January 18, 2022, Northern District of California – Defendant UHY, LLP files a motion for summary judgment with the United States Bankruptcy Court for Northern District of California, seeking disposition of the claims in the first amended complaint filed by Trustee Sarah L. Little for the bankruptcy estate of Pacific Steel Casting Company, LLC.
In its complaint, the Trustee alleges that he seeks to avoid and recover a series of alleged illegal dividends, fraudulent conveyances, and improper insider payments for the benefit of the Debtor’s estate. Additionally, the Trustee contends that certain Defendants allegedly looted $14.35 million from the Debtor, resulting in more than $40 million in damages tied to incremental and avoidable indebtedness allegedly caused by Defendants’ wrongful actions and omissions.
UHY alleges that the doctrine of in pari delicto operates as a bar to the Trustee’s sole claim against UHY. UHY further asserts that the Trustee cannot prove that UHY substantially assisted its co-defendants to loot Pacific Steel, and accordingly, the Court should grant UHY’s Motion.
In re PACIFIC STEEL CASTING COMPANY LLC, Adversary Case No. 19-04057