Complaint — In re Panthera Enterprises, LLC, Case No. 2:19-bk-00787 (Chapter 7); Aaron C. Amore, Chapter 7 Trustee, West Virginia Economic Development Authority, and Panthera Training, LLC v. TR&L, LLC, SMI, LLC, Theresa Morgoglione, James Punelli, Raymond Jones, Panthera Training Center, LLC, and Panthera Worldwide, LLC, Adversary Proceeding No. 2:21-ap-00002
- Date
- 2021-02-12
This source document is titled Complaint and is classified in controlled metadata as adversary complaint.
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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA
In re:
PANTHERA ENTERPRISES, LLC,
Debtor
BK No. 2:19-bk-00787
Chapter 7
AP No.
AARON C. AMORE, Chapter 7
Trustee, WEST VIRGINIA ECONOMIC
DEVELOPMENT AUTHORITY, and
PANTHERA TRAINING, LLC,
Plaintiffs
v.
TR&L, LLC, and SMI, LLC, THERESA
MORGOGLIONE, JAMES PUNELLI,
RAYMOND JONES, PANTHERA
TRAINING CENTER LLC AND
PANTHERA WORLDWIDE LLC,
Defendants
COMPLAINT
Aaron A. Amore, Chapter 7 Trustee ("Trustee"), West Virginia Economic Development
Authority ("WVEDA"), and Panthera Training, LLC ("Training"), by their respective counsel, file
this Complaint to void certain pre-petition transfers made by the debtor Panthera Enterprises, LLC
("Debtor") and Panthera Training Center LLC, the Debtor's subsidiary, and to obtain declaratory
relief as to the rights to certain personal property.
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Jurisdiction and Venue
1.
This Court has jurisdiction to hear this Complaint pursuant to 28 U.S.C. § 1334.
This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b). This Court has
supplemental jurisdiction under 28 U.S.C. § 1367 to hear the claims under West Virginia law as
those claims are so related to the Bankruptcy Code claims that they form part of the same case or
controversy. Plaintiffs consent to entry of a final order or judgment by this Bankruptcy Court.
2.
Venue is proper in this district pursuant to 28 U.S.C. §§ 1408 and 1409.
3.
This adversary proceeding is commenced pursuant to Rule 7001(2) of the Federal
Rules of Bankruptcy Procedure, and 11 U.S.C. § 105(a). The Trustee seeks relief under 11 U.S.C.
§§ 548. The Trustee, via 11 U.S.C. § 544(b), WVEDA and Training seek relief under W.Va. Code
§§ 40-1A-1 et seq.
4.
Declaratory relief is appropriate pursuant to Bankruptcy Rule 7001(9) and 28
U.S.C. §§ 2201 and 2202. An actual legal controversy exists regarding rights to certain real and
personal property transferred by the Debtor and its related entities.
Parties
5.
Plaintiff Aaron C. Amore is the Chapter 7 Trustee appointed for the bankruptcy
estate of Panthera Enterprises, LLC, the Debtor herein.
6.
Plaintiff WVEDA is a secured creditor of the Debtor, with a first priority lien
against the Debtor's Property (as defined herein), including fixtures and rents.
7.
Plaintiff Training is a Virginia limited liability company that leases the Debtor's
Property and personal property pursuant to a Commercial Lease with the Debtor and is a
subcontractor to the Debtor and Panthera Training Center, LLC, to provide certain training.
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8.
Defendant TR&L, LLC ("TR&L") is a Virginia limited liability company with its
principal office address at 123 E. Main Street, 5th Floor, Charlottesville, VA 22902. Its agent for
service of process is Timothy I. Kelsey, with an office address of 123 E. Main Street, 5th Floor,
Charlottesville, VA 22902. On information and belief, TR&L is the successor in interest to SMI,
LLC.
9.
Defendant SMI, LLC ("SMI") is a Virginia limited liability company, registered
with the Virginia State Corporation Commission as "active." Its principal office address is shown
as 475 West Huntingdon Lane, Boyce, VA 22620. SMI's agent for service of process is John D.
Schutte, 475 West Huntingdon Lane, PO Box 5, Boyce, VA 22620.
10.
Defendant Theresa Morgoglione is an individual, believed to reside at or have an
office at 218 W. Water St. #400, Charlottesville, VA 22902.
11.
