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June 29, 2022, US District Court for Southern New York – Albert Togut, as Chapter 7 trustee (“Trustee”) of the estate of Kossoff PLLC (“Debtor”) seeks to clawback $1.4 million from Valley National Bank (“VNB”) and Mitchell H. Kossoff (“Mr. Kossoff”) among others with the allegations of “fraudulent conveyances”.
The Trustee alleges that Mr. Kossoff – the sole member of the Debtor – allegedly misused funds in the Debtor’s bank accounts for the benefit of his family business, Burton Packaging Company, Inc. (“Burton”). He also allegedly caused the Debtor to incur financial obligations for his personal benefit without giving any consideration in exchange to the Debtor.
VNB allegedly granted funds to the Debtor which were then allegedly used to satisfy the loan obligations owed by Burton to VNB. The Trustee alleges that the sole purpose of these transactions was to benefit VNB and Mr. Kossoff, who guaranteed Burton’s obligations to VNB.
The complaint requests the Court to avoid the Debtor’s obligations owed to VNB, as “fraudulently” incurred; and to avoid the respective security interests granted to VNB in the Debtor’s assets. Trustee Togut also seeks to avoid and recover alleged “fraudulent” payments made to VNB to satisfy Burton’s obligations and various other transfers made to VNB in connection with the alleged “fraudulently” incurred obligations.
The Trustee pleads to recover from Mr. Kossoff and his mother, Phyllis Kossoff, the value of the property that the Debtor allegedly transferred to VNB for their alleged benefit, alleging it was a “fraudulent” transfer.
Albert Togut, as Chapter 7 Trustee of the Estate of Kossoff PLLC v. VNB New York, LLC et al. (In re Kossoff PLLC), AP No. 22-1113 , US District Court for Southern New York