S&M Heating v. Macaluso

SUFFOLK COUNTY
Real Property

New York Law Journal

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Justice Elizabeth H. Emerson

Plaintiffs sought to add Bobco Inc., Bobco Transport and the Faustos as party defendants to the existing causes of action, arguing defendants FTF Transport and Next Generation, owned by the Faustos, transferred all or substantially all of their assets to Bobco, despite pending litigation. The court noted, however, that plaintiffs did not allege the purported transfers to Bobco were made without fair consideration, that FTF and Next were insolvent when they were made, or the transfers rendered them insolvent. Thus, the court ruled plaintiffs failed to state a claim under Debtor and Creditor Law §273. Also, as plaintiffs have not obtained a judgment against defendants, they failed to state a claim under §273-a, as the existence of an unsatisfied judgment was an essential element of a claim under §273-a. The court stated to set aside a transfer as fraudulent under §276, a creditor needed to show actual intent to defraud on the transferor's part. It ruled plaintiffs' allegations were insufficient to demonstrate actual intent, and without more, plaintiffs failed to state a claim under §276. The court denied the motion insofar as it sought to add the Faustos and Bobco as party defendants to the existing causes of action, including breach of fiduciary duty and breach of contract.

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