Defendant Panthera Training Center, LLC ("PTC") is a Delaware limited liability
company. It is owned 80% by the Debtor and 20% by a private individual, which individual is not
involved in the operations of the Debtor or PTC. PTC's agent for service of process is Agents and
Corporations, Inc., 1201 Orange St., Suite 600, One Commerce Center, Wilmington, Delaware
19801.
12.
Defendant Panthera Worldwide LLC ("Worldwide") is a Delaware limited liability
company, and is a subsidiary of the Debtor. Its agent for service of process is Agents and
Corporations, Inc., 1201 Orange St., Suite 600, One Commerce Center, Wilmington, Delaware
19801.
13.
Defendant James Punelli ("Punelli") is an individual, with a last known address of
20214 Leier Place, Ashburn, Virginia 20147-3692. Punelli is a 50% owner of the Debtor. He
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and Raymond Jones are both officers and managers of the Debtor (until conversion to Chapter 7),
PTC, and Worldwide.
14.
Defendant Raymond Jones ("Jones") is an individual, with a last known address of
43787 Bent Creek Terrace, Leesburg, Va 20176. Jones is a 50% owner of the Debtor. He and
Punelli are both officers and managers of the Debtor (until conversion to Chapter 7), PTC and
Worldwide.
Factual Background
15.
Debtor initiated this bankruptcy case on September 13, 2019, with the filing of a
voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code.
16.
The bankruptcy case was converted to a Chapter 7 proceeding by Order of the
Court entered July 21, 2020. Aaron C. Amore ("Trustee") was appointed the Chapter 7 Trustee.
ECF # 202.
17.
Debtor holds title to approximately 748 acres in Hardy County, West Virginia
("Property"), which is the site of a security operations tactical training facility for personnel
involved in military and non-military protective services ("Facility").
18.
Debtor does not and never has operated the Facility, nor does Debtor provide any
of the specialized training that is conducted at the Facility. Until June 1, 2018, the Facility was
operated by the Debtor's subsidiary, PTC.
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Loans made to the Debtor by the WVEDA
19.
Prepetition, on August 21, 2013, WVEDA made a loan to the Debtor1 in the
original principal amount of $5,000,000 ("2013 Loan"). ECF # 52-2, pp. 44-47. The 2013 Loan
financed a portion of the Debtor's cost to acquire the first 689.40 acres of the Debtor's Property.
20.
The 2013 Loan is secured by a Credit Line Deed of Trust and Fixture Filing,
granting WVEDA a first lien on the 689.40 acre tract acquired by the Debtor. ECF # 52-3, pp. 2-
24. The 2013 Loan is also secured by a Collateral Assignment of Leases and Rents. ECF # 52-3,
pp. 26-38.
21.
WVEDA made a second loan to the Debtor on July 2, 2014, in the original principal
amount of $1,871,505.00. ECF # 52-4, pp. 2-5. This loan financed the acquisition of the additional
58.09 acre tract adjacent to the 689.40 acre tract ("2014 Loan"). Proceeds of the 2014 Loan were
also used to construct improvements and renovations on the Property.
22.
The 2014 Loan is secured by a second Credit Line Deed of Trust and Fixture Filing,
granting WVEDA a subordinate lien on the 689.40 acre tract and a first lien on the 58.09 acre tract.
ECF # 52-4, pp. 7-25. It is also secured by a Collateral Assignment of Leases and Rents. ECF #
52-4, pp. 27-35. Together, the 2013 Loan and the 2014 Loan are referred to as the "EDA Loans,"
and the two Credit Line Deeds of Trust and Fixture Filings securing the EDA Loans are referred
to as the "EDA Deeds of Trust."
23.
WVEDA filed a claim in the Debtor's bankruptcy case for approximately $6.48
million. Claim 4.
1 The Debtor was formed in 2011 as TenX Group LLC. On or about December 19, 2016, the Debtor's name
was changed to Panthera Enterprises LLC. However, the principals of the Debtor continued to use the
name "TenX Group LLC" in certain documents.
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Debtor's Default
24.
Debtor first defaulted on the EDA Loans in February of 2015, by failing to make
the monthly payments due under the terms of the respective promissory notes. The EDA Loans
were brought current in May of 2015, but the Debtor defaulted again in August of 2015. Debtor
made no payments on the EDA Loans in 2016.
25.
On May 20, 2017, the Debtor and WVEDA entered into a modified payment
arrangement whereby the Debtor agreed to pay $20,000 per month for each of the Loans.
