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AMENDED COMPLAINT
Protea Biosciences, Inc. (“PBI”) and Protea Biosciences Group, Inc. (“PBGI”)
(collectively, “Plaintiffs”) bring this adversary proceeding against Barry C. Honig (“Honig”),
GRQ Consultants, Inc. (“GRQ”), and GRQ Consultants, Inc. 401k (“GRQ 401k”) (collectively,
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INTRODUCTION
transfers and obligations arising out the pre-petition workout of a defaulted short term (37 day) 1
$650,000 loan that was originated in September 2016. Following the default, Defendants,
2. Defendants held all of the cards because Defendants’ foreclosure would have
effectively killed Plaintiffs’ business, a business which Defendants believed had substantial
potential value.
Plaintiffs and were able to extract whatever concessions Defendants wanted. In fact, the loan
Defendants’ overreaching workout terms just months before the bankruptcy filing. The workout
was consummated pursuant to an Exchange Agreement in late April, 2019, less than a year
1
Described by Defendants in their motion to dismiss as a “one month loan”. [ECF 12,
page 9 of 20]
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$676,577.79 which is more than double the original obligation. The replacement note required
the repayment of the overdue $301,577.79 in little more than 60 days. It also required the
5,000,000 shares of stock which had a market value of at least $400,000 at the time based on
publically reported trades of PBGI’s stock. Almost immediately, Defendants exercised the option
and took the stock. Plaintiffs believe Defendants promptly sold the stock in a private transaction
8. In short, in less than 10 months, Defendants parlayed a $650,000 loan into much
more. Defendants received a total of $751,304.73 in loan payments at an effective interest rate of
more than 30% plus stock with a market value of $400,000 or more.
9. The workout created a death knell for Plaintiffs’ business which was dependent
upon the sale of stock to finance Plaintiffs’ development stage activity. Plaintiffs were unable to
sell this 5,000,000 shares again and the issuance dramatically impaired Plaintiffs’ ability to sell
10. Plaintiffs are seeking to avoid some or all of the obligation that increased the
than 60 days. Once this obligation is avoided, Plaintiffs are seeking a declaration that any
unavoidable portion of the obligation was satisfied by the issuance of stock with a market value
of at least $400,000.
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11. Plaintiffs are also seeking to avoid all cash transfers to Defendants after the
issuance of the stock and recovery of the cash payments plus the value of the stock, to the extent
Plaintiffs did not receive reasonably equivalent value for the transfers.
12. Plaintiffs are Delaware corporations which filed petitions for relief under Chapter
11 of the United States Bankruptcy Code, 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”) on
14. GRQ is a business entity believed to be owned by, controlled by and/or affiliated
with Honig.
15. GRQ 401k is believed to be a 401k plan sponsored by, owned by, controlled by
16. At all times, Honig dominated and controlled GRQ 401k and GRQ and all
transfers identified in this complaint were made for his benefit, regardless of the identity of the
17. This is an adversary proceeding pursuant to Rule 7001 of the Federal Rules of
Bankruptcy Procedure and sections 547, 548 and 550 of the Bankruptcy Code, to recover
18. This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334.
157(b)(2)(F).
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21. This District is the proper venue for this proceeding pursuant to 28 U.S.C. § 1409.
BACKGROUND
Plaintiffs’ Insolvency
22. At all times relevant to this matter, Plaintiffs were insolvent in that Plaintiffs’
debts were far greater than all of Plaintiffs’ property at a fair valuation. Plaintiffs were also not
23. By way of example, Plaintiffs’ Form 10-Q filed with the Securities and Exchange
Commission for the quarterly period ended March 31, 2017 disclosed Plaintiffs had the
24. The Form 10-Q also discloses that Plaintiffs were in default of their bank line of
credit totaling $3,000,000 and all but one short-term convertible note with the principal amount
25. On September 8, 2016, PBGI borrowed the sum of $650,000 from GRQ 401k.
26. The loan was evidenced by a $720,000 10% original issue discount convertible
note that was due and payable on October 15, 2016 (the “Original Note”).
28. The loan was secured by a security agreement (the “Security Agreement”) which
granted liens on substantial assets of Plaintiffs including accounts receivable, inventory, cash,
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deposit accounts, securities, books, records, data and intangibles. The security agreement
29. Plaintiffs’ were unable to pay the loan by the October 15, 2016 maturity date of
30. Following the maturity default, Defendants threatened suit against Plaintiffs.
31. In particular, Honig sent an email on January 27, 2017 to Plaintiffs’ chief
Barry
32. Honig sent this email within hours after receiving information indicating
significant potential for Plaintiffs’ technology when coupled with other developing technology.
