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Home New Cases American Express National Bank Files a Motion to Dismiss Trustee Forman’s Complaint in CTE 1, LLC

American Express National Bank Files a Motion to Dismiss Trustee Forman’s Complaint in CTE 1, LLC


January 5, 2022, Southern District of New JerseyDefendant American Express National Bank (AENB) files a motion to dismiss Counts II and III of Trustee Charles M. Forman’s amended complaint to avoid and recover alleged transfers in the bankruptcy case of Debtor CTE 1, LLC (d/b/a Lexis of Englewood). The bank asserts that the Court must dismiss the Trustee’s amended complaint for failure to state a claim upon which relief can be granted. The bank reasons that the complaint fails to allege any specific facts to support an essential, prima facie elements of each of his alleged constructive fraudulent transfer claims asserted against AENB in those counts. AENB argues that the complaint does not meet the minimum standards for sufficiently pleading causes of action mandated by the United States Supreme Court and under the Federal Rules of Civil Procedure.

As pointed out in Defendant’s motion, the two causes of action at issue are Counts II and III. Counts II and III allege that payments made by CTE 1 to AENB are avoidable and recoverable as constructively fraudulent transfers under sections 548 and 550 of the Bankruptcy Code (over the two years preceding the petition date) and the New Jersey fraudulent transfer statute, NJS.A 25:2-25(b) (over the four years preceding the petition date). The two-year transfers that Forman seeks to avoid in Count II total just under $2.8 Million, while the four-year transfers he aims to avoid in Count III amount to just under $3 Million.

The next hearing date, in this case, is set for February 15, 2022, and the deadline to object to the motion to dismiss is February 8, 2022. Forman filed his original complaint against AENB on October 27, 2021, initiating the adversary proceeding, and then on November 23, 2021 (before AENB had filed a responsive pleading), filed his amended complaint. In its amended complaint, Forman added a count against AENB and sought to recover additional transfers allegedly made by the Debtor over both the original two-year and an extended four-year period before the petition date. 

The case is In re: CTE 1, LLC (d/b/a Lexis of Englewood), Adv. Pro. No. 21-01437


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