LaBarbera v. Audax Construction

U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
Employment

New York Law Journal

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Judge Sandra Townes

Audax Construction signed a bargaining agreement with a labor union. It became insolvent after purportedly fraudulent transfers—between 2004 and 2006—of $3 million to its three shareholders, stripping its assets. In 2007, Audax was held liable to several union benefit funds for underpayments to Ferrara Equipment's employees. In 2009, Audax was ordered to pay more than $1.16 million in delinquent contributions, interest, audit costs, and legal fees to the funds and submit its books and records for audit. That judgment remains unsatisfied and the records have never been submitted for audit. The court partly denied the subject funds' motion under Federal Rule of Civil Procedure 69 seeking a turnover order to set aside fraudulent conveyances and collect judgment from Audax's three shareholders. The motion was denied, without prejudice to the extent it sought to set aside the $3 million in fraudulent conveyances. The court found the shareholders improperly served. Thus it lacked personal jurisdiction over Audax's shareholders. Plaintiffs' motion to amend or supplement their complaint was granted only to the extent it sought to substitute two current trustees in place of named plaintiffs no longer trustees.

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