However, the Debtor defaulted on the modified payment arrangement, making just three (3) of the
nine (9) payments that were to be paid between May 20, 2017 and February 28, 2018.
26.
On February 28, 2018, WVEDA sent a notice of default and demand for payment
to the Debtor and Guarantors, giving the obligors a deadline of March 31, 2018 to cure the default.
The Debtor paid nothing, and in May of 2018, WVEDA commenced a foreclosure proceeding
under the EDA Deeds of Trust.
27.
Shortly after commencing foreclosure, Debtor advised WVEDA that it had entered
into a Commercial Lease with Training, effective June 1, 2018, in addition to a Subcontract and
an Agreement for assignment of all Debtor's contracts to Training. ECF # 52-6, pp. 10-64
(Commercial Lease); ECF # 52-7, pp. 7 - 29 (Subcontract); ECF # 52-7, pp. 2-5 (Agreement for
assignment).
28.
Recitals to the Commercial Lease and the Agreement for assignment state the
Debtor is in default, that PTC is unable to operate the Facility in a manner that would allow
payment of the rent required, and that Debtor sought out the arrangement with Training "in an
effort to generate cash flow . . . to avoid an imminent foreclosure . . . and to possibly generate
additional funds allowing it, and its subsidiary companies, to pay their creditors."
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29.
Thereafter, the Debtor, WVEDA, the Debtor's guarantors, and Training entered into
a Forbearance Agreement, pursuant to which, among other things, the monthly rent payments due
under the Commercial Lease were to be paid by Training directly to WVEDA, to be applied to the
outstanding balances due and owing on the EDA Loans.
2018 Transfers to SMI
30.
In the months following execution of the contracts with Training and the
Forbearance Agreement, Training and WVEDA learned the Debtor had entered into a Timber
Agreement, and a Bill of Sale with SMI (together, the "2018 Transfers").
31.
In the time period prior to the 2018 transfers, the Debtor failed to make any
significant debt service payments on its outstanding obligations. The obligations to creditors
include, in addition to WVEDA, West Virginia Tax & Revenue, the Sheriff of Hardy County, West
Virginia, Howard Shockey & Sons, Inc., West Virginia Paving, Inc., Unity Technologies
Corporation, Brian Riso, Bruce Hardy, Azadian Group, LLC, Bill Neff Enterprises, Michael
Cranston, CPA and Dinsmore & Shohl, LLP.
32.
On information and belief, Roy Baker Duncan, II ("Duncan") is a member of SMI
and/or TR&L. TR&L filed two proofs of claim in this bankruptcy case, showing Duncan as the
Manager of TR&L and TR&L to be the successor to SMI. Claims 25, 26. The two claims are
both for $529,199.
33.
Duncan is also, on information and belief, a member/manager of Duncan
Development Group, LLC, a Virginia limited liability company, whose agent for service of process
is Timothy I. Kelsey. Duncan was employed by the Debtor beginning in or about August 5, 2013
through his member-managed Duncan Development Group, LLC. The employment continued
through and until the Debtor and its subsidiary PTC ceased operations. Nonetheless, Duncan
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Development Group, LLC filed a proof of claim for $379,231.20, asserting it continued to perform
services for which it and Duncan are entitled to compensation up to the filing of the voluntary
petition in September, 2019. Claim 24.
34.
Based on the foregoing, Duncan is asserted to be an insider, and as such, the 2018
Transfers benefitted an insider of the Debtor.
35.
On March 26, 2018, Debtor executed a Timber Agreement with SMI, pursuant to
which the Debtor purportedly sold "[t]he exclusive rights to all merchantable timber standing or
fallen on all . . ." of the Debtor's Property. This is the same Property that is subject to the EDA
Deeds of Trust the Debtor granted the WVEDA in 2013 and 2014.
36.
The term of the Timber Agreement is perpetual until the Debtor satisfies "all loan
documents between TenX and its affiliates and SMI."
37.
A Memorandum of the Timber Agreement was recorded in the Office of the County
Commission of Hardy County on May 24, 2018. However, the Memorandum shows the Timber
Agreement to be by and between TenX Group, LLC2 and Theresa Morgoglione ("Morgoglione").
On information and belief, Morgoglione acquired the Timber Agreement from SMI. ECF # 52-11
(copy of recorded Memorandum and Timber Agreement).
38.
