Company can set aside property transfer under recent court decision.The law firm Hahn & Hessen LLP LLP - Lower Layer Protocol announced that it has won a contentious fraudulent conveyance A transfer of property that is made to swindle, hinder, or delay a creditor, or to put such property beyond his or her reach. For example, a man transfers his bank account to a relative by putting the account in the relative's name. action on behalf of its client Insilco Corp. The decision, rendered after a trial in the Supreme Court of the State of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , will enable Insilco to set aside the transfer of a five story building at 591 Park Avenue. The case arose out of a $15 million note given to Insilco by defendant Star Services, Inc. of Delaware, a company organized by Peter DeGeorge. When the note was about to come due, Star conveyed the Park Avenue property to PRD PRD progressive retinal degeneration. Holdings Inc., another DeGeorge company. At the time of the transfer, the Park Avenue Property was subject to a mortgage, initially held by Westpac and subsequently assigned to Peter DeGeorge's brother. PRD took the Park Avenue Property free and clear, and Star had no assets to pay Insilco. Although Insilco obtained summary judgment against Star for payment of the note in 1999, for over $21 million, the judgment remains totally. unsatisfied to date. In this case, Insilco proved at trial that Star was insolvent at the time of the transfer, that the transfer was less than an arm's length transaction Arm's Length Transaction A transaction in which the buyers and sellers of a product act independently of each other and have no relationship to each other. Notes: Such a transaction is absent of any pressure sales tactics or relationships among the various parties. , made in bad faith, and that the consideration for the transfer was grossly inadequate. Insilco also proved that the transfer was made with actual fraudulent intent. Based on these and other factors, the court found the transfer of the Park Avenue Property was both an actual and constructive fraud. As a result, the transfer will be set aside and subject to Insilco's claim. The court reached the correct conclusion," said John P. McCahey, a litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. partner at Hahn & Hessen LLP, and counsel to Insilco in this case. "This was clearly a case where the defendant had transferred property for the purpose of avoiding its financial obligations. We are pleased with the result." |
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