### Estate of Leon Tawil v Sutton 2024 NY Slip Op 30575(U) February 23, 2024 Supreme Court, Kings County Docket Number: Index No. 527569/2023 Judge: LeonRuchelsman Cases posted with a "30000" identifier, i.e., 2013 NY Slip

Op30001(U), are republished from various New York State and local governmentsources, including the New

York State Unified Court System's eCourtsService. This opinion is uncorrected and not selected for official publication.

### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

1 of 15 

### SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF KINGS : CIVIL TERM: COMMERCIAL 8



### - ----------- ------ - --------- ------·-x ESTATE OF LEONTAWIL, Plaintiff, Decision and order

- against

- Index No. 527569/2023 MEIR 

### SUTTON, 

### ISAAC SUTTON, ABRAHAM DUSHEY, 

### arid lSS0 

### EAST 

### 5TH LLC,De-fendants,

- -·-- - - . .-.-..-----· ---- - - -·-.._.. ---·-- - -·---------2{ 

### PRESENT: HON. LEON 

### ROCHELSMAN February 23, 2024 Moti6n Seq. #1 & 

### #2

The defendants have moved and cross-moved seeking to dismiss the complaint pursuant to 

### CPLR §3211 oh the grounds it fails to allege anycauses of action. The plaintiff opposes the motion. Papers were submitted by the parties and arguments held. After reviewing all the arguments this court how makes the following determination. On February 9, 2016 Abraham Dushey obtained a judgement against Isaac Sutton in the amount of $741,287.20. TQ satisfy the judgement, on September 27, 2017 Isaac sold property loca,ted at 1580 East 5ti, Street in Kings county to Dushey. The purchase price was-agreed upon as $1,650,000 arid the prope~ty ~as sold for $919,119·.47 which included a satisfaction of the amount Sutton owed Dushey satisfying the judgement. Oh May 7, 2020 Dus.hey sold the property to 

### Isaac's son Meir, 

### the defendant 

### in this action., 

### :i:hrou,gh an ent:Lty 

### calied 1580 

### East 5th LLC 

### for $'1;

### 700,

### doo. .That amount was based 

### upOn an ~pprai:Sal conducted by Wells Farg'ci Barik 

### which loaned eightypercent of the 

### purchase price and then



### [* 1]

### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

2 of 15 obtained a mortgage on theproperty. The plaintiff has now instituted the within lawsuit. The plaintiff, the estate of Leon Tawil, obtained a judgement against Isaac Sutton on June 29, 2022 in the amount of $3,254,537.40 which remains unsatisfied. That judgement was the result of a lawsuit Corrimenced in 

### 2015. The complaint alleges that the sale between Dushey and

### Meir Suttonwas made to he1p 

### Isaac avoid paying its judgement to the plaintiff. The compl9int alleges three Causes of actionpursuant to the Debtor Creditor Law (§§273, 275, 276 and278). The defendants, the Suttons and Dushey havemoved seeking to dismissthe law$uit on the grounds it fails to allege any valid causes of action. As noted, the motions have been opposed. Conclusions of Law It is well settled that upon a motion to dismiss the court must determine, accepting the allegations of the complaint 

### as true, whetherthe party can succeed upon any reasonable view of those facts (Perez

### v. Y & 

### MTransportation Corpo.ration, 

### 219 AD3d 1449; 196 NYS3d 145 [2d Dept., 2023])
. Further, all the allegations in the complaint are deemedtrue and all reasoriable 

### inferences.may.be drawn in favor 

### of the.

### plaintiff (Archival Inc
..,·. V. 177 Realty- Corp., 220 AD3d 909,. 198 NYS2d 567 [2d Dept.1 

### 2023]

## i~. Whether the c::ompiaint will 

### late+ svrvive a motion fol:' surrtmary judgment, or 

### whether the plaintiff wil.l ultimately be 2



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

3 of 15 

### -able·to p,rove 

### its. c.la.im:-s, 

### of course·, 

### playsno 

### part in.t:he cieterm:j.;nation of a pre-tjiscovery C.P-LR -~3.2)1 motion.t.o d.i,smiss .(see; Lam v. Weiss, 219 AD3d 713, 