The Timber Agreement states the consideration to be One Hundred Thousand
Dollars ($100,000) cash in hand and other valuable consideration. This stated consideration is not
a reasonably equivalent value for the substantive timber rights conveyed in a perpetuity agreement.
39.
On information and belief, there was no consideration paid on March 26, 2018 for
the Timber Agreement. Rather, on information and belief, the Timber Agreement was given to
satisfy the collection efforts of SMI for a loan made to the Debtor in 2015.
2 Notably, the Debtor changed its name to Panthera Enterprises, LLC two years prior, on or about December 19,
2016.
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40.
On June 15, 2018, Debtor, Punelli, Jones, PTC and Worldwide (together, "Seller")
executed a Bill of Sale, pursuant to which they purportedly sold
all of the Seller's rights, title and interest in the assets, inventory, vehicles, office
equipment, furnishing, other equipment, munitions, firearms, and other personal
property and equipment, . . . including but not limited to: All of Seller's equipment,
furniture, fixtures, machinery, merchandise, firearms, vehicles, supplies and
appliances, including, but not limited to, the specific items listed on the attached
Schedule A.
ECF # 52-8, pp. 10-13.
41.
The Schedule A attached to the Bill of Sale is believed to be the very same listing
of tangible personal property that is attached as Exhibit B to the Commercial Lease the Debtor and
PTC executed just fifteen (15) days prior, on June 1, 2018, leasing the very same property to
Training. At the time the Commercial Lease was negotiated, the Debtor represented it owned the
personal property identified in Exhibit B to the Commercial Lease, which Exhibit was prepared
with the assistance of Duncan acting on behalf of the Debtor.
42.
The Bill of Sale states the consideration to be One Dollar ($1.00) cash in hand. This
is not a reasonably equivalent value given the substantive value of the personal property and the
scope of property conveyed, purportedly not just by the Debtor but by all of its related entities, as
well as Punelli and Jones. Upon information and belief, the Bill of Sale was also given to satisfy
the collection efforts of SMI for loans made to the Debtor previously, in 2015, 2016, and 2017.
43.
SMI failed to file the required assessor's forms to show that it owned the personal
property purportedly conveyed on June 15, 2018. The personal property tax tickets remain in the
name of PTC with tax obligations accruing, which are directly related to the personal property
purportedly conveyed in the Bill of Sale. The claim of the Sheriff of Hardy County, West Virginia
was $45,656.32 as of the filing of its proof of claim on October 28, 2019. This obligation continues
to accrue.
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Modular Units
44.
On July 23, 2015, the Debtor and Bill V. Neff, Sr. ("Neff") executed a Contract of
Sale, pursuant to which Neff sold to the Debtor 38 Modular Office Units ("Modular Units"). The
Modular Units were already on the Property and used in the Facility on July 23, 2015 when the
Contract of Sale was executed, having been placed there in 2009, before the Debtor acquired the
Property.
45.
Between 2009 and July 2015, the Modular Units were leased to the Debtor or its
predecessor for use at the Facility. The Debtor's acquisition of the Modular Units in 2015
evidences the Debtor's intent to make the Modular Units a permanent part of the Property, i.e., an
improvement and fixture to the Property.
46.
After acquisition, on information belief, sometime between 2015 and 2016, the
Modular Units became permanently attached to the Property. The Modular Unit's undercarriage
sits on cinder blocks, which are set on concrete foundations, with the undercarriage affixed to the
ground with metal straps. The metal straps are, in turn, attached to large augers drilled into the
ground. The wheels that were attached to the undercarriages were removed upon installation. The
Modular Units are now permanently connected to sewer and electrical services and a fresh water
supply.
47.
The Modular Units are not only attached to the Property, but in many cases they
are tethered to each other. The Modular Units are reasonably necessary to and have been adapted
or modified to the purpose for which the Property is being used, as a security operations tactical
training facility. The modified Modular Units serve as, among other things, classrooms,
specialized training rooms, a cafeteria and offices.
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48.
Accordingly, as fixtures to the Property, the Modular Units are part and parcel of
the Debtor's realty.
49.
The Debtor granted and conveyed to WVEDA the Property and "[a]ll fixtures, fixed
assets and personalty of a permanent nature, owned by the Grantor [Debtor] now or at any time
hereafter annexed, affixed or attached to the Property . . . hereby conveyed." ECF # 52-3, p. 3;
ECF # 52-4, p. 8. Hence, the Modular Units are the WVEDA's collateral, securing the EDA Loans.
