Klausner Lumber One LLC Sues an Austrian Company for $2M in Alleged Fraudulent Transfers
May 4, 2021, District of Delaware – Last week, Debtor-Plaintiff, Klausner Lumber One LLC (“KL1”) initiated a complaint against Defendant, Scharpenack GmbH (“Defendant” or “Scharpenack”) for the avoidance of certain transfers allegedly made by the Debtor to the Defendant within 2 years before the date of the filing of the bankruptcy petition. Plaintiff also seeks to avoid certain obligations to Scharpenack that KL1 allegedly assumed before the filing of KL1’s bankruptcy case. Additionally, KL1 objects to the amended proof of claim filed by Scharpenack against KL1 [Claim No. 126] (the “Claim”).
Defendant Scharpenack GmbH, an Austrian company, is a financial advisor that KL1 allegedly retained long before it commenced the bankruptcy case. As alleged in the complaint, Scharpenack entered into a consulting contract with an indirect parent of KL1, Klausner Nordamerika Beteiligungs GmbH (“Nordamerika”). The contract purportedly required Scharpenack to support the management of clients in the initial balance sheet consolidation of three operationally active U.S.-based companies along with other related entities. Subsequently, Scharpenack entered into an amendment of the contract. The amendment differed from the contract in that it was allegedly executed by not only Nordamerika but also by KL1, Klausner Lumber Two LLC (“KL2”), and by Klausner Holding USA, Inc. The amendment also authorized a success fee of $2,000,000 to Scharpenack.
Plaintiff alleges that the Scharpenack amendment was an obligation incurred by KL1 during the two years before the petition date. Further, Plaintiff argues that based on KL1’s schedules and the statement of financial affairs, the value received in exchange for KL1’s assets as compared to the liabilities existing against those assets at the time of Scharpenack amendment was allegedly not reasonably equivalent. KL1’s liabilities exceeded the value of its assets and hence it received less than reasonably equivalent in exchange for the obligations imposed on KL1 in the Scharpenack amendment. Thus, the complaint contends that the amendment is avoidable under section 548(a)(1)(b) of the Bankruptcy Code. Plaintiff also objects to the claim, alleging that claim is unenforceable because KLI was not a party to the contract. Adding further, Plaintiff argues that the claim is unenforceable against KL1 because the Scharpenack amendment was allegedly not supported by any consideration and the success fee is liable to be avoided under Section 548 of the Bankruptcy Code.
Accordingly, Plaintiff requests the Court to avoid the Scharpenack amendment, disallow the claim in its entirety and enter judgment in favor of KL1 for all costs expended and incurred in connection with the case.
The case is In re Klausner Lumber One, LLC in the United States Bankruptcy Court for the District of Delaware, Case No. – 21-50430-KBO.