Trustee Allan B. Mendelsohn Seeks Declaratory Judgment to Recover Alleged “Fraudulent Transfers” in SRS Capital Bankruptcy Case
April 1, 2021, Eastern District of New York – Plaintiff Trustee Allan B. Mendelsohn for SRS Capital Funds, Inc. sues Defendant, Y.S.S.S. LLC to avoid and recover certain amounts allegedly transferred to the Defendant within four (4) years before the filing of the bankruptcy petition, as “fraudulent conveyances.”
An involuntary petition was filed against SRS Capital Funds on September 4, 2020. SRS is a leading capital investment firm. According to the complaint, YSSS had “no legitimate business purpose” and was allegedly created “to receive funds from the Debtor and disburse the funds without regard to the disposition of the funds paid.”
The complaint states that between November 2017 and October 2020, YSSS supposedly received certain transfers at its checking account in JPMorgan Chase Bank from various accounts maintained by the Debtor. The sole source of funds deposited into the YSSS bank account allegedly originated from the Debtor’s accounts and totaled $4,426,573.94.
Through its complaint, the Trustee seeks a declaratory judgment to “set aside” the transfers of $2,437,946.27 allegedly made by the Debtor to Defendant within two (2) years of the filing of bankruptcy under section 548 of the Bankruptcy Code. The Trustee further seeks a judgment against Defendant for $4,426,573.94 under sections 275 and 278 of the New York Debtor & Creditor Law and section 550(a) of the Bankruptcy Code. The Trustee argues that the alleged transfers were “impermissible transfers of Debtor’s interests in property” and the Defendant would be “unjustly enriched” if permitted to retain the transfers, as the Debtor “did not receive reasonably equivalent value” in exchange for the alleged transfers.