Shortly after receipt of the email, Honig commented privately that he wanted 25 million shares
now.
33. Days later, on February 1, 2017, Honig demanded “as a cure for the 3 month
default and penalty” that Plaintiffs pay $250,000 that week, donate 7 million shares of PBGI
stock (which Honig misidentified as “prgb shares”) to his foundation. Honig also proposed that
the remaining debt have a .07 cent conversion right. Honig demanded that the shares be freely
tradeable immediately.
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Defendants were clearly preferred by this payment as there were other creditors whose
indebtedness was in default at this time but did not receive payment.
35. Although Plaintiffs made the substantial $200,000 payment and the parties
continued discussions to resolve Defendants’ issues, a resolution did not occur soon enough for
Gentleman
36. Then counsel for Plaintiffs responded to Honig’s email the same day discussing
the process and scheduling the finalization of the resolution with Defendants. Honig responded:
37. The next day, instead of foreclosing as threatened, Honig made an inquiry of
Plaintiffs’ then counsel concerning the “status on revised note with additional $100,000 face.”
38. On April 17, 2017, Honig sent an email to Turner, copied on then counsel for
Plaintiffs, stating “Steve I would like to have things finalized today/, if not I am really done.”
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39. Plaintiffs’ default gave Defendants even greater unequal bargaining power and
control than they originally had which enabled Defendants to extract concessions and
consideration that was overreaching, onerous and far in excess of the value provided by
40. As of March 31, 2017, Plaintiffs owed $301,577.79 in connection with the
Original Note representing $280,000.00 of principal and $21,577.79 of accrued and unpaid
interest.
41. On or about April 20, 2017, PBGI entered into an Exchange Agreement with
Defendants. Under the terms of the Exchange Agreement, GRQ 401k exchanged the Original
GRQ Note for a new PBGI “Exchange Note” in the principal amount of $676,577.79.
44. Plaintiffs did not receive reasonably equivalent value for the New Obligation. The
satisfaction of the Old Obligation did not represent reasonably equivalent value for the New
Obligation.
45. As a result, the New Obligation, either in its entirety or some portion of it, is
avoidable under applicable fraudulent transfer law including 11 U.S.C. § 548 (authorizing the
avoidance of “any obligation”) and W. Va. Code §§ 40-1A-4, 5 and 7 (authorizing the avoidance
of an obligation).
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46. The Exchange Note required PBGI to pay in full the overdue $301,577.79 amount
by not later than June 30, 2017, plus the additional amount of $375,000 by September 30, 2017
(the “Final Maturity Date”). This latter amount was convertible by the holder at a conversion
price $0.075 per share at any time prior to the Final Maturity Date for 5,000,000 shares of
47. GRQ 401k, acting through Honig, exercised its conversion right and converted
the $375,000 obligation into 5,000,000 shares of PBGI common stock effective April 21, 2017.
48. Thereafter, Defendants were issued stock certificate number 3047 representing
49. At the time, the market price of the Conversion Shares was $400,000 or more.
50. The Conversion Shares where property and assets of PBGI, or PBGI had a
property interest or asset interest in the Conversion Shares. In particular, the Conversion Shares
are “assets” subject to the West Virginia Uniform Fraudulent Transfers Act and within the
definition of “property” under W. Va. Code § 40-1A-1 because the Conversion Shares may be
51. The transfer of the Conversion Shares by PBGI, and the acceptance of the shares
52. All transfers made following the transfer of the Conversion Shares were made
without Plaintiffs receiving any value in return as the transfer of the Conversion Shares
53. The Exchange Agreement required the Conversion Shares to contain a legend
permitting the stock to be sold pursuant to Rule 144 or Rule 144A of the federal securities laws
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or based upon an opinion of counsel that registration is not required under a federal securities
law.
54. Based upon information available to Plaintiffs. On or about June 14, 2017, then
counsel to Plaintiffs issued an opinion indicating that the stock was exempt from the applicable
securities act and that the holding period required by law tacks back to the issue date of the
55. The Conversion Shares could have been sold by Plaintiffs to a third party for
substantial sums if they were not transferred to Defendants. 2 Indeed, an over the counter
(“OTC”) market existed for the shares and there were regular trades of PBGI’s shares in the OTC
market.
