Cobb & Cole Seeks to Dismiss IPS Worldwide Trustee’s $81 Million Clawback Action, Says Alleged Claims Barred by In Pari Delicto Doctrine
May 25, 2021, Middle District of Florida – Defendants, Cobb & Cole, P.A., and John P. Ferguson recently filed a motion to dismiss the amended adversary complaint of Trustee Alex D. Moglia in the bankruptcy case of IPS Worldwide, LLC (“IPS” or the “Debtor”). In his complaint, Trustee Moglia accused Defendants of alleged professional malpractice, breach of fiduciary duty, negligent supervision and retention, aiding and abetting breach of fiduciary duty. The Trustee also sought to avoid and recover alleged fraudulent transfers worth $ 81 million from the Defendants.
According to Plaintiff’s allegations, IPS purportedly embezzled, defalcated, and misappropriated its customers’ money, despite its counsel’s unequivocal advice to “stop.” In its motion to dismiss, Defendant argues that standing in the tainted shoes of IPS, the Plaintiff is allegedly seeking to repay the creditors of IPS by rewriting history to cast the blame on the Defendants for IPS’ brazen fraud and wanton embezzlement of customer funds, notwithstanding the clear and unequivocal advice the Defendants gave that was ignored by IPS and its principals.
The Defendants argue that Plaintiff’s allegations on the face of the amended complaint establish that Plaintiff’s claims are barred by in pari delicto and fail to state a claim due to lack of causation, statutes of limitations, and lack of standing. Accordingly, the Defendants argue that the amended complaint must be dismissed with prejudice.
The case is In re IPS Worldwide, LLC, Adversary Proceeding Number – 6:21-ap-00046 in the United Bankruptcy Court for Middle District of Florida. The law firm of Buss Ross is representing the Defendants. The Trustee is represented by the law firm of Genovese Joblove & Battista.