Thank You For Submiting Feedback!
United States Bankruptcy Court for the Southern District of Indiana, Indianapolis Division
August 18, 2022, Decided
Case No. 19-01487-JMC-7A, Adversary Proceeding No. 21-50007
[*175] ORDER DENYING SUN CAPITAL'S MOTION TO DISMISS
THIS ADVERSARY PROCEEDING comes before the Court on Defendant Sun Capital Partners VI, L.P.'s 12(b)(6) Motion to Dismiss filed by Sun Capital Partners VI, L.P. ("Sun Capital") on June 4, 2021 (Docket No. 54) (the "Motion"). The Motion seeks dismissal, as to Sun Capital, of the Amended Complaint to Avoid and Recover Fraudulent Transfer filed by John J. Petr, chapter 7 trustee ("Trustee"), [**3] on April 23, 2021 (Docket No. 40) (the "Complaint").
The Court, having reviewed the Complaint, the Motion, the Brief in Support of Defendant Sun Capital Partners VI, L.P.'s 12(b)(6) Motion to Dismiss attached to the Motion (Docket No. 54-1), Plaintiff's Objection to Defendant Sun Capital Partners VI, L.P.'s Motion to Dismiss filed by Trustee on July 16, 2021 (Docket No. 59), Plaintiff's Omnibus Brief in Opposition to Defendants' Motions to Dismiss filed by Trustee on July 16, 2021 (Docket No. 56) (the "Response Brief"), the Declaration of John J. Petr filed on July 16, 2021 (Docket No. 57) ("Trustee's Declaration"), and the Joint Reply Brief in Support of Defendants' BMO Harris N.A.'s and Sun Capital Partners VI, L.P.'s 12(b)(6) Motions to Dismiss filed on July 30, 2021 (Docket No. 61) (the "Reply Brief"), and being otherwise duly advised, now DENIES the Motion.
Positions of the Parties
By the Complaint, Trustee seeks to recover from Sun Capital the amount of a payment of $24,887,303 (the "Payment") made by BWGS, LLC ("Debtor") to BMO Harris Bank N.A. ("BMO"). Debtor made the Payment with respect to indebtedness owed to BMO by BWGS Intermediate Holding, LLC ("Holding"), Debtor's parent. Trustee asserts [**4] that the Payment was constructively fraudulent and that Sun Capital is liable for the value of the Payment as an alleged transfer beneficiary under §§ 544 and 550(a) of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. (the "Bankruptcy Code"),1 and Ind. Code § 32-18-2-18(b)(1)(A).
Sun Capital argues that Trustee's claims are defeated by the "safe harbor" provision of § 546(e), asserting that Debtor made the Payment to a financial institution in connection with a securities contract. Trustee argues that the safe harbor does not apply.
Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.
644 B.R. 173 *; 2022 Bankr. LEXIS 2315 **
IN RE: BWGS, LLC, Debtor.JOHN J. PETR, TRUSTEE FOR BWGS, LLC, Plaintiff, v. BMO HARRIS BANK, N.A., SUN CAPITAL PARTNERS VI, L.P., JOHN DOE CORPORATIONS 1 THROUGH 10 and OTHER JOHN DOE ENTITIES 1 THROUGH 10 all of whose names are unknown, Defendants.
Subsequent History: Motion denied by Petr v. BMO Harris Bank, N.A. (In re BWGS, LLC), 2022 Bankr. LEXIS 2313 (Bankr. S.D. Ind., Aug. 18, 2022)
safe harbor, motion to dismiss, transactions, trades, transfers, Acquisition, commodities, Settlement, stock, intermediaries, Clearance, nexus
Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Pleadings, Complaints, Requirements for Complaint, Bankruptcy Law, Estate Property, Avoidance, Transferee Liabilities & Rights, Prepetition Transfers, Voidable Transfers, Unsecured Creditors, Fraudulent Transfers, Constructively Fraudulent Transfers, Judgments, Enforcement & Execution, Fraudulent Transfers, Value, Bankruptcy, Liquidations, Clearing Banks, Commodity Brokers & Stockbrokers, Limitations on Trustee Powers, Governments, Legislation, Interpretation, Securities Law, Securities Exchange Act of 1934 Actions, Implied Private Rights of Action, Class Actions, Civil Liability Considerations, Securities Litigation Reform & Standards, Federal Preemption, Removal, Blue Sky Laws, Elements of Proof, Connection Requirement