### 195 NYS3d 

### 488 [2d

### Dept., 

## 20231). Pursuant to §2.73 cif 

### the Debt.ar CreditorLaw every 

### conveyance made-

### by

## a: party which 

### then render-s. the party inscilv.ent i=s 

### fr·audulent without regard to intetit 

### if the conveyance 

### is made Without 

### ·tairconsideration (Paragon

### v. Paragon, 

### 164 

### AD3d 1460, 84 NY'S3d 582 [2d

### Dept., 2018]). Further, 

### .such transfers

## are fraudul.ent if the transferor intende.d._or 

### believed the tr_ansferor 

### woμ-ld i._ncur debts beyo.r:id 

### his or 

### her ab-ility 

### to pay the:m.

### whE?n 

### tl;l.ey ma·t.ured 

### (Dept.or (:,re_d.i,.to"t 

### Law §275.) 

### or ev.en if fair consideration
was present the 

### trans-fer was made with.the intent to defraμd (Debtor Creditor

### Law §27.6). Pursuant 

### to 

### Debtor CreditorLaw §278 ·any

### c:reditormay 

### have fra-udulent 

### conveyances set

### aside exc·ept aga:irtst 

### any good.faith,:_purchaser for v_alue, which 

### is. 

### ciefin~q as ,.any--pe.rson who te:nd_eretj-fai;r 

### considE?rati..o:n without 

### ·-knowledge of 

### any fraud (.::,ee, Cornmodity Futures T.rading Conimi::,::,ion 

### v.. Walsh, l 7 

### NY3d 162, 927'~YS2d 

### 821 [2011]}. The plaintif.f has-only 

### oppos.ed ·the- 

### motion seeking ·to dismiss ·oebto_r_Creditor_Law §_2i.76 and Debto.r Cr.editor Law §2.7H. Thus, the motion s.eek:irtg- to dismiss any c-1.aims based upo.n Debtor Credi.to.r 

### Law §27 3 

### and 

### Debtor Creciitor Law §275 is gr:anted; The fraudulent 

### transfer law contained

### -within the 

### Debtor
3



### [* 3]

### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

4 of 15 Creditor Law isdesigned to prevent debtors from avoidingthe payment of their debts (Leifer v. Murphy, 149.Misc 455, 267 NYS 701 [Supreme Court Bronx County 19331). Debtor CreditorLaw former §27.6 states that "every conveyance made . . . with actual intent .. to hinder, delay, ordefraud either present 

### or future creditors; is fraudulent" (id), Thus, a creditor must demonstrate, by clear and convincing evidence that a defendant had the actual intent to hinder, delay 

### or defraud creditors (see, Jensen v. Jensen, 256 AD2d 1162, 682 NYS2d 774 [2d Dept., 1998])
.

Since fraudulent or improper intent is difficult to prove, courts have developed 'badges of fraud' which can give rise to intent. Badges of fraud include: ''a close relationship between the_parties to the alleged fraudulent transaction; a questionable transfer not in the usual course of business; inadequacy of the consideration; the transferorls knowledge Of the creditor's claim and the inability

## to pay it; and retention of control of the property by the transferor after the conveyance1' (Goldenberg v. Friedman, 191 AD3d 641, 141 NYS3d 111 [2d Dept., 2021]). In this case, as notedi the plaintiff first became a creditor bf Isaac on June 29; 2022 when a jury awarded the plaintiff a judgement against Isaac in the amount of $3254,547.40. There are three overlapping rec:1sons the plaintiff cannot maintain any fraudulent conveyance claims against the defendants.
4



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

5 of 15 . . First, the two transfers, from Isaac to Dusheyand then Dushey to Meir all concluded two years before tll.e plaintiff obtained ariy judgement. Tn fact, the transfer from Isaac to Dushey occurred almost five years before the judgement was obtained. It is true that a fraudulent conveyance can be found
even where the debt was not in existence at the time of the conveyance. Howeve:r:, all cases that haverelied on that proposition·concerned events far closer in time. Tn Nonas v. Romantini, 271 A:D2d 292, 706 NYS2d 109 fl"t Dept., 20001 the court £01.ihd a fraudulent conveyance could exist because when the conveyance was made "there were ample indications that such obligationwas being discussed at or about the time of s,uch transfer'' (id)
. InFirst Keystone Consultants T:hc., v.Schlesinger Electrical Contractors Inc., 871 F.Supp2d103 [E.D.N.Y. 2012] the court h.eld conveyances could be fraudulent when they wer·e made within weeks of arbitration appearances and arbitratio.nrulings against an entity, 

