UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

www.flsb.uscourts.gov

In re:

Villas of Windmill Point II Property Owners 

Association,

Debtor.

/

Case No.: 19-20400-MAM

Chapter 11

Les S. Osborne, 

Plaintiff,

v.

Thomas Lesko and The Kingdom Trust 

Company,

Defendants. 

/

Adv. Proc. No.: 19-01822-MAM

MEMORANDUM OPINION AND ORDER GRANTING IN 

PART AND DENYING IN PART TRUSTEE’S MOTION FOR 

PARTIAL SUMMARY JUDGMENT

About forty years ago, the board of directors of a property owners’ association 

adopted a set of bylaws (“Bylaws”). Like most corporate governance documents, the 

Mindy A. Mora, Judge

United States Bankruptcy Court

_____________________________________________________________________________

ORDERED in the Southern District of Florida on April 29, 2021.

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Bylaws required the officers and directors to act in the best interests of the 

association and all of the associations’ members. Somewhere along the way, the 

directors lost their sense of purpose. A few began twisting the provisions of the 

Bylaws to serve their own ends, ignoring the premise upon which the original 

documents were drafted: the collective good of all resident members of the 

association. 

And that is how the association ended up as a debtor in this Court. 

BACKGROUND

On August 2, 2019 (“Petition Date”), Villas of Windmill Point II Property 

Owners Association, Inc. (“Debtor”) filed a chapter 11 petition for bankruptcy relief. 

From the first week of the Bankruptcy Case, it became clear to the Court that 

Debtor’s financial distress stemmed from some sort of shenanigans that had 

culminated in entry of a state court receivership order (“Receivership Order”)1

entered on the Petition Date. 

Within days of the Petition Date, the United States Trustee filed an emergency 

motion to either dismiss the case or appoint a chapter 11 trustee. Operating on 

emerging facts and strong intuition, the Court determined that Debtor’s financial 

stress was severe and that appointment of a chapter 11 trustee was the likeliest path 

to a successful reorganization. 

As the Bankruptcy Case unfolded, the scope of prepetition bad acts began to 

emerge. The entire condominium complex was in substantial disrepair. The majority 

1 ECF No. 44, p. 115 (Order on Motion to Appoint Receiver).

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of units were owned by Debtor, not individual residents, for reasons that were not 

immediately clear. A few directors held a shockingly high number of mortgages on 

units. Taxes were unpaid. Books and records were incomplete or missing. The list 

went on. 

Now, almost a year and half since Debtor first appeared in this Court seeking

relief, the picture is much rosier for Debtor’s residents. The court-appointed trustee, 

Les Osborne (“Trustee”), working with court-approved management companies,2 has 

largely completed the massive project of righting the ship. Maintenance services have 

recommenced and are no longer critical. Roofs and roads are being repaired. Taxes 

have been paid. 

All of these developments were made possible, in part, by the sale (“Sale”) of 

53 Debtor-owned units to Eric Nathanson for $4,450.000. The Sale, which was subject 

to all of the procedural safeguards available in any bankruptcy case,3 resulted in a 

desperately-needed cash infusion that transformed Debtor into a functioning entity 

capable of submitting a chapter 11 plan. Although approval of Debtor’s current plan 

is by no means certain, the present posture of Debtor and its residents is one in which 

2 The St. Lucie County Court (“State Court”) entered the Receivership Order on the same day that 

Debtor filed for bankruptcy relief. The Receivership Order appointed Suzie Butler as Receiver for the 

Debtor. On October 10, 2019, upon proper motion by the Trustee and after notice to all parties, this 

Court entered an order (ECF No. 91) approving the engagement of the Receiver’s management 

company, Coastal Community Association Service, Inc. (“Coastal”). On April 29, 2020, the Court 

entered a subsequent order approving the retention of Oxygen Management Services, LLC in place of 

Coastal. 

3 ECF No. 198 in Case No. 19-20400 (“Sale Order”).

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approval of a plan is at least a reasonable prospect. That alone is noteworthy in this 

Bankruptcy Case. 