50.
In addition, pursuant to the terms of the Commercial Lease executed June 1, 2018
by the Debtor, the Debtor leased to Training the "real property and the buildings, structures and
other improvements and appurtenances thereon." Consequently, the Modular Units are also
subject to the Commercial Lease given to Training. ECF # 52-6, pp. 10-64.
51.
The Debtor scheduled the Modular Units as personal property of the Debtor, with
an estimated value of $900,946.18, based upon the purchase price. ECF # 23, Schedule A/B, # 50.
52.
Nonetheless, SMI or its successor, TR&L, has informally taken the position that
the Modular Units were sold to SMI with the June 15, 2018 Bill of Sale, and therefore, are now
the property of SMI/TR&L.
53.
Neff also asserted, in adversary proceeding 20-ap-00010 filed in this bankruptcy
case ("AP"), that he was the owner of the Modular Units. On November 4, 2020, this Court entered
its Order and Memorandum Opinion, holding that "the Debtor owned the modular units at the time
of filing, and the units are property of the Debtor's estate." 622 B.R. 201, 208 (Bankr. N.D. W.Va.
2020).
54.
SMI was not a party to the AP. However, SMI had actual notice of the AP and did
not intervene to protect its purported right as the owner of the Modular Units. Counsel for Neff,
plaintiff in the AP, also appeared in this bankruptcy case as counsel for SMI. ECF # 52-5, pp. 3,
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29 (transcript of 341 meeting); ECF # 97 (showing service of the AP to William J. Leon on behalf
of Creditor SMI, LLC). Setting aside for the moment the fraudulent nature of the Bill of Sale,
based on the foregoing, SMI should be estopped from making any claim to ownership of the
Modular Units.
Further Default by the Debtor
55.
The Timber Agreement and the Bill of Sale constituted further defaults by the
Debtor under the EDA Loans and EDA Deeds of Trust.
56.
In addition, in November, 2018, the 2017 tax liens for the delinquent real property
taxes were auctioned by the Hardy County Sheriff and certified to the West Virginia State Auditor's
Office for disposition, constituting another default.3
57.
Consequently, in August, 2019, WVEDA once more commenced a foreclosure of
the Property under the EDA Deeds of Trust. A foreclosure sale was scheduled and noticed for
September 16, 2019. Debtor filed its voluntary petition on September 13, 2019.
COUNT I
DECLARATORY RELIEF
58.
Plaintiffs reallege and incorporate by reference as though fully set forth herein
paragraphs 1 through 57.
59.
The competing claims against the Property, the personal property, and the Modular
Units constitute an actual legal controversy that exists regarding the rights to real and personal
property purportedly transferred by the Debtor and its related entities.
60.
The competing claims against the Property, the personal property, and the Modular
Units are impeding the Trustee's ability to administer this bankruptcy estate. Therefore, based
3 Debtor redeemed the Property in 2020.
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upon the allegations set forth herein, Plaintiffs seeks a judicial declaration, pursuant to 28 U.S.C.
§§ 2201, 2202 and 11 U.S.C. § 105(a), that
a.
the Timber Agreement and the rights granted thereunder are subject to the prior
liens of WVEDA;
b.
the purported sale of personal property of the Debtor, pursuant to the Bill of Sale,
is subject to Training's rights to the personal property under the Commercial Lease with the Debtor;
c.
the Modular Units are fixtures and part of the Debtor's real property, and therefore,
despite the Debtor's purported sale of the Modular Units to SMI, the Modular Units are subject to
the prior liens of WVEDA;
d.
the purported sale of the Modular Units, pursuant to the Bill of Sale, is subject to
the prior liens of WVEDA, and subject to Training's rights under the Commercial Lease.
COUNT II
Avoidance of Fraudulent Transfers Pursuant to 11 U.S.C. § 548 by Trustee
and Recovery of the Debtor's Property Pursuant to 11 U.S.C. § 550
61.
Trustee realleges and incorporates by reference as though fully set forth herein
paragraphs 1 through 60.
62.
The Debtor received less than reasonably equivalent value in exchange for the
Timber Agreement and for the Bill of Sale.
63.
The Debtor made the 2018 Transfers with actual intent to hinder, delay or defraud
its creditors.
64.