### KFC, that was the subject 6f those arbitratioris. The court concluded that "the timing and circumstan.:::E:s of :these transactions constitute clear and convinbing evidence that FKC acted With intent to defraud its creditors'; (id). Similarly, In CathayBank v. Bonilla, 2023WL 6812274 [E,D.N.Y. 20231 the court found a fraudulent conveyance existed, when among otherfactors, a transfer

**to◊-k** place one month after :the transferor was named in a lawsuit.

5



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

6 of 15 

### Inthis case, although Isaacwas aware

## ofa lawsuit filed in 2015, the transfers tookplace in 2017 and 2022. Amere lawsl1it filed, the merits of which required a jury determination ye.ars later, cannot support a finding the transfers were fraudulent. Moreover, this reality, without any other factors is insufficient tb establish a fraudulent transfer. In

### truth, as not'ed, this argument 

### is really one factor when assessing whetherbadges of fraud exist. Indeed, Federal courts include additional factors that can be utilized to evaluate whetherbadges 

### of fraud support the intent necessary 

### to establish 

## a fraudulent conveyance, including "the general chronology of the events and transactions under inquiry" {see; Kim v. 

### Ji Sung Yoo,

. . 

### 311 F.Supp3d 

### 598 [S.D.N.Y. 2018]). 

### That additipnal factor is not found in any appellate decision inNew Ybrk but is found in lower court decisions (~, Nixon: v. Jackson, 2009 

### WL 1574117 [Supreme Court Nassau County 200.9] and ATSCO LTD. et al v. Haryati Zainudin Swanson; 2004 WL 5329667 [Supreme Court New York County 2004]). The allusion to this additional factor in Nonas (supra) and the strength ot weakness of its relevance demands its consideration along with an examination

## of all the badges of fraud. Second, evaluating the badges of fraud necessary demonstrates tha1: plaintiff has not adequatelypled intent of a fraudulent conveyance. The plaintiff asserts the two
6



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

7 of 15 transactions must be viewed as one composite transaction. The court will address that argument, however, to maintain a fraudulent conveyance action premised onbadges of fraud, requires, first, a close relationship between the parties to the alleged fraudulent tr:ansaction. The two transactions involve Isaac and Dushey and oushey andMeir. While Isaac and Meir as

. . . . . I ... fathek and son, obviously maintain

### a close relationship~ 

### there is
no such relationship with Dushey. The complaint states that Isaac andDushey were friends .fo.rtwentyyears (Complaint, 'l4 [NYSCEF Doc. No. 8]}. However, Dushey sued Isaac ahd obtained a judgement against l:lim in 

### an action in Kings County entitled Abraham Dushey, 

### et al. v. Isaac Sutton, IndexNo. 51025/2015 and secured ajudgemen:t against Isaac for $741,287.DO. Thus, the sort of "close'; relationship required 

### to maintain a fraudulent conveyance action premised onbadges of fraud does not exist here.

**✓** . Next, plaintiffdoes not allege facts sufficient to suggest that the transactions were questionable transfers not in the usual course of business. For example, "a corporationdoes not usually transfer money to; or for the benefit of, people who provide ho consideration. Nor does a corporation properlyprepare and file W-2 forms for people who are not employed by the c::orporation'; (see, Federal National Mortgage Association v. Olympia Mortgage Corporation, 792 F.Supp2d 645 IE.D.N,Y. 2011]).
T



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

8 of 15 

### Moreover, 

## a transactionmade withan unusual amount of secrecy or made with efforts to conceal thi2 transaction from others inclU9ing debtors principles are further indications the transaction was not made in the ordinary course ofbusiness (Tn
re 45 John Lofts LLC; 650 BR 602 [United States BankruptcyCourt

. . Southern District of New York 2023]), The first transfer was made to satisfy a debt and cart hardly be classified as improper in any way. There is also no indicia that Isaac preferred certain creditors to the detriment of the plaintiff and that suchpreference constitutes fraud (see, Priestly v. Partmedix Inc., 18 F.Supp3d 486 [S.D.N.Y. 2014]) . At the time of the conveyance, Dushey had a judgement against Isaac and plaintiff didriot. There can be no fraudulent preference-s paying the debt owedto D11shey thereby frustrating the plaintiff's claim that would not ripen for five years. The unpredictability of that claim, in 2017, negates any assertions the transferto Dushey.somehow consisted of any improper pre£erence (see, In re Sharp International Corp., 4.03 F3d 43 [2d 

