September 30, 2021, Northern District of Georgia – The Trustee of Menser’s Chapter 7 bankruptcy estate sought to avoid the premium payments from Defendant Nationwide Mutual Insurance Company as fraudulent conveyances.
The Trustee argued that Nationwide was the initial or subsequent transferee of the premium payments. Further, the alleged payments were actual fraudulent transfers as one part of a much larger scheme by which Menser sheltered substantial assets from his creditors. The Trustee also alleged the payments were constructive fraudulent transfers because Menser did not own any of the assets insured, received no consideration for the premium payments, and was insolvent at the time of each payment. Nationwide moved the Court to dismiss the complaint, arguing that the complaint was a shotgun pleading and failed to allege facts to state a claim for relief.
The Court rejected Defendant’s argument and found that fraudulent transfers; to raise a plausible claim that Menser was insolvent at the time of the transfers; that he did not receive a reasonably equivalent value in exchange and, to state a claim for constructive fraudulent transfers.
Although the complaint had issues, including the incorporation of previous allegations in each successive count that made the complaint unnecessarily lengthy, the Court ruled that it was clear enough to allow Nationwide to understand the factual allegations relevant to each count. The Court held that any required amendment would elevate form over substance and denied Defendant’s motion to dismiss the complaint.
In re Menser, 2021 Bankr. LEXIS 2695, 2021 WL 4484894