Opinion ID: 723744
Heading Depth: 2
Heading Rank: 1

Heading: The Trustee's Claims

Text: 3 The Trustee alleged in his complaint in the bankruptcy court that the debtors, Laser Associates, 3875 Associates, and 3471 Associates, were formed to invest, hold and manage real estate. The complaint alleged that the debtors executed a note and blanket second mortgage on the properties it owned in favor of Sally Rabine and Sonia Holdings, Ltd., purportedly to secure a $2 million loan, but received only $325,000. The Trustee also alleged that Sonia Holdings assigned its interest in the Note and Mortgage to defendant-appellant LAS Management Corp. In essence, the Trustee's claim was that the debtors gave the defendants a note and mortgage, but that the $2 million supposedly loaned to the debtors was delivered to parties other than the debtors. The Trustee alleged that, in fact, the $2 million was delivered to parties affiliated with the defendants. Thus, the Trustee claimed, the loan transaction was a fraudulent conveyance or preferential transfer in favor of appellants, among others, and the Trustee was entitled to avoid the transaction and recover the funds delivered to parties other than the debtors.