The Debtor was insolvent on the dates that the 2018 Transfers occurred or became
insolvent as a result of the 2018 Transfers.
65.
At the time of the 2018 Transfers, the Debtor already had debts that were beyond
its ability to pay as such debts matured or came due.
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66.
On information and belief, the 2018 Transfers were made to and for the benefit of
an insider and not in the ordinary course of business.
67.
For the above reasons stated, the 2018 Transfers were fraudulent pursuant to 11
U.S.C. § 548.
68.
SMI is the initial transferee and Morgoglione may be a subsequent transferee of the
timber rights conveyed pursuant to the Timber Agreement. SMI is the initial transferee of the
Debtor's personal property (including the Modular Units) conveyed pursuant to the Bill of Sale.
Under 11 U.S.C. § 550, the Trustee may recover, for the benefit of the bankruptcy estate, such
property transferred.
69.
Accordingly, the Trustee seeks an order of this Court (i) avoiding the fraudulent
2018 Transfers pursuant to 11 U.S.C. § 548, (ii) returning to the bankruptcy estate, pursuant to 11
U.S.C. § 550, the timber rights and the Debtor's personal property that was conveyed, and (iii)
awarding the Trustee such other and further relief as the Court deems appropriate.
COUNT III
Avoidance of Fraudulent Transfers Pursuant to 11 U.S.C. § 544(b) and W.Va.
Code § 40-1A-4, and Recovery of the Debtor's Property Pursuant to 11 U.S.C. § 550
70.
Plaintiffs reallege and incorporate by reference as though fully set forth herein
paragraphs 1 through 69.
71.
The Debtor made the 2018 Transfers with actual intent to hinder, delay or defraud
its creditors. The 2018 Transfers devalued the collateral pledged to the WVEDA and violated the
covenants contained in the EDA's Deeds of Trust. The Bill of Sale defrauded Training by
purportedly conveying personal property that was already leased to Training.
72.
The Debtor received less than reasonably equivalent value in exchange for the 2018
Transfers.
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73.
On the date of the 2018 Transfers, the Debtor already had debts that were beyond
its ability to pay as such debts became due.
74.
On information and belief, the 2018 Transfers were made to and for the benefit of
an insider and not in the ordinary course of business.
75.
For the above reasons stated, the 2018 Transfers were fraudulent pursuant to W.Va.
Code § 40-1A-4.
76.
SMI is the initial transferee and Morgoglione may be a subsequent transferee of the
timber rights conveyed pursuant to the Timber Agreement. SMI is the initial transferee of the
Debtor's personal property (including the Modular Units) conveyed pursuant to the Bill of Sale.
Under 11 U.S.C. § 550, the Trustee may recover, for the benefit of the bankruptcy estate, such
property transferred.
77.
Accordingly, Plaintiffs seek an order of this Court (i) avoiding the fraudulent 2018
Transfers pursuant to 11 U.S.C. § 544(b) and W.Va. Code § 40-1A-4, (ii) returning to the
bankruptcy estate, pursuant to 11 U.S.C. § 550, the timber rights and the Debtor's personal property
that was conveyed, and (iii) awarding the Trustee such other and further relief as the Court deems
appropriate, including any and all remedies available under W.Va. Code § 40-1A-7.
COUNT IV
Avoidance of Fraudulent Transfers Pursuant to 11 U.S.C. § 544(b) and W.Va.
Code § 40-1A-5, and Recovery of the Debtor's Property Pursuant to 11 U.S.C. § 550
78.
Plaintiffs reallege and incorporate by reference as though fully set forth herein
paragraphs 1 through 77.
79.
The Debtor made the 2018 Transfers without receiving a reasonably equivalent
value in exchange for the 2018 Transfers.
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80.
The Debtor was insolvent on the date of each of the 2018 Transfers or was rendered
insolvent as a result of each of the 2018 Transfers.
81.
On information and belief, the 2018 Transfers were made to and for the benefit of
an insider for an antecedent debt, which insider had reasonable cause to believe the Debtor was
insolvent.
82.
For the above reasons stated, the 2018 Transfers were fraudulent pursuant to W.Va.
Code § 40-1A-5.
83.
SMI is the initial transferee and Morgoglione may be a subsequent transferee of the
timber rights conveyed pursuant to the Timber Agreement. SMI is the initial transferee of the
Debtor's personal property (including the Modular Units) conveyed pursuant to the Bill of Sale.