57. Within one year prior to the Petition Date, Plaintiffs paid Defendants the
Date Amount
11/21/2016 $240,000.00
2/9/2017 $200,000.00
2
Defendants’ motion to dismiss recognizes the ability of Plaintiffs to sell stock to third
parties stating “If the Plaintiffs’ equity had value, they could have sold such equity in the
marketplace.” [ECF 12, page 15 of 20]. Defendants’ argument misses the point though. The
market price of the stock is not determined based on equity. It is determined based on what
parties are willing to pay. As an emerging growth company, parties were trading the stock for
value even though there was no balance sheet equity and Plaintiffs were insolvent. This is
presumably based on the parties’ opinions of the technology being developed by Plaintiffs.
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6/26/2017 $311,304.73
Total $751,304.73
58. The Cash Payments provided Defendants with an effective rate of interest of
59. The Cash Payments appear to have been made from a PBI account. The Cash
Payments were supposed to be made to GRQ 401(k) but in reality they were made to whatever
account directed by Honig which could have been his personal account or an account of GRQ or
other Honig affiliate. Regardless of the ultimate recipient, the Cash Payments were made for the
60. This effective rate is far in excess of a reasonable commercial rate of interest for a
similar loan and resulted in, based on the Cash Payments alone, Defendants receiving more than
that it would constitute usurious interest under West Virginia law if Plaintiffs were individuals
and would entitle Plaintiffs to recover four times that amount of the interest. 3
62. As a result, Plaintiffs did not receive reasonably equivalent value for the Cash
Payments. 4
3
W.V. Code §§ 47-6-5, 47-6-6
4
See, Anderson v. Koch, No. A18-0685, 2019 Mn App Unpub Lexis 205 (Minn. Ct. App.
Mar. 18, 2019)(there is no reasonably equivalent value because the interest rate was
excessive and the terms of the agreement were punitive to the debtor)
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63. The total of the transfers were far in excess of the $650,000 value received by
Plaintiffs in connection with the original loan. In fact, Defendants received nearly double (or
Plaintiffs’ business gave Defendants de facto control over Plaintiffs enabling Defendants to
extract onerous forbearance terms that provided Defendants with disproportionate value.
66. In addition, following the default, the Security Agreement appointed Defendants’
officers and agents as Plaintiffs’ attorney-in-fact with full and irrevocable power and authority in
the place of Plaintiffs and in the name of Plaintiffs to take any and all appropriate action and to
execute any instrument that may be necessary or desirable to accomplish the purpose of the
Security Agreement. The purpose of the Security Agreement was to permit Defendants to realize
upon Defendants’ assets. As Defendants admitted in their motion to dismiss, “GRQ 401k could
67. Following the default, the power of attorney expressly authorized, inter alia,
Defendants to take the following action without notice to, or consent of, Plaintiffs:
5
ECF 12, page 15 of 20
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of the collateral.
68. Most importantly, following the default, the power of attorney in the Security
Agreement gave Defendants the right “to operate the Business of the [Plaintiffs].”
69. Defendants’ attorney-in-fact status and their right to operate Plaintiffs’ business
enabled Defendants to dictate corporate policy of Plaintiffs in that Defendants demanded, and
received value far in excess of what was owed to Defendants at the time.
70. Defendants demanded and received payment for the indebtedness when virtually
no other promissory note creditor was receiving payments. Defendants demanded and received
5,000,000 shares of stock just because Defendants wanted them after receiving information
indicating significant potential for Plaintiffs’ technology when coupled with other developing
technology.
71. If the transactions were consummated at arms’ length, and without Defendants’
exercise of de facto control based on the unequal bargaining power and Defendants’ rights to
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operate the business, Defendants would never have received these concessions. However,
Plaintiffs had to acquiesce in the demands because Defendants had the right to do anything they
wanted with the assets. Defendants even had the right to operate the business as provided by the
Security Agreement.
72. In short, Defendants dictated that Defendants received disproportionate value, and
Plaintiffs complied because they had no choice. Defendants had a stranglehold over Plaintiffs
and exercised complete domination, even to the point of openly belittling and insulting Plaintiffs’
chief executive without fear of negative repercussions. Instead, Plaintiffs’ officers and then
counsel became mere instruments to effectuate the transactions demanded by Defendants, not
COUNT I
CONSTRUCTIVE FRAUDULENT TRANSFER
(AVOIDANCE OF NEW OBLIGATION UNDER
APPLICABLE NON-BANKRUPTCY LAW)
74. Section 544 of the Bankruptcy Code authorizes a debtor to avoid an obligation
75. Applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
Transfers Act, permits the avoidance of an obligation of a debtor if the debtor incurred the
obligation without receiving a reasonably equivalent value in exchange for the obligation if the
debtor (i) was engaged or was about to engage in a business or a transaction for which the
remaining assets of the debtor were unreasonably small in relation to the business or transaction;
(ii) intended to incur, or believed or reasonably should have believed that the debtor would incur,
debts beyond the debtor’s ability to pay as they became due; or (iii) was insolvent at that time or
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the debtor became insolvent as a result of the obligation. See example, W. Va. Code §§ 40-1A-4
and 5.
