VOIP Guardian Partners I Accuses Former Directors and Officers Of Breach of Their Fiduciary Duty of Care and Loyalty, Also Seeks to Clawback Preferential Transfers and Fraudulent Conveyances

March 16, 2021, Central District of California – Trustee Timothy Yoo for the bankruptcy estate of VoIP Guardian Partners I, LLC (the “Debtor”) seeks damages from certain former directors and officers of the Debtor for breach of their fiduciary duty of care and loyalty in their prepetition management of the Debtor’s telecom factoring business. The Trustee further seeks damages from the  Debtor’s directors and officers for their wholesale disregard of the Debtor’s (and its investors’) well-being and for their apparent self- dealing. The Plaintiff also seeks to recover avoidable transfers from various defendants (and groups of defendants) as preferences and fraudulent conveyances.

The Trustee argues that the alleged transfers directly led to the demise of the Debtor and caused loss of over $200 million. The Trustee seeks recovery on open invoices owed to the Debtor, on guarantees of contracts for monies owed, and objects to the proof of claim filed by Defendant VoIP Guardian LLC (the “Management Company”) in the Debtor’s bankruptcy case.    

Allegedly, the former officers and directors of the Debtor deliberately or recklessly mismanaged the Debtor’s affairs by engaging in a highly technical and complex telecom factoring business with questionable foreign entities. Telecom providers generally fall into three Tiers: Tier 1 (major, nationally recognized providers such as Verizon, AT&T, British Telecom, etc.), Tier 2 (mid-level providers) and Tier 3 (relatively small companies that generally provide local services). Because the Debtor’s primary function was to lend and advance money to its Tier 3 customers, one of the Debtor’s most critical assets was investment capital on hand to lend out. The Debtor’s primary investor was Direct Lending Investments (“DLI”), which invested approximately $192 million. DLI itself was an investment vehicle that pooled money from various investors who signed subscription agreements with DLI (and its management) and provided funds for DLI to then re-invest. Thus, the flow of funds often started with DLI’s private investors, who provided funds to DLI; DLI would then invest those funds in the Debtor, who would then advance funds to its Tier 3 factoring clients.The case is In re VOIP Guardian Partners, LLC, Case number – 2:19-bk-12607-BR in the central District of California

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