Thelen LLP Chapter 7 Bankruptcy Trustee Files Adversary Proceedings against Former Partners, Their New Law Firms

From September 15, 2011 to September 17, 2011, Yann Geron, as Chapter 7 Trustee in the bankruptcy of the former law firm Thelen LLC, filed 98 adversary proceeding complaints in the Southern District of New York against  former Thelen partners and their new law firms and former Thelen clients.    The Trustee sets the stage for each of these mass filing by describing Thelen’s rapid demise — from December 2006, when Thelen had 630 attorney’s, including 219 equity partners, to Thelen’s decision in October 2008 to dissolve the firm leaving $223 million in liabilities in excess of assets.

Chapter 7 Trustee Starts Dean & Moore Insurance, Inc. Bankruptcy Transfer Avoidance Proceedings

On August 5, 2011, Tamara Miles Ogier, Trustee in the Dean & Moore Insurance, Inc. Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 29 complaints – 23 complaints include Georgia fraudulent conveyance claims O.C.G.A. Sec. 18-2-70; 12 include Section 548 fraudulent conveyance claims; certain complaints also include equitable subordination, other state law claims and a preferential transfer claim complaints in the Northern District of Georgia (Atlanta). The Debtor operated an insurance agency. The Trustee admits that the Debtor conducted both “legitimate and illegitimate” operations. The Trustee claims, however, that the Debtor’s activities constituted a Ponzi scheme, based in part on “obtaining policies for fictitious persons and entities and other activities that allowed Debtor to obtain funds through fraudulent representations.”

Chapter 7 Trustee Starts DHP Holdings II Corporation aka DESA Bankruptcy Preference Adversary Proceedings

On July 29, 2011 and July 30, 2011, Alfred Thomas Giuliano, Chapter 7 Trustee in the DHP Holdings II Corporation aka DESA Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 145 complaints in the District of Delaware.  The complaints are meticulous. Relationship pleading abounds. The identification of transfers crosses every “t” and dots every “i”.  When everything is pleaded with such attention to detail, the omission of a key fact tends to stick out. The omitted fact in these complaints – the date the interim Trustee’s appointment became permanent. Only the date of his interim appointment is pleaded.

Alfred T. Giuliano, Chapter 7 Trustee Starts Ultimate Acquisition Partners, LP Bankruptcy Preference Adversary Proceedings

On on July 19, 2011, Alfred T. Giuliano, Chapter 7 Trustee in the Ultimate Acquisition Partners, LP Bankruptcy, commenced Chapter 5 preferential transfer recovery litigation with the filing of 39 complaints in the District of Delaware.The debtors’ bankruptcy cases were filed on January 26, 2011 and Trustee Giuliano was appointed on May 4, 2011. This will be the first Delaware bankruptcy mass preference actions arising out of a case filed after the Delaware Bankruptcy Court made unequivocally clear that the days of “virtual, mail merge” preference complaints were over. Trustee Giuliano had the advantage of knowing the records he had to have and making sure that they were preserved.

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