This success, however, is not without its pitfalls. Now that Debtor has 

relatively full coffers and the potential for a successful reorganization, three of 

Debtor’s former officers and directors are seeking payment through Debtor’s plan for

substantial claims. One of those directors, Thomas Lesko (“Lesko”), is a defendant in 

this Adversary Proceeding.4

PROCEDURAL HISTORY

 In response to Lesko’s proof of claim filed as Claim No. 19 (the “Lesko Claim”), 

Trustee instituted this Adversary Proceeding seeking, among other things,5 a 

judgment establishing the invalidity of that claim. Two months after filing his

Amended Complaint (ECF No. 44), Trustee quickly moved for summary judgment 

(ECF No. 59) (“Trustee’s Motion”) on two counts: objection to claim and constructive 

fraudulent transfer.6 

4 The other defendant, The Kingdom Trust Company (“Kingdom Trust”), is an investment vehicle for 

Lesko. The Court knows surprisingly little about this defendant, including whether it was Trustee’s 

intention to seek summary judgment against Kingdom Trust. The Amended Complaint (ECF No. 59) 

does not specify against whom each claim is sought, nor does the motion for summary judgment clarify

that point. For Kingdom Trust’s part, Lesko’s response merely provides in a footnote that Kingdom 

Trust issues are to be addressed at “another time”. 

5 The Adversary Proceeding asserts ten other causes of action, including breach of fiduciary duty, 

negligence, conversion, avoidance of fraudulent transfer, avoidance and recovery of preferential 

transfers, and determination of the extent, validity, and priority of liens. 

6 Trustee’s Motion mistakenly identifies the two counts upon which summary judgment is sought as 

Counts I and IV. Count IV is a count for conversion. The arguments in Trustee’s Motion, however, all 

pertain to fraudulent transfer. The Court presumes that Trustee intended to seek summary judgment 

as to Counts I and VII. 

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Lesko countered by filing a document styled as both a response and countermotion for summary judgment (ECF Nos. 72 and 85) (“Counter-Motion”) on all counts. 

The Court solicited briefing on both Trustee’s Motion and the Counter-Motion. The 

parties complied with the briefing orders by filing a whopping 1500 pages of 

documents, most of which were compiled without the benefit of pdf “bookmarks” or 

indexing.7

In addition, the parties filed two 20-page joint stipulations (ECF Nos. 101 and 

114) (collectively, the “Joint Stipulation”) that were identical except for a handful of 

scattered paragraphs.8 Although most citations were thoughtfully noted in the Joint 

Stipulation, the vast majority of these citations could not be tracked to the record.9

The parties also supplied the Court with trial exhibits and corresponding motions in 

limine that collectively numbered in the hundreds of pages.10

7 Hundreds of pages of these documents were either minimally relevant or wholly irrelevant to the 

issues actually being litigated. To further complicate the Court’s analysis, many of the more pertinent 

documents were not filed with Trustee’s Motion or the Counter-Motion. Instead, the parties apparently 

filed the documents as they became available (or perhaps when the parties realized their usefulness). 

Lesko recently filed another 96 pages of potential exhibits and exhibit registers. See ECF Nos. 129, 

130, 131, 132, & 133. Because Lesko’s most recent submissions were filed at least six months after the 

deadline(s) for submissions established via court order, the Court declines to consider them at this 

time. See ECF Nos. 63, 86, 116.

8 The insertion of a few paragraphs resulted in unmatched numbering between the two documents.

Because the undisputed facts were virtually the same, a more streamlined method of complying with 

the Court’s briefing orders would have been to adopt the prior stipulation and clearly identify the new 

paragraphs added in the second stipulation. The parties also failed to sign ECF No. 114.

9 The reasons for this confusion appear to be twofold: (1) simple error, likely through the drafter’s 

reference to a source document with different pagination, and (2) an indecipherable form of exhibit 

numbering that probably relates to filings previously submitted to the State Court. The Court feels 

obliged to note at this point that careful proofing by the filing attorneys (not merely the drafter) would 

have eliminated all erroneous references and spared the Court a great deal of frustration. 

10 Issues relating to admissibility of those documents at trial has been reserved for the trial stage of 

this Adversary Proceeding.

