560 B.R. 866
Bankr. S.D. Florida2016Background
- Debtor Ibes Gomez filed Chapter 7; he is a convicted fraudster who ran Connedx, a company with no viable software or contracts.
- Trustee Maria Yip sued Connedx and Lisa M. Madalon seeking to avoid/recoup: (1) a $49,000 wire ("Stock Payment") allegedly paid for Connedx stock and (2) $7,800 in earlier transfers ("Series Payments").
- Madalon testified she was fraudulently induced to buy a small equity stake based on false representations; she wired $49,000 to a Connedx Chase account at Gomez’s instruction.
- Bank records show Gomez was sole signatory and spent the funds from the Chase account for personal expenses; the account went negative.
- The court found the Connedx stock valueless at the time of transfer and that Gomez personally received and used the $49,000 and the $7,800.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $49,000 Stock Payment is avoidable as a fraudulent transfer under §548 | Trustee: transfer can be avoided because Debtor transferred interest without receiving reasonably equivalent value | Madalon: stock was worthless; Debtor received the $49,000 (new value) and thus received reasonably equivalent value | Denied — transfer not avoidable; Debtor received the $49,000 and stock had zero value |
| Whether the $49,000 Stock Payment is avoidable as a preferential transfer under §547 | Trustee: payment to Connedx account is avoidable as preference | Madalon: contemporaneous exchange for value; Debtor received new value by taking the wired funds | Denied — §547(c)(1) contemporaneous exchange/new value defense applies |
| Whether the $7,800 Series Payments are avoidable as fraudulent transfers under §548 | Trustee: transfers into Chase account depleted estate and lacked reasonably equivalent value | Defendants: Debtor appropriated the Series Payments as personal benefit (thus received new value) | Denied — Debtor received and used the $7,800; transfer not avoidable |
| Whether the $7,800 Series Payments are avoidable as preferential transfers under §547 | Trustee: payments to Connedx account are preferences | Defendants: transfers were contemporaneous exchanges/new value to Debtor who received benefit | Denied — §547(c)(1) defense applies; Trustee failed to prove avoidance |
Key Cases Cited
- Feltman v. Warmus, 229 B.R. 496 (Bankr. S.D. Fla. 1999) (trustee bears burden to prove fraudulent transfer elements)
- Ingalls v. SMTC Corp., 421 B.R. 251 (Bankr. W.D. Tex. 2009) (trustee must demonstrate assets were transferred and their value to sustain fraudulent conveyance claim)