### Cir. 2005

### J

### l The second transfer did hot involve Isaac the debtor and in isolation was not done in any unusual manner to raise any badge of fraud at alJ. The transfer was for full cohs-ideratioh, was made with a publicly recognized bankas mortgagee and was not done secretly orhastily. The fact the property may not have been publicly available to other potential
8



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

9 of 15 

### purchas·ers does not me-an the· conveyance·- was fraudulent in·any 

### -manner. 

### Next, inadequacy 

### of the consip.eration is. 

### considered a ·\\.particularly·impottan_t,,.

### badge- establishing 

### a: fraudulent conveyance 

### (Axginc Corporation v. Plaza 

### AutomallLtd., 2022 

### WL 2135474 [E.·i:).N.Y. 

### ·2022']")
. While the plaintif·f 

### acknowledges that 

### inadequacy o"f 

### consider:ation is a 

### badge o:f 

### fraud 

### nec.e-ssaryto establish 

### intent 

### (see, Memorandum 

### of Law 

### in 

### Oppositipn, page 7 [NYSC~)F Doc.·No. 

### 6·5]) the: pJ_ai"n

### tif·f 

### argu(;!·s that inadequacy· 6f 

### consid~rati.on is 

### not rieces-sary to· establish

## a: claim.purSμq.nt t,o 

### Debtor Creditor 

### Law former 

### §276. Itis 

### true that 

### where actual iptent to defraud·-has been proventhen th.e 

### adequa~y_of 

### consideration is not relevant 

### to: set as.ide the conveyance {.filffi., 

### In 

### re Sharp 

### Internation·al Corp., 

### supra). However, 

### where there 1-s
no indi_c,ic1

### _of actual i·ntent 

### ·-1;1.no instead the 

### pl-aintiff seeks 

### to establi§h 

### fr~ud by reliance 

### upon

### badges 0£ 

### fraud 

### tben surely

### the inadequacy.of corrs.iqerat-,ion_i~ i3. £-actor 

### that-m,tist be considered (see,. Wall Street Associates v. Brodsky_, 257 :AD.2:d 5_2_Q, 6$4 NYS2d 244 [lst Dept., 19:99]) 

### InWall 

### street, the

### court explained that "DCL "§ -276, unlike.· sect.i:Ons' 

### 27.3 and 275, 

### addres.ses 

### actual -fraud,
as opposed to constructive 

### fraμd, and does not require proof 

### of unfair c·on·sicteration 

### or i.ns·blven-cy...

### Due to the difficulty 

### of· 

### proving actual intent t,o 

### hincter·, cielay, or 

### def

### r~ud creditqrs, the 

### ple.ader 

### is allowed 

### to 

### re1y on "badges 

### of 

### fraud" to support his
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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

10 of 15 

## case, i.e., circumstances so. c·ommo.nly

### as.soc::ii;l_ted

### with fprndμlent trans.rers 

### "thatt_heirpresence gives. rise 

### to an inference of interit"...

### Among such 

### c"ircu:mstaitces 

### are: a 

### clos·e. 

### rel·ationship t.,etwe.en- the parties to the 

### a.lJeged.fraudulent transactiqn;· a 

### questionable. tri::l.nsfer

### not in the 

### usual course bf

### business; inadequacy .of the 

### ·cons·iderati-on; the tra-risferor's 

### knowledg.e of the er.editor's c-laim and

### the inability 

### to pay it; 

### a.nd re.tention 

### of

### control of the propertyby 

### the transferor after

### the <;::-9nveyance" (id)
. 

### T.he ,adequacy.of 

### co.nsidera_tio.ri.. conc$.rning .the tr~nsfE;ixs in 

### this case i$ 

### apparent. Indeed, 

### the plaintiff _does 

### not 

### even

. . . 

### question their 

### a_dequacy ·otherthan tci no.tethe 

### secondtransaction 

### was not 

### arms..:..alengthbecause the price wcis virtually 

### the same 

## as the2017 

### transfer and the property

### was riot listed fo-r sale on the 

### open m,a:rket.- However, 

### those facto:.ts do not

### impugn 

### adequate consideration at 

### a.11. In 

### any event, those objections 

### are equally 

### _u_navailing and .fail 

### to :raise- 

### any question of 

### fraud. While the two transfers, thre$ years apart, 

## were for almost identici:ll prices,. tha_t 

### does nc:it evince any questi.on of 

### fraud. This .is 

### :particulariy·tru·e where. :ther~- 

### is no quest.ion 

### fair -c.or;isideration was 

### ex-changed and Well.a 

### Fargq 

### Bankprovided an appraisal arid ,obta:·ined a 

### mortgage in the second trap-$~ctipn. Any qμestio.n in thi-s reg~rd is_ sheer speculation. 

### Moreover:,- the -fact the 

### property may not have beeri offered to sale 

### to others does not 

### 10

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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