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The Court must explain that this Adversary Proceeding is but one of three 

interrelated adversary proceedings involving two other directors of Debtor and family 

members of those directors. Despite the uniqueness of each adversary proceeding, the 

parties have largely treated this Adversary Proceeding (involving Lesko) as the 

functional “lead” Adversary Proceeding, adopting and referring to pleadings within 

this proceeding.11

The end result is a disorganized and voluminous record. Trustee’s Motion, for 

example, contains 19 pages of “undisputed” factual allegations that predate the Joint 

Stipulation(s) and therefore cannot be easily reconciled with them. Key deposition 

testimony is found in numerous exhibits to Trustee’s response to the Counter-Motion, 

but is not attached to Trustee’s Motion itself.12 The Court spent an inordinate amount 

of time endeavoring to make sense of the record and ascertain precisely which 

documents and what facts are relevant to Trustee’s Motion and the Counter-Motion. 

Having finally accomplished that task, the Court now issues this 

Memorandum Opinion and Order. 

LEGAL STANDARD

Pursuant to Federal Rule of Civil Procedure 56(a), made applicable to 

bankruptcy proceedings by Federal Rule of Bankruptcy Procedure 7056, the Court 

shall grant summary judgment “if the movant shows that there is no genuine dispute 

11 See, e.g., Adv. Proc. No. 19-1874, ECF No. 52.

12 ECF No. 101, Exhibits 1-12. Lesko amassed exhibits in support of summary judgment into one 239-

page document with multiple cryptic exhibit stickers that do not match the references in the CounterMotion. ECF No. 87-1. 

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as to any material fact and the movant is entitled to judgment as a matter of law.” 

Fed. R. Civ. P. 56(a). “When deciding summary judgment, the Court may look to 

materials in the record such as depositions, documents, affidavits or declarations, and 

admissions.” Certain Interested Underwriters at Lloyd’s, London v. AXA Equitable 

Life Ins. Co., 981 F. Supp. 2d 1302, 1305-06 (S.D. Fla. 2013) (citing Fed. R. Civ. P. 

56(c)). 

The Court “must view all the evidence and all factual inferences reasonably 

drawn from the evidence in the light most favorable to the nonmoving party.” Diaz v. 

Amerijet Int’l, Inc., 872 F. Supp. 2d 1365, 1368 (S.D. Fla. 2012) (quoting Stewart v. 

Happy Herman’s Cheshire Bridge, Inc., 117 F.3d 1278, 1285 (11th Cir. 1997)) 

(internal quotation marks omitted); see also Morton v. Kirkwood, 707 F.3d 1276, 1280 

(11th Cir. 2013). Finally, the moving party “always bears the initial responsibility of 

informing the . . . court of the basis for its motion, and identifying those portions of 

‘the pleadings, depositions, answers to interrogatories, and admissions on file, 

together with the affidavits, if any,’ which it believes demonstrate the absence of a 

genuine issue of material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); see 

also Josendis v. Wall to Wall Residence Repairs, Inc., 662 F.3d 1292, 1314-15 (11th 

Cir. 2011). 

ANALYSIS

I. Count I – Objection to Proof of Claim

Lesko’s claim asserts four (really three) potential bases for Debtor’s supposed 

obligation: (i) wages totaling $208,500 (“Wage Claim”), (ii) performance bonuses and 

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commissions totaling $124,492.32 (“Bonus Claim”), (iii) a severance award and late 

charges totaling $1,566,590.80 (“Severance Claim”), and (iv) delinquencies of 

$46,083.12 arising from mortgages relating to the Severance Claim (“Delinquency 

Claim”). The cumulative amount asserted in the Lesko Claim as of the Petition Date 

is $1,945,666.24.13 

Although each of the four bases for the Lesko Claim could theoretically require 

extensive analysis, unpacking the merits of the entire Lesko Claim is quite simple for 

one reason: every act taken by the Board of Directors supporting the purported 

obligation was, according to Debtor’s Bylaws, an ultra vires act. And, to the extent 

that Lesko might assert that his actions were approved and payment authorized by 

a 2005 consulting agreement between Lesko Consulting and Debtor (as later 

amended, the “Consulting Agreement”), the Court need only point out that the 

engagement of Lesko Consulting (even if valid) did not make Lesko an “employee” of 

Debtor. 

The Court will address the Wage Claim, the Bonus Claim, the Severance 

Claim, and the Delinquency Claim in turn. 

