FRAUDULENT CONVEYANCES Nassau Academy of Law CLE Live ...

394 B.R. 721 Page 9394 B.R. 721, 50 Bankr.Ct.Dec. 192(Cite as: 394 B.R. 721)$4,592,000 to BL; $5,075,000 to BOA;$22,338,000 to JPMC; and $32,000,000 to SPM.( 66-70.)-------------------------------------------------------------------------------4 Pre-Petition Banks and Avoiding the liens securing the fraudulentSPMobligations alleged in Counts I through III,and recovering the value of the collateralreceived by the defendants from the debtorsunder 11 U.S.C. § 550. ( 71-75.)-------------------------------------------------------------------------------5 ABN, IDB, HSBC and Avoiding, under 11 U.S.C. § 544, the transfersSovereign Bankin the amounts of $14,025,784 to HSBC,$8,364,265 to ABN, $5,946,592 to IDB and$9,882,351 to Sovereign Bank. ( 76-83.)-------------------------------------------------------------------------------6 ABN, IDB, HSBC and Avoiding, under 11 U.S.C. § 548, the transfersSovereign Bankin the amounts of $14,025,784 to HSBC,$8,364,265 to ABN, $5,946,592 to IDB and$9,882,351 to Sovereign Bank. ( 84-92.)-------------------------------------------------------------------------------7 ABN, IDB, HSBC and Recovering, under 11 U.S.C. § 550(a), theSovereign Bankvalue of the payments made by the FortgangAffiliates to defendants ABN, IDB, HSBC andSovereign Bank, in amounts to be determinedat trial. ( 93-98.)-------------------------------------------------------------------------------*730 E. The Motions to DismissEach defendant moved separately to dismiss the Complaint.[FN7] The plaintiff concedes that the first fourclaims for relief depend upon a "collapsing" theory underwhich the Pre-Petition Banks and SPM should be heldliable for the reconveyance of the loan proceeds or gold tothe Fortgang Affiliates. (See Memorandum of Law in Oppositionto Defendants Motions to Dismiss the Complaintin its Entirety and with Prejudice, dated Feb. 4, 2008("Opposition Memo "), at 39-40)(ECF Doc. # 47.) Thedefendants (other than Sovereign Bank) argue that theplaintiffs have failed to plead the necessary elements tocollapse the transactions. The defendants implicated in thelast three claims point to several pleading deficiencies,and also contend that the plaintiff cannot avoid and recoverthe subsequent transferors unless it avoids the initialtransfer to the Fortgang Affiliates.FN7. See note 1 supra.DISCUSSIONOn a motion to dismiss a complaint under Fed.R.Civ.P.12(b)(6), a court must "accept all factual allegations in thecomplaint as true," Tellabs, Inc. v. Makor Issues &Rights, Ltd., --- U.S. ----, 127 S.Ct. 2499, 2509, 168L.Ed.2d 179 (2007); accord Leatherman v. TarrantCounty Narcotics Intelligence & Coordination Unit, 507U.S. 163, 164, 113 S.Ct. 1160, 122 L.Ed.2d 517 (1993),even if the allegations are doubtful in fact. Bell Atl. Corp.v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965, 167L.Ed.2d 929 (2007). The factual allegations must neverthelessbe plausible, In re Elevator Antitrust Litig., 502F.3d 47, 50 (2d Cir.2007); Iqbal v. Hasty, 490 F.3d 143,157-58 (2d Cir.2007), cert. granted sub nom. Ashcroft v.Iqbal, --- U.S. ----, 128 S.Ct. 2931, 171 L.Ed.2d 863(2008), and "raise a right to relief above the speculativelevel." Bell Atl. Corp., 127 S.Ct. at 1965; accord ATSICommcns., Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2dCir.2007). "[L]abels and conclusions, and a formulaicrecitation of the elements of a cause of action will notdo." Bell Atl. Corp., 127 S.Ct. at 1965; accord PaycomBilling Servs. v. Mastercard Intl., Inc., 467 F.3d 283, 289(2d Cir.2006)("we do not 'permit conclusory statements tosubstitute for minimally sufficient factual allegations.'")(quoting Furlong, M.D. v. Long Island Coll. Hosp., 710F.2d 922, 927 (2d Cir.1983)); Amron v. Morgan StanleyInv. Advisors Inc., 464 F.3d 338, 344 (2d Cir.2006)("baldassertions and conclusions of law will not suffice" to de-© 2009 Thomson Reuters. No Claim to Orig. US Gov. Works.