11 of 15 undermine. the adequacy of consideration. That is an irrelevant fact that has no bearing uponthis litigation. The nextbadge of fraud is the transferor's knowledge of the creditor's claim and the inability to pay it. This badge is entirely absent in these transactions and to be sure the badge makes little sense considering the specifics facts. DUshey as 

### one of the transferors was never

### a debtor andwhether Dushey knew of Isaac's debts is entirely irrelevant. As the court observed in In re Tribune Co. Fraudulent Conveyance Litigation, 2017 WL 8-2391 [S.D.N.Y. 2017] "when considering whether a debtorhad an actual intent to hinder, delay, or defraud its crE'!ditors, courts focus on the intent of the transferor not on the intent of the transferee" (id). Thus, the intent of Dushey or Meir as transferees is entirely irrelevant. The lastbadge of fraud demonstrating intent recitedby New York cases is whether there 

### is any retention of control of the property bythe transferor after the conveyance. Th this case that badge.Of fraud is not even asserted. There is no dispute that after Isaac transferred the property to Dushey he did not ma.intain any retention Cir control ov_er the property. Likewise, upon Dushey's sale of·theproperty to Meir, again, Isaac retained
nocontrol over the property. As noted, the Federal courts include further badges of fraud, namely, the financial condition of the party sought to be
ll



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

12 of 15 charged bothbefore and after the transaction in question, the existence or cumulative effect of a pattern or series of transactions orcourse of conduct after the incurring ofdebt, onset of financial difficulties, or pendency orthreat of suits by creditors

## c:rnd the general chronology of the events and trarisactioris under inquiry (see, EmersonElectric Company v. Asset Management Associates of New York, 

### 2023WL 

### 4850528 [E.

## n.N.Y. 2023])
. These badges of fraud are also absent in this
case.The financial cortdition 

### of the party sought 1:o be charged, Isaac in this case, is similar to the transferor's knowledge of the creditor's claim andthe inability to pay 

### it. That badge has adequatelybeen discus·sed. The next bad.ge, a series of transactions will be dealt with presently regarding the collapsing doctrine. The last badge, the chronology of events surely provides no indicia that any intent existedto frauciulently convey the property. As alreadyexplained, a lawsuit was comrri.enced against Is.a:ac .in 2015. In 2016 Dushey obtained a judgement against Isaac. As a result of that judgement Isaac soldhis property to Du.Shey to satisfy the debt thatarose from the 2016 lawsuit. The further transaction from Dushey to Meir in 2020 did notinvolve Ts.aac at all and the c:hronology of these events does not serve to indicate any fraud
.. The mere factthe 

### 2015 lawsuit was concluded with a judgement
12



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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

13 of 15 against Isaac in2022, a full two years after the propertywas sold to Meir fails to allege any fraudulent conveyances in any manner. Thus, considering all the badges of fraud, the. only one that could possibly be utilizedto infer fraudulent intent is the fact Isaac andMeir are related to each other. However, that one possiblebadge is entirely inadequate. As the court Observed in In re Tops Holding II Corporation, 646 BR 617 [United States Bankruptcy Court Southern District of NewYork 2022] ''the presence or absence of any single badge of fraud is not conclusive; The proper inquiry is whetherthe badges of fraud
are present, not wh?ther some facts are absent. Although the presence of a single facto'r, 

### i.e. a badge of f:r-aud, may cast suspicion.Oh the transferor's intent, the confluence of several in one transaction generally provides conclusive evidence of

## an actual intent to defraud" (id). Thus, when no badges of fraud
are found no such intent to engage in any fraudμlent conveyance has beenpresented. Lastly, the plaintiff asserts the collapsing doctrine can enable both transactions tobe viewed as one overall transaction wherein Isaac really transferred the propertyto his son establishing a fraudulent conveyance. This doctrine permits mμltiple trarisactions to be viewed as steps in a single transactionwhen analyzing a fraudulent conveyance allegation 

### (HBE Leasing Corporationv. Frank, 48 F.3d
B



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14 of 15 

### 623. [-2d Cir. 1995])-. Fo-r example in HBE the 

### court explain'edthe doctrin.e 

### would apply wh·ere 

### ~'one 

### tran.s-f~J:"_ee gives fair

### v-~l_μe to the debtor in exchange 

### for the debtorsproperiy, and

### the debtor then gratuitously trans.fers 

### the proceeds 

### of the first 

### exchange tc.i


### a s~c:c.ind 

### transferee. The first 

### transferee thereby 

### receives the 

### d.e-bt.or:s prope.rty, and the se.cond 

### trar:i.sfer~e rece!ive.fi· the

. . . 

### ··¢.ons.-idf,!ra-i:ion, wh11'3, 

### th_e 

### debtor retains 

### -nothiri.g" (id:).• 

### Thus, for this doctrine to apply the party seeking .its applicability must 

### demonstrate t!J.at 

### the qoqsideration 

### the debtor gave 

### the first 

### transferee was 

### th:e:n ;:r~convey~d by the debtor for less.. than fair ,c.oris-ideration 

### or with· 

### art actual intent 

### to defraud cred-i.to,r~
. .Howeve.r,. 

### ifthe df.!btor

### ,does not transf.e_r 

### the conside,ra-:t,io.n.

### but rather keeps it then the first transfer is not fraudulent. 

### Furthe.r, "the 

### initial transfereemust have a,ctual or construct:Lve _lcn-owle<;i_ge 

### of the entire .scheme 

### that 

### re_nders the 

### exchange- with 

### the ·.tjep.tor f:raudulent" 

### ("se'e, In re M. 

### -Fabrikant &. Sons 

### Inc., ·.3-94 

### BR 721 [United States Ba·nkruptcy Court s:o.:uthern bistri.ct o_f" N.ew York 

### 2>ooaJ)• 

### In this 

### case none. of the 

### elements o.f the 

### collapsing doctrine
.are 

### present. 

### Firs·t, the debtor 

### di"d ·not. gratuitously 

### tran.s.fer the ·p_r-oc.eeq_s to any t.hird

### pa-rty. Rather_, s·ome of the proc~~ds were 

### used to s:ati-sf.y a debt ow·ea

# to Dushey and 

### the remainder of the proceeds were :retained by Isaac. Second, th.ere is.no allegation that 

### Dusheyi tbci initial ttansferee, 

### had any 

### tnbwledge of any 

### l4

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### FILED: KINGS COUNTY CLERK 02/23/2024 08:58 AM INDEX NO. 527569/2023 NYSCEF DOC. NO. 94 RECEIVED NYSCEF: 02/23/2024

15 of 15 

### .scheme··to defraud.the plaintiff. 

### t:-3'-or could Dus.hey possiblyhave .a_ny sue}} kJ:"l.Qwledge of a!l.y int_ent t:o defx;a_ud Isa_ac s_ince

### .nq j\idge::inent

### hadeven been obtained 

### arid thus. there 

### was ho fraudulent 

### .a.ctlvi.ty. Es·sentia1ly, the 

### plaintiff argues that in 2017 Isaa.c thought that

### perh,aps he

### may owe the plaintiffmoney 

### ciue 

## toa iawsui

### t commenced.

### two years ea·rlier and embarked upon a ~rnheine-. 

### Pursuant 

### t.o. this 

### -scl:1.eme Isaac 

### wo.uld sell

### prope·rty to 

### Dushey (to satisfy a debt) then wait

### three years 

### and allow Dushey to sell the property to h:i,.-s son

### Meil;' for full 

### v-alue be.lievin:9 

### that at 

### some future 

### point he rnay los-e 

### the-. lawsuit to .the 

### plainti!f.. 

### Even 

### if all those facts 

### are 

### true that 

### do.e-s not 

### atiege any frauciulent 

### conveyance f9.r the 

### rea·9:ons e_xplain.ed. 

### Therefo--r.et the motion seeking_ to dismiss all 

### causes of action :pursuant to Debtor_ Creditor Law ·§276 is granted, Conseque·ntly, ·there cah b"e no claims against Met.t

### pursuant to Debtor

### Creditor

### Law §278 

### a.nd the motion seeking to dismiss all those claims is likewise.granted. T.hus,•the

### motions ~eek:i.:ng tq qismis-s the entire 

### complaint is .fully granted. .So 

### ordered.

DATED: Febr:uary

## ,?3, 2024 Brooklyn N.Y. ENTER: 

### Bon. 

### JSC

1_5 ..;



### [* 15]