Under 11 U.S.C. § 550, the Trustee may recover, for the benefit of the bankruptcy estate, such
property transferred.
84.
Accordingly, Plaintiffs seek an order of this Court (i) avoiding the fraudulent 2018
Transfers pursuant to 11 U.S.C. § 544(b) and W.Va. Code § 40-1A-5, (ii) returning to the
bankruptcy estate, pursuant to 11 U.S.C. § 550, the timber rights and the Debtor's personal property
that was conveyed, and (iii) awarding the Trustee such other and further relief as the Court deems
appropriate, including any and all remedies available under W.Va. Code § 40-1A-7.
Prayer for Relief
WHEREFORE, Aaron A. Amore, Chapter 7 Trustee, West Virginia Economic
Development Authority, and Panthera Training, LLC, respectfully request that the Court:
(1)
issue a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202 that the
Timber Agreement and the rights granted thereunder are subject to the prior liens of WVEDA;
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(2)
issue a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202 that the
purported sale of personal property of the Debtor, pursuant to the Bill of Sale, is subject to
Training's rights to the personal property under the Commercial Lease with the Debtor;
(3)
issue a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202 that the
Modular Units are fixtures and part of the Debtor's real property, and therefore, despite the Debtor's
purported sale of the Modular Units to SMI, the Modular Units are subject to the prior liens of the
EDA;
(4)
issue a declaratory judgment pursuant to 28 U.S.C. §§ 2201 and 2202 that the
purported sale of the Modular Units, pursuant to the Bill of Sale, is subject to the prior liens of
WVEDA, and subject to Training's rights under the Commercial Lease.
(5)
enter an order pursuant to 11 U.S.C. § 548 voiding the Timber Agreement and the
Bill of Sale and returning to the bankruptcy estate, pursuant to 11 U.S.C. § 550, the timber rights
and the Debtor's personal property that was conveyed;
(6)
alternatively, enter an order pursuant to 11 U.S.C. § 544(b) and W.Va. Code § 40-
1A-4 voiding the Timber Agreement and the Bill of Sale and returning to the bankruptcy estate,
pursuant to 11 U.S.C. § 550, the timber rights and the Debtor's personal property that was
conveyed;
(7)
alternatively, enter an order pursuant to 11 U.S.C. § 544(b) and W.Va. Code § 40-
1A-5 voiding the Timber Agreement and the Bill of Sale returning to the bankruptcy estate,
pursuant to 11 U.S.C. § 550, the timber rights and the Debtor's personal property that was
conveyed; and
No. 2:19-bk-00787 Doc 281 Filed 02/12/21 Entered 02/12/21 12:30:05 Page 17 of
18
- 18 -
(8)
grant such other and further relief as the Court deems appropriate.
Dated: February 12, 2021
Respectfully submitted,
/s/ Aaron C. Amore
Aaron C. Amore, WVSB No. 6455
AMORE LAW, PLLC
206 West Liberty Street
Charles Town, WV 25414
T: (304) 885-4111
F: (866) 417-8796
aaron@amorelaw.com
Counsel for Chapter 7 Trustee
Aaron C. Amore
/s/ Debra Lee Allen
Debra Lee Allen, WVSB No. 9838
Spilman Thomas & Battle, PLLC
48 Donley Street, Suite 800
Morgantown, West Virginia 26507-0615
T: (304) 291-7920 | (304) 216-5835
F: (304) 291-7979
dallen@spilmanlaw.com
Counsel for West Virginia Economic
Development Authority
/s/ Douglas E. Kahle
Douglas E. Kahle, VSB # 15964
Admitted Pro Hac Vice
308 Cedar Lakes Drive, 2nd Floor
Chesapeake, VA 23322
T: (757) 547-9191
F: (757) 547-9135
DKahle@basnightkinser.com
Counsel for Panthera Training, LLC
/s/ Julia A. Chincheck
Julia A. Chincheck (WV Bar No. 718)
Michael R. Proctor (WV Bar No. 9122)
Zachary J. Rosencrance (WV Bar No. 13040)
BOWLES RICE LLP
Post Office Box 1386
Charleston, West Virginia 25325-1386
Telephone: (304) 347-1100
Facsimile: (304) 343-3058
E-mail: jchincheck@bowlesrice.com
E-mail: mproctor@bowlesrice.com
E-mail: zrosencrance@bowlesrice.com
Counsel for Panthera Training, LLC
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