Michael Levine, Inc. Accuses ARD Services, Inc. & Connect Apparel, Inc. of Alleged Fraud, Deceit, Negligent Misrepresentation, et al Seeks $6,000,000 as Damages
August 16, 2021, Central District of California – Plaintiffs and affiliated Chapter 11 Debtors in possession, Michael Levine, Inc. (“MLI”), and Laurence Alen Freidin brought an adversary proceeding seeking civil contempt and injunctive relief against Defendants ARD Services, Inc., Connect Apparel, Inc. and Sohrab Issakharian to prevent violation of the automatic stay and irreparable harm caused to the Debtors by virtue of Defendants alleged unlawful conduct.
Allegedly, as per the complaint, Defendants are wrongfully in possession of all of MLI’s inventory, a significant portion of MLI’s business operations and assert and maintain control over MLI’s inventory and business operations, including books and records, electronic records, cash registers, intellectual property, computers, and prepetition and post-petition revenue to the extent they have sold MLI’s inventory.
The Plaintiffs seek declaratory relief alleging that the Defendants willfully violated the automatic stay by retaining possession and control over property of MLI’s estate and by refusing to turn over the personal property and the proceeds derived therefrom under Sections 362(a)(1) and (3) of the Bankruptcy Code. The Plaintiffs accuses Defendants of fraud and deceit, negligent misrepresentation, conversion, intentional interference with prospective economic advantage and seeks damages estimated to be no less than six million dollars ($6,000,000), injunctive relief along with avoidance and recovery of preference transfers and turnover of property.
The case is In re Michael Levine, Inc. in the United States Bankruptcy Court for Central District of California being administered under case no. 2:21-ap-01169-ER.