Western Surety Company Files Motion to Dismiss DAB Constructors Trustee’s Complaint Seeking Avoidance of Alleged Liens
March 12, 2022, Middle District of Florida – Defendant Western Surety Company files a motion to dismiss Trustee Arvind Mahendru’s complaint to avoid and recover alleged preferential transfer of rights in tangible personal property of the estate in the bankruptcy case of Debtor DAB Constructors, Inc.
The complaint seeks a declaratory judgment, holding that the Western Surety allegedly did not have any right of equitable subrogation as to the materials or any personal property. The complaint also seeks a declaratory judgment, finding that any alleged interest of the Defendant in certain vehicles is unperfected and such alleged interest must be avoided under Sections 544 and 550. The Trustee further argued that the assignment of personal property to the Western Surety is allegedly a grant of a security interest subject to Article 9 of the Florida Uniform Commercial Code. The Trustee argued that the Debtor was allegedly insolvent at all times during the preference period, as evidenced by the $197,251,771.96 in filed claims against the estate. The complaint states that the Debtor’s schedules reflect $19,730,787.08 in assets.
In its motion, Western Surety asserts that the Trustee allegedly fails to state a claim to avoid the alleged security interest in vehicles or personal property as a preferential transfer. Defendant argued that the “conditional assignment,” made by the Debtor was allegedly not on account of an antecedent debt as required under Section 547(c)(2), was not made within the 90 days before the date of the Debtor’s filing of the petition for relief, and did not allow the Defendant to receive more than it would have otherwise received in a Chapter 7 liquidation.
In re DAB Constructors, Inc., Case No.: 21-04053-GER