76. Plaintiffs incurred the New Obligation while Plaintiffs were insolvent and while
Plaintiffs were engaged or was about to engage in a business or a transaction for which the
remaining assets of Plaintiffs were unreasonably small in relation to the business or transaction;
or (ii) intended to incur, or believed or reasonably should have believed that Plaintiffs would
incur, debts beyond the Plaintiff’s ability to pay as they became due.
77. Plaintiffs received less than reasonably equivalent value for the New Obligation.
law, such as the West Virginia Uniform Fraudulent Transfers Act including W. Va. Code § 40-
1A-7.
COUNT II
CONSTRUCTIVE FRAUDULENT TRANSFER
(AVOIDANCE OF NEW OBLIGATION
UNDER BANKRUPTCY CODE)
80. Section 548 of the Bankruptcy Code permits a debtor to avoid any obligation that
was incurred on or within 2 years before the date of the filing of the bankruptcy petition, if the
debtor voluntarily or involuntarily (a) received less than a reasonably equivalent value in
exchange for such transfer; and (b) (I) was insolvent on the date the obligation was incurred, or
became insolvent as a result of the obligation; (II) was engaged in business or a transaction, or
was about to engage in business or a transaction, for which any property remaining with the
debtor was an unreasonably small capital; or (III) intended to incur, or believed that the debtor
would incur, debts that would be beyond the debtor’s ability to pay as such debts matured.
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81. Plaintiffs incurred the New Obligation while Plaintiffs were insolvent and while
Plaintiffs were engaged or was about to engage in a business or a transaction for which the
remaining assets of Plaintiffs were unreasonably small in relation to the business or transaction;
or (ii) intended to incur, or believed or reasonably should have believed that Plaintiffs would
incur, debts beyond the Plaintiff’s ability to pay as they became due.
82. Plaintiffs received less than reasonably equivalent value for the New Obligation.
83. As a result, the New Obligation is avoidable under section 548 of the Bankruptcy
Code.
COUNT III
ACTUAL FRAUDULENT TRANSFER
(AVOIDANCE OF NEW OBLIGATION UNDER
APPLICABLE NON-BANKRUPTCY LAW)
85. Section 544 of the Bankruptcy Code authorizes a debtor to avoid an obligation
86. Applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
Transfers Act, permits the avoidance of an obligation of a debtor if the debtor incurred the
obligation with actual intent to hinder, delay or defraud any creditor of the debtor. See example,
consideration may be given to a number of factors known as the “badges of fraud.” The badges
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(c) before the obligation was incurred, the debtor had been
88. The New Obligation bears all of the hallmarks of the badges of fraud with respect
to an incurrence of an obligation:
approval;
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incurred; and
incurred.
law, such as the West Virginia Uniform Fraudulent Transfers Act including W. Va. Code § 40-
1A-7.
COUNT IV
ACTUAL FRAUDULENT TRANSFER
(AVOIDANCE OF NEW OBLIGATION
UNDER BANKRUPTCY CODE)
91. Section 548 of the Bankruptcy Code permits a debtor to avoid any obligation that
was incurred on or within 2 years before the date of the filing of the bankruptcy petition, if the
debtor voluntarily or involuntarily incurred the obligation with actual intent to hinder, delay, or
defraud any entity to which the debtor was or became, on or after the date the obligation was
incurred or indebted.
93. The New Obligation bears all of the hallmarks of the “badges of fraud” with
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approval;
incurred; and
incurred.
94. As a result, the New Obligation is avoidable under section 548 of the Bankruptcy
Code.
COUNT V
DECLARATORY JUDGMENT DETERMINING
UNAVOIDABLE OBLIGATIONS WERE SATISFIED BY
TRANSFER OF THE CONVERSION SHARES
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96. Following avoidance of the New Obligation pursuant to the prior counts in this
Complaint, there will likely be a dispute between the parties as to whether, and to what extent,
any obligations remained owing to Defendants by Plaintiffs and whether any remaining
obligations where satisfied by the transfer of the Conversions Shares by Plaintiffs and the
97. As a result, Plaintiffs respectfully requests the Court to determine: (a) there were
no remaining obligations owed by Plaintiffs to Defendants following the execution and delivery
of the Exchange Agreement, the Exchange Note and/or the Conversion Shares; and (b) the
transfer and acceptance of the Conversion Shares satisfied any remaining obligations owed by
Plaintiffs to Defendants.
