The Voice of the Martyrs “Did Not Take “Subsequent Transfers For Value”, Alleges HDL Liquidating Trust
December 22, 2021, Eastern District of Virginia – Trustee Richard Arrowsmith, of the HDL Liquidating Trust, brings a complaint against an international non-profit organization, The Voice of the Martyrs, Inc., to recover avoidable “fraudulent transfers” allegedly received from a “subsequent transferee”, under section 550(a) in the bankruptcy case of the Health Diagnostic Laboratory, Inc. (HDL) et al.
The complaint asserts that HDL’s “insiders” and other individuals and entities associated with it allegedly “relied on improper and illegal business practices”, which allegedly caused significant harm to HDL and its creditors. Adding further, the complaint alleges that HDL’s “insider”, Johnson, was also a principal and “an insider” of HDL’s exclusive sales agent and marketing consultant, BlueWave Healthcare Consultants, Inc. Earlier, the District Court had issued a summary judgment against BlueWave for $220,336,247.91 on account of Arrowsmith’s “fraudulent conveyance” claims pursuant to sections 544 and 548 of the Bankruptcy Code.
In its complaint against the defendant, Arrowsmith alleges that Johnson was an initial, immediate, and mediate transferee of numerous transfers from BlueWave and that the defendant allegedly benefited from the avoidable “fraudulent transfers” by receiving proceeds or value in the form of gifts, charitable contributions, or other transfers from Johnson. Precisely, the Trustee alleges that BlueWave was the initial transferee of the avoided “fraudulent transfers”, Johnson was an immediate transferee of the initial transferee, and the defendant is a mediate transferee for the alleged transfers. Thus, the Trustee contends that the defendant did not take the disputed transfers for value and must return them as they are allegedly the property of the Debtors’ bankruptcy estates under sections 541 of the Bankruptcy Code.
In re Health Diagnostic Laboratory, Inc. et al., Richard Arrowsmith as Liquidating Trustee of the HDL Liquidating Trust v. The Voice of the Martyrs, Inc.) Case : 21-03128-KRH