Alleged $4M Fraudulent Transfer of Oaktree Medical Centre
September 17, 2021, District of South Carolina – Trustee John K. Fort for the bankruptcy estate of Debtor Oaktree Medical Centre, PC (“OMC”) charges multiple defendants for alleged “breach of fiduciary duty”, “violation of unfair trade practices”, “fraud”, “unjust enrichment”, and “fraudulent transfers”.
According to the complaint, OMC was a private pain management practice. Defendants were engaged as third-party officers, restructuring consultants, and professionals for the Debtor and its two sister entities. Specifically, the Defendants were hired to fix OMC as it was “failing to pay its debt”. The Trustee alleges that during their tenure, the Defendants succeeded only in paying themselves and substantially increasing the Debtor’s unsecured debt. It further claimed that even with complete financial, operational, and fiduciary control, the Defendants “did not attempt to coordinate a sale or refinance” of the Debtors or begin a corporate restructuring. Additionally, the Trustee argues that the Defendants paid out over $4 million in professional fees to themselves and those they utilized to “perpetuate their fraud”.
Through his complaint, the Trustee requests the Court to enter judgment in his favor and against Defendants, awarding actual, general, compensatory, incidental, exemplary, punitive, and consequential damages for Defendants’ “willful, malicious, wanton, or reckless conduct”. The Trustee also seeks to void the $4M fraudulent transfer, allegedly made from the Debtors to Defendants.