Debtors’ Managers Allegedly Used Company’s Account to Pay Its Own and other Entities’ Personal Expenses, Trustee Brings a Fraudulent Conveyance Action
March 13, 2021, District of New Jersey – Trustee Daniel E. Straffi for the bankruptcy estate of Camp Harmony, Inc. (the “Debtor”) accuses Defendant Public Service Electric & Gas Company (the “Defendant”) for receipt of fraudulent transfers.
Debtor ran a yearly 8-week summer camp for approximately 200 to 300 campers aged 2 to 15 years at its property. Jerry Amedeo, Elyse Greenbaum, and Nicole Griffith were the owners of the Debtor. Amedeo and his wife were also the owners and principals of other related entities, Ugga Bugga Productions, LLC and The Orchard Academy, LLC (the “Non-Debtor Entities”). According to the complaint, the Debtor made various transfers in the form of payments in the aggregate amount of $67,273.88 to Defendant, during the four years before the Debtors bankruptcy.
The complaint alleges that Amedeo and his wife engaged in a pattern of conduct by which they directed, allowed, or caused the Debtor to make payments to various third parties for their own, the Non-Debtor Entities’ debts, obligations, and expenses to the exclusion and detriment of the estate and its creditors. Allegedly, the Debtor’s records reflected that the Debtor received no benefit for making the transfers.
According to the Trustee, the alleged transfers were made for the benefit of an insider; the Debtor concealed such transfers from its creditors and, the Debtor was or became insolvent shortly after such transfers were made or incurred. Moreover, the said transfers were made with the actual intent to hinder, delay, and defraud the Debtor’s creditors under N.J.S.A. §§ 25:2-25 and 25:2-26 and Sec. 544 of the Bankruptcy Code. Moreover, the Debtor reportedly did not receive any property, goods, services, indirect benefits or, the value of any kind for the alleged transfers. Thus, the plaintiff is entitled to avoid the transfers under sections 548(a)(1)(A) and 548(a)(1)(B) of the Bankruptcy Code as actual and constructively fraudulent.
The case is In re Camp Harmony, Inc., case number: 19-15298 in the United States Bankruptcy Court for the District of New Jersey. Honorable Christine M. Gravelle is overseeing the Debtor’s case. The Trustee is represented by Scott J. Freedman from Dilworth Paxson LLP.