A. Wage Claim

The Wage Claim asserts amounts due for services by Lesko from November 27, 

2016 to the Petition Date. Lesko contends that during this time, he provided services 

under the Consulting Agreement entitling him to $150/hour for up to ten hours per 

13 The Court affords no weight to Lesko’s characterization of the entire amount as a wage or severance 

claim under 11 U.S.C. § 507(a)(4)(A) because Lesko was never an employee of Debtor. 

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week. He extrapolates those amounts to conclude that he is due for 2 years and 35 

weeks of services billed at an amount of $1500/week, or $208,500.

The Court will make a few observations that show the imprecision and 

inconsistency in Lesko’s arguments in support of the Wage Claim. For this purpose,

the Court will assume arguendo that the Consulting Agreement was validly adopted 

(a point the Court does not believe to be true).

First, Lesko’s asserted hours include time for which he was administratively 

adjudicated to be disabled and therefore unable to work. Lesko submitted sworn 

statements in support of this determination.14 Lesko also stipulated that he was 

disabled as of Thanksgiving Day 2016, which was November 24, 2016. After that date, 

Lesko was unable to work and only volunteered for Debtor, without any compensation 

because he was unable to perform his services as he used to do.15

Second, the original Consulting Agreement only provided for services totaling

$600 per week, not $1500.16 A November 17, 2005 addendum (“Addendum”) increased 

the hourly amount to $125 but stipulated that Lesko would be “limited to bill for only

6 hours per week”.17 That would equate to $750 per week, not $1500. Neither the 

Lesko Claim nor the Counter-Motion clarify how the maximum weekly contract rate 

14 ECF No. 61-4, p. 34-41; ECF No. 61-9, p. 6, ¶¶ 25-28.

15 ECF No. 101, p. 8-9.

16 ECF No. 61-4, p. 29. Many of the documents in the record are composite exhibits with multiple 

“exhibit” stickers, header pages, or footer references. Those identifying marks usually do not correlate 

with the references in the pleadings. For ease of reference, page numbers throughout this Opinion 

refer to the PDF page numbers of the documents as accessed via the Court’s docket on CM/ECF. 

17 ECF No. 87-1, p. 24.

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doubled to $1500 per week, and the Court was unable to locate documentary support 

for that rate within the record.18

Third, Lesko’s computations do not reflect any reductions in billed hours for 

holidays, vacations, or, significantly, his own incarceration.19

Fourth, the purported “work” performed by Lesko was in the nature of CAM 

services for which Lesko did not have a license. Although Lesko contends that he 

specifically did not perform CAM services, the record demonstrates otherwise.20

Fifth, Lesko was not Debtor’s direct employee. This rather obvious statement 

bears repeating because Lesko has characterized the Wage Claim as precisely that: a 

claim for wages under 11 U.S.C. § 507(a)(4)(A).

In numerous documents submitted to the Court, Lesko has characterized 

himself as a “volunteer” director of Debtor. The Consulting Agreement shows that 

Villas engaged Lesko in his capacity as president of Lesko’s business entity, Lesko 

Consulting. The Consulting Agreement appears to have been drafted by a non-lawyer 

and therefore lacks many of the traditional formalities observed in an arms-length 

agreement. Despite these failings, the Consulting Agreement indicates that Debtor 

engaged Lesko Consulting (and therefore Lesko) as an independent contractor. There 

is nothing in the record to suggest that Debtor withheld federal and state taxes, 

subsidized health benefits, or otherwise hired Lesko as an employee. 

18 The record spans over a thousand pages. No citation to support the higher amount was provided to 

the Court and the Court was unable to independently verify the asserted amount. 

19 ECF No. 61-9, p. 6, ¶ 29.

20 ECF No. 61-4, pp. 3-5, ¶¶ 9-24. 

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For all of these reasons, the Wage Claim fails as a claim under 11 U.S.C. 

§ 507(a)(4)(A) and must be valued at zero. Trustee’s objection to the Wage Claim is 

sustained. 

The Court will address supplemental reasons why the Wage Claim must fail 

in its analysis of the remaining claims. 