COUNT VI
CONSTRUCTIVE FRAUDULENT TRANSFER
(AVOIDANCE OF CASH PAYMENTS AND
TRANSFER OF CONVERSION SHARES
UNDER APPLICABLE NON-BANKRUPTCY LAW)
99. Section 544 of the Bankruptcy Code authorizes a debtor to avoid a transfer that is
100. Applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
Transfers Act, permits the avoidance of a transfer of an asset of a debtor if the debtor made the
transfer without receiving reasonably equivalent value in exchange for the transfer if the debtor
(i) was engaged or was about to engage in a business or a transaction for which the remaining
assets of the debtor were unreasonably small in relation to the business or transaction; (ii)
intended to incur, or believed or reasonably should have believed that the debtor would incur,
debts beyond the debtor’s ability to pay as they became due; or (iii) was insolvent at that time or
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the debtor became insolvent as a result of the transfer. See example, W. Va. Code §§ 40-1A-4
and 5.
101. An “asset” is defined under applicable law, including the West Virginia Uniform
Fraudulent Transfers Act, to include property of the debtor. “Property” is defined as “anything
102. The Cash Payments and Conversion Shares were an asset and property of
Plaintiffs because the Cash Payments and Conversion shares may be subject to ownership.
103. The transfer of the Conversion Shares satisfied some or all of the New Obligation.
104. Plaintiffs made the Cash Payments and issued the Conversion Shares while
Plaintiffs were engaged or was about to engage in a business or a transaction for which the
remaining assets of Plaintiffs were unreasonably small in relation to the business or transaction;
or (ii) intended to incur, or believed or reasonably should have believed that Plaintiffs would
incur, debts beyond the Plaintiff’s ability to pay as they became due.
105. Plaintiffs received less than reasonably equivalent value for the Cash Payments
106. As a result, the Cash Payments and transfer of the Conversion Shares are
avoidable under applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
107. Applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
Transfers Act, permits Plaintiffs to obtain a money judgment against Defendants for the amount
108. As a result, Plaintiffs demand a money judgment against Defendants for, inter
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Total $1,151,304.73
COUNT VII
CONSTRUCTIVE FRAUDULENT TRANSFER
(AVOIDANCE OF CASH PAYMENTS AND
TRANSFER OF CONVERSION SHARES
UNDER BANKRUPTCY CODE)
110. Section 548 of the Bankruptcy Code permits a debtor to avoid any transfer of an
interest of the debtor in property that was made within 2 years before the date of the filing of the
bankruptcy petition, if the debtor voluntarily or involuntarily (a) received less than a reasonably
equivalent value in exchange for such transfer; and (b) (I) was insolvent on the date the transfer
was made, or became insolvent as a result of the transfer; (II) was engaged in business or a
transaction, or was about to engage in business or a transaction, for which any property
remaining with the debtor was an unreasonably small capital; or (III) intended to incur, or
believed that the debtor would incur, debts that would be beyond the debtor’s ability to pay as
111. The Cash Payments and Conversion shares were property of Plaintiffs or
Plaintiffs had a property interest in the Cash Payments and Conversion Shares.
112. The transfer of the Conversion Shares satisfied some or all of the New Obligation.
6
Minimum estimate based on market price.
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113. Plaintiffs made the Cash Payments and issued the Conversion Shares while
Plaintiffs were insolvent and while Plaintiffs were engaged or was about to engage in a business
or a transaction for which the remaining assets of Plaintiffs were unreasonably small in relation
to the business or transaction; or (ii) intended to incur, or believed or reasonably should have
believed that Plaintiffs would incur, debts beyond the Plaintiff’s ability to pay as they became
due.
114. Plaintiffs received less than reasonably equivalent value for the Cash Payments
115. The Cash Payments and transfer of the Conversion Shares are avoidable under
section 548 of the Bankruptcy Code and Plaintiffs may recover the value of the Cash Payments
and Conversion Shares from Defendants pursuant to section 550 of the Bankruptcy Code.
116. As a result, Plaintiffs demand a money judgment against Defendants for, inter
Total $1,151,304.73
COUNT VIII
ACTUAL FRAUDULENT TