligations as well as the debts of another company from the Debtor’s account.” The Trustee argues that transfers of such payments to the Defendants are “actually and constructively fraudulent” under the federal and state laws.
As per the papers filed in the Court, the Debtor’s president and secretary (owner and co-owner) had an equal 50/50 share in the Debtor. They allegedly ran another company in addition to operating the Debtor. Allegedly, from time to time, the “insiders paid the business debts of the other company from the bank account of the Debtor;” however, none of these payments or transfers supposedly benefited the Debtor. The Trustee also contends that the Debtor was paying for the “insiders’, their respective family members and related entities’ personal expenses” such as automobile insurance, rent, condominium fees, and credit card bills – all while allegedly receiving “no consideration” in cash or kind in return for these payments.
The Trustee requests the Court to award judgment in its favor under Sec. 544, 548, 550, and 552 of the Bankruptcy Code and Fla. Stat. Sec. 726.106 and 726.105