B. Bonus Claim

Lesko’s Bonus Claim also derives from the Consulting Agreement. Although 

Lesko’s proof of claim is non-specific as to the precise language purportedly giving 

rise to the Bonus Claim, he asserts that his “consulting contracts” provided for a 35% 

performance bonus and commission for monies acquired by Debtor as a result of 

Lesko’s actions. 

The Addendum generally supports Lesko’s contention that the Consulting 

Agreement contemplated performance “bonuses”, but Lesko overstates the allowable 

percentage under the Addendum and likewise overlooks the foundation upon which 

any “bonus” might have been paid.21 The first flaw is admittedly minor; the second 

failing, however, is fatal, particularly when the Consulting Agreement is interpreted 

in accordance with the Bylaws.

The Consulting Agreement lists several instances in which a performance 

“bonus” might be paid to Lesko Consulting (and therefore Lesko). Those instances 

21 ECF No. 87-1, p. 24, fourth paragraph (“Consultant’s commission and performance bonus will ... be 

based ... at the continued rate of 33 1/3%.”) Despite characterizing the applicable percentage as 

“continued”, the Addendum slightly raises the amount set forth in the original Consulting Agreement 

(33%). 

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include situations like recovery of overpayment by Debtor to vendors, refunds from 

vendors who performed unsatisfactory work for Debtor, and elimination or 

forgiveness of debt by vendors. None of these situations is per se problematic. 

The Consulting Agreement goes on, however, to include cryptic references to 

“expediting fees”, “document fees”, “interview fees”, and “fines & penalties”.22 The 

Court believes that the average homeowner might very well not realize that the 

impact of these provisions would be to incentivize Lesko to line his own pockets with 

mysterious “fines” and “penalties” collected from unwitting homeowners—which is 

apparently precisely what occurred.23

The reality of what happened is in large part why the Bonus Claim must fail. 

Lesko and other directors used their positions to terrorize residents and capitalize 

upon their positions of power. The record, when viewed as a whole, leaves no room 

for doubt that Lesko abused his power as a “volunteer” director.24

The record reflects that Debtor transferred astronomical sums to Lesko, 

entities under Lesko’s control, and family members of Lesko over the ten-year period 

preceding the Petition Date.25 The record also reflects that, during this time, Lesko 

22 ECF No. 61-4, p. 29, third paragraph. 

23 See, e.g., ECF No. 105-2, p. 2, ¶¶ 9-12. . 

24 ECF No. 44, p. 116, ¶ 4. (“[T]he board of directors continues to conduct the affairs of the HOA 

pursuant to its nefarious business model that only promotes fraud, self-dealing and waste of the HOA’s 

assets and the assets of its members.”)

25 ECF No. 100-1, p.2. 

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and other directors imposed outrageous “fines” upon residents for mundane acts like

walking a dog.26

Books and records describing the Debtor’s financial dealings over the course of 

many of the years in question have mysteriously disappeared, ostensibly due to 

Hurricane Irma. As a result, it is impossible to track exactly how much of Debtor’s 

income was attributable to normal sources, like maintenance fees, and how much 

derived from more nefarious sources. Despite this difficulty, there is ample evidence 

in the record to indicate that Lesko and other directors hustled resident members of 

Debtor by assessing trumped-up fees and blocking any normal avenue of inquiry.27

Prepetition transfers totaling in the hundreds of thousands of dollars were paid 

by Debtor to Lesko prior to November 2016. The amounts now sought in the Lesko 

Claim are in excess of those amounts. Although all amounts asserted in the Lesko 

Claim are invalid, it is the Bonus Claim that most clearly shows the detrimental 

impact of Lesko’s actions upon the members of Debtor. 

The “bonus” structure crafted by Lesko and enforced by Debtor’s directors 

rewarded Lesko and other actors, including Steven Goldfarb and McDonald Storey

“Storey”), for acts that ventured into thuggery.28 Deposition testimony reveals that 

26 ECF No. 105-2, p.2, ¶ 9. 

27 ECF No. 105-2, p. 2, ¶¶ 9-12. 

28 Goldfarb and Storey each received compensation as a result of Lesko’s unlawful acts and thus were 

incentivized to aid Lesko. 

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directors imposed fines and penalties to extort compliance from Debtor’s members 

who sought to fight back via standard provisions of Florida Statutes and the Bylaws.29

More distressing, sworn testimony from Debtor’s prior members includes 

allegations of directors victimizing residents by breaking into homes, refusing to 

permit rentals, threatening to poison pets, and promising bodily harm.30 These tactics 

were the means by which Lesko “recovered” funds for Debtor under the auspices of 

the Consulting Agreement. It is upon those “recovered” funds that Lesko now bases 

his Bonus Claim.

For obvious reasons, this Court cannot condone Lesko’s actions. The State 

Court reached an identical conclusion in the Receivership Order.31 Even if the Court 

could consider itself free to ignore the State Court’s findings because the Receivership 

Action was solely against Debtor, not Debtor’s directors, the Court is strongly 

persuaded that the record in this action provides abundant proof of prepetition 

misdeeds by Lesko.32 Those misdeeds eviscerate any potential claim for “services” 

rendered pursuant to the Consulting Agreement, including prospective entitlement 

to “bonuses” procured through harm to Debtor and Debtor’s resident members. 

All of these facts support the Court’s conclusion that Lesko’s Bonus Claim must 

fail for equitable reasons alone, and must be valued at zero. The Bonus Claim also is 

29 ECF NO. 105-1, p.2, ¶¶ 6- 9. 

30 See generally ECF Nos. 61-6; 61-7; 105-2; and 105-5. 

31 ECF No. 44, p. 116, ¶ 4.

32 The record in this action also provides ample proof of misdeeds by Goldfarb and Storey. 

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invalid because it, like the Wage Claim, Severance Claim, and Delinquency Claim, 

was the product of ultra vires acts by Lesko and other directors. The Court will 

elaborate further upon that point below. 

For these reasons, Trustee’s objection to the Bonus Claim is sustained.

C. Severance Claim

Lesko bases his Severance Claim upon a resolution dated March 1, 2019 (the 

“2019 Resolution”). In a prior opinion in Debtor’s Bankruptcy Case, the Court 

assessed the probable validity of the 2019 Resolution and found it highly lacking.33

As the Court’s analysis of the record has expanded to include issues asserted in this 

Adversary Proceeding, the Court’s initial concern over the circumstances under which 

Debtor’s directors adopted the 2019 Resolution has grown exponentially.

Deposition testimony from several members of Debtor paints a picture of 

dictatorial rule in early 2019. The declarations submitted by Debtor’s prior members

are disturbing. Even without this testimony, however, the Court cannot accept the 

2019 Resolution at face value for numerous reasons, many of which have already been 

discussed at length in the Indemnity Opinion. The Court will address a few of the 

more compelling reasons now.34

First, Debtor’s debt load exceeded allowable limitations under Debtor’s Bylaws 

at the time of adoption of the 2019 Resolution.35 Lesko stipulated that the limit of 

33 In re Villas of Windmill Point II Prop. Owners Ass’n, Inc., Case No. 19-20400, 2021 WL 814118 

(Bankr. S.D. Fla. Mar. 2, 2021) (“Indemnity Opinion”).

34 The Indemnity Opinion provides additional analysis and context equally applicable to this Opinion. 

35 ECF No. 101, p.14, ¶¶ 63-65.

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permissible debt under the Bylaws was $640,800 as of March 2019, and Debtor 

already had exceeded $640,800 of debt by that date.36 The Bylaws therefore 

specifically prohibited the Debtor from taking on any further debt.37 As a result, the 

Severance Claim awarded by the Board of Directors pursuant to the 2019 Resolution 

was invalid because it purported to create more debt in violation of the Bylaws. 

Second, the retention of Lesko via Lesko Consulting was the very definition of 

a self-interested action. Lesko signed the Consulting Agreement as both an officer of 

Lesko Consulting and an officer of Debtor.38 That trend continued with the 

Addendum and again with the 2019 Resolution. Lesko has not provided the Court 

with record evidence showing that a requisite number of disinterested directors 

approved of Lesko Consulting’s initial engagement, his claim to “bonuses” for his 

services, or severance pay from his role as a “volunteer” director. 

A minor point—but one worth noting—is that the dictionary definition of 

“volunteer”39 implies that no payment would be tendered for Lesko’s services as a 

director. If Lesko was truly a volunteer, then no severance would need to be paid 

when he relinquished his role as a director.

Third, the Court observes that the adoption of the 2019 Resolution was not in 

accordance with Debtor’s Bylaws or applicable state law. This leads us to the most

36 Id.

37 See Bylaws Art. VI, § 4 (Case No. 19-20400, ECF No. 332-2, p. 6). 

38 ECF No. 61-4, p. 29. 

39 See, e.g., https://dictionary.cambridge.org/us/dictionary/english/volunteer.

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important reason why the Severance Claim must fail: it is premised upon acts that 

violated Lesko’s fiduciary duties as a director.40

Florida Statutes § 720.303(1) provides that “[t]he officers and directors of an 

association have a fiduciary relationship to the members who are served by the 

association.” Neither the Consulting Agreement nor the 2019 Resolution relieved 

Lesko and the other directors from this statutory duty. The Bylaws also required 

Lesko and other directors, as agents of Debtor, to take actions that “promote[d] the 

common benefit and enjoyment of the residents”.41 And, to ensure that officers and 

directors do not neglect or fail to appreciate the importance of their role as fiduciaries, 

Florida Statutes § 720.3033(1)(a) requires directors to complete a written certificate 

attesting that a director will “faithfully discharge his or her fiduciary responsibility 

to the association’s members.” Although Lesko has never presented the Court with a 

copy of this certificate, the Court will assume arguendo that it exists because Florida 

Statutes specifically mandate that it exist. 

Florida Statutes and the Bylaws impose restrictions upon the ability of officers 

and directors to act on behalf of Debtor. Those limitations include (i) proper notice of 

meetings, (ii) prohibitions against bribes and kickbacks, and (iii) special precautions 

40 To the extent that either Goldfarb or Storey participated in or aided Lesko’s acts through their own 

actions or inactions, they are equally unable to claim compensation from Debtor. 

41 ECF No. 332-2 in Case No. 19-20400, p. 4 (Art. VI, § 1.q.). The Court takes judicial notice that this 

copy of the Bylaws is identical to a version filed in the Official Records of St. Lucie County. See File 

Number: 1657800, recorded August 24, 1998 at OR Book 1167, Pages 1103-21. Because the recorded 

version is barely legible, citations herein to Debtor’s “Bylaws” are to the copy docketed in the 

Bankruptcy Case. 

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to be observed for transactions in which the officer or director is self-interested.42

Lesko and the other directors deliberately flaunted these restrictions. 

Directors, including Lesko, failed to give proper notice of meetings.43 Those 

failures extended to notice of the meeting at which the directors purportedly approved 

the 2019 Resolution.44 Members seeking appropriate disclosure of transactions 

involving Lesko were actively thwarted in their attempts to secure information.45

Many (if not all) resident members were unable to voice potential opposition to the 

2019 Resolution. 

Failure to provide adequate notice is but one reason why the Severance Claim 

is invalid. The manner in which notice was provided and intentional hurdles thrown 

in the path of resident members who indicated an intent to oppose the actions of the 

board of directors show that the benefits accruing to Lesko and other directors from 

those transactions were little more than a raid of the HOA’s proverbial piggy bank. 

Fourth, the timing of adoption of the 2019 Resolution on March 1, 2019 

strongly indicates bad faith. At the time of its adoption, the receivership action 

(“Receivership Action”) had been pending in the State Court for over two years. The 

State Court entered a judicial default (“Default Judgment”) on December 21, 2018, 

42 Fla. Stat. § 720.3033(3) & (12); Fla. Stat. § 720.306; Bylaws, Art. VI, X, XI, XIII, & XVII. C.f. In re 

Toy King Distributors, Inc., 256 B.R. 1, 173 (Bankr. N.D. Fla. 2000) (describing duties of good faith 

and fair dealing). 

43 ECF No. 105-3, p. 2-4. 

44 Id.

45 Id.

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citing numerous willful discovery violations by Debtor.46 It could not have been lost 

on Lesko and the other directors by March 2019 that their domination over the HOA 

was about to be lost. Entry of the Receivership Order on August 2, 2019 wresting 

control away from the directors coincided with the Petition Date, a point not lost upon 

this Court. Had Trustee not been appointed pursuant to this Court’s August 21, 2019 

order, it is possible that Debtor’s directors might have further plundered Debtor’s 

coffers during the early days of the Bankruptcy Case. 

The list of reasons enumerated above cannot possibly address every aspect in 

which Lesko and his fellow directors violated the Bylaws. The bloated state of the 

record makes pinpointing each violation extraordinarily difficult. That being said, the 

Court will list a few other significant observations: (i) the purported “vote” count for 

approval of the 2019 Resolution included units held by the association upon which 

directors held (invalid) mortgages, (ii) viewing the record as a whole, the only 

plausible explanation for the directors’ approval of the 2019 Resolution was the 

“kickback” of mortgages for voting directors, and (iii) several members testified that 

they turned down bribes (or what those members perceived as bribes) from Lesko and 

other directors in exchange for member votes.47

Based upon all of these findings, the Court concludes that the 2019 Resolution 

was invalid. The Severance Claim is thus invalid and must be valued at zero. And, 

46 ECF No. 44, p. 98, ¶ 19 (“Although the depositions were court-ordered and noticed by Plaintiff’s 

attorney, HOA President Thomas Lesko testified that he unilaterally and willfully instructed one of 

Defendant’s attorneys to ‘cancel’ the October 31, 2017 depositions of the three directors, hence the 

reason for their non-appearance.”) 

47 ECF No. 105-5, p. 5, ¶ 23.

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having made this determination, the Court further determines that each of the 

mortgage liens allegedly created by the 2019 Resolution and purportedly held by 

Lesko (or any of the other directors) (collectively, the “2019 Mortgages”) is a legal 

nullity, and none of the liens arising from the 2019 Mortgages attach to the proceeds 

of the Sale.48

For these reasons, Trustee’s objection to the Severance Claim is sustained. 

D. Delinquency Claim 

The Delinquency Claim is an offshoot of the Bonus Claim and Severance 

Claim. The Court’s determination that the Bonus Claim and Severance Claim are 

invalid means that there is no Delinquency Claim. Accordingly, the Delinquency

Claim fails as a matter of law, and Trustee’s objection to the Delinquency Claim is 

sustained. 

E. Kingdom Trust

The record reflects that Kingdom Trust is an investment vehicle for Lesko. 

Kingdom Trust did not file a separate proof of claim. Because the Lesko Claim is 

invalid, any derivative claim potentially assertible by Kingdom Trust is likewise 

invalid. 

48 The Court need not address title issues relating to these invalid mortgages because entry of the Sale 

Order effectively wiped out each of the 2019 Mortgages, and transferred the liens evidenced by the 

2019 Mortgages to the proceeds of sale, subject to the Court’s determination of the validity of the debt 

secured by such liens. Sale Order, at pp. 9-10, ¶F.

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II. Count VII – Constructive Fraudulent Transfer

The Lesko Claim is wholly invalid for the reasons already described in detail

above. There is no reason for the Court to delve into further analysis of additional 

bases that might prevent Lesko from asserting a claim against Debtor’s estate. For 

this reason, the Court declines to award summary judgment as to Count VII. 

Before concluding, however, the Court will note that the bloated and 

sometimes incoherent status of the record makes it extraordinarily difficult to 

ascertain (i) precisely which transfers to Lesko by Debtor were allegedly fraudulent, 

and (ii) the factual circumstances surrounding each of those transfers. As a result, 

summary judgment on Count VII would be inappropriate in any instance.

Accordingly, it is hereby ORDERED and ADJUDGED that:

1. Trustee’s Motion (ECF No. 59) is granted in part and denied in part, as 

more fully set forth below.

2. Trustee’s objection to the Lesko Claim is SUSTAINED.

3. The Court GRANTS summary judgment in favor of Trustee as to Count 

I of the Amended Complaint against Lesko and Kingdom Trust.

4. The Court DENIES summary judgment as to Count VII of the Amended 

Complaint.

5. The Court retains jurisdiction over the implementation and 

interpretation of this Order pending resolution of this Adversary Proceeding. 

###

Copy to:

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Eyal Berger, Esq. 

Attorney Berger is directed to serve a copy of this order upon all interested parties and 

file a conforming certificate of service. 

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