Trustee Seeks Recovery of Alleged Subsequent Transfers to Charities
Download the full pdf of the complaint by clicking: here
August 30, 2022, US Bankruptcy Court for Eastern Virginia – Richard Arrowsmith, in his capacity as Liquidating Trustee (the “Trustee”) of the HDL Liquidating Trust, brings adversary proceedings against forty Defendants to recover alleged subsequent “fraudulent transfers” made to these Defendants. The Debtors include Health Diagnostic Laboratory, Inc., Central Medical Laboratory, LLC, and Integrated Health Leaders, LLC.
By background, Health Diagnostic Laboratory, Inc. (“HDL”) was formed as a start-up laboratory in Richmond, Virginia, offering a panel of blood tests for early detection of cardiovascular disease, diabetes, and related illnesses.
The Trustee claims that HDL’s “insiders” and other individuals and entities associated with the HDL “insiders” allegedly relied on “improper and illegal” business practices, which allegedly caused significant harm to HDL and its creditors. The Trustee alleges that Robert Bradford Johnson (“Johnson”) was one of the alleged “insiders” of HDL. Johnson was allegedly a shareholder of HDL and a principal and alleged “insider” of BlueWave Healthcare Consultants, Inc. (“BlueWave”), HDL’s exclusive sales agent and marketing consultant.
On September 8, 2021, the District Court for Eastern Virginia entered a summary judgment against BlueWave in the amount of $220,336,247.91 (the “avoided fraudulent transfers”) on account of the Trustee’s fraudulent conveyance claims.
The Trustee alleges that Johnson allegedly received numerous transfers from BlueWave out of the pool of the avoided fraudulent transfers. The Trustee further claims that the Defendants allegedly received proceeds or value of the avoided fraudulent transfers in the form of “gifts”, “charitable contributions”, or other transfers from Johnson. The Defendants allegedly did not take the alleged “subsequent transfers” from Johnson for value.
The Trustee seeks to recover the amount of the “subsequent transfers” allegedly made to the Defendants under §550 of the Bankruptcy Code.
In re Health Diagnostic Laboratory, Case No. 15-32919, US Bankruptcy Court for Eastern District of Virginia.