May 23, 2022, US Bankruptcy Court for the Southern District of Florida – Ross R. Hartog, Chapter 7 trustee (“Trustee”) of the estates of the Debtors, SOS Furniture Company, Inc. (“SOS”) and Mattress One, Inc. (“M1”), sues United Corporation (“United”) and Fathi Yusuf Mohamad Yusuf (“Yusuf”) (collectively “Defendants”) to avoid and recover alleged fraudulent transfers, and seeking subordination of proof of claim filed by United.
The complaint alleges that 2012 onwards, SOS and United owned a joint venture in the name of Mattress Pal Holding LLC, operated by Yusuf and his family. The alleged joint venture agreement allowed United and SOS to hold 50% shares each in Mattress Pal Holding LLC.
The Trustee claims that from December 2016, the Debtors were balance sheet insolvent. On December 17, 2016, United and SOS allegedly executed a one-page $17,000,000 agreement entitled “Mattress Pal Purchase Agreement”. The Trustee argues that SOS paid $1,020,000.00 as first annual installment payment due and owing from SOS to Defendants under the Mattress Pal Purchase Agreement. The allegations emphasize that SOS ceased any further payments to Defendants after it allegedly discovered certain material “irregularities” as the result of an investigation of Mattress Pal’s books and records.
The Trustee aims to avoid and recover $1,020,000.00 as an alleged “fraudulent transfer” and to avoid certain obligations incurred by SOS to United under the Mattress Pal Purchase Agreement. The Trustee also seeks disallowance of claims of United in whole or in part and subordination of all claims of United to the claims of all other non-priority, unsecured creditors in this case.
Ross R. Hartog v. United Corporation and Fathi Yusuf Mohamad Yusuf (In re SOS Furniture Company, Inc.), AP No. 22-1167, US Bankruptcy Court for the Southern District of Florida.
Share
United Corporation Faces $1.02m Clawback Suit in SOS Florida Bankruptcy Case
By roland jones
rgj@rolandjones.com
Jones & Associates
United Corporation Faces $1.02m Clawback Suit in SOS Florida Bankruptcy Case
Comerica Bank Faces $10.2M Claw Back in Girardi Keese Bankruptcy
Debtor Sues Former Chief Restructuring Officer for Breach of Fiduciary Duty
Liquidators Seek Claw Back of $700M for Alleged Fraud
Girardi Keese Trustee Files a Cluster of Lawsuits to Clawback Millions
Energy Company Seeks to Wrest Asset Sale Proceeds from Trustee
Trustee Seeks to Recover $6.5 M Fraudulent Conveyances from Alleged Insiders
Investors Sue Debtor’s Alleged Insiders for Fraudulent Conduct
Trustee Files Action to Clawback Alleged Non-Debtor Loan Repay
May 23, 2022, US Bankruptcy Court for the Southern District of Florida – Ross R. Hartog, Chapter 7 trustee (“Trustee”) of the estates of the Debtors, SOS Furniture Company, Inc. (“SOS”) and Mattress One, Inc. (“M1”), sues United Corporation (“United”) and Fathi Yusuf Mohamad Yusuf (“Yusuf”) (collectively “Defendants”) to avoid and recover alleged fraudulent transfers, and seeking subordination of proof of claim filed by United.
The complaint alleges that 2012 onwards, SOS and United owned a joint venture in the name of Mattress Pal Holding LLC, operated by Yusuf and his family. The alleged joint venture agreement allowed United and SOS to hold 50% shares each in Mattress Pal Holding LLC.
The Trustee claims that from December 2016, the Debtors were balance sheet insolvent. On December 17, 2016, United and SOS allegedly executed a one-page $17,000,000 agreement entitled “Mattress Pal Purchase Agreement”. The Trustee argues that SOS paid $1,020,000.00 as first annual installment payment due and owing from SOS to Defendants under the Mattress Pal Purchase Agreement. The allegations emphasize that SOS ceased any further payments to Defendants after it allegedly discovered certain material “irregularities” as the result of an investigation of Mattress Pal’s books and records.
The Trustee aims to avoid and recover $1,020,000.00 as an alleged “fraudulent transfer” and to avoid certain obligations incurred by SOS to United under the Mattress Pal Purchase Agreement. The Trustee also seeks disallowance of claims of United in whole or in part and subordination of all claims of United to the claims of all other non-priority, unsecured creditors in this case.
Ross R. Hartog v. United Corporation and Fathi Yusuf Mohamad Yusuf (In re SOS Furniture Company, Inc.), AP No. 22-1167, US Bankruptcy Court for the Southern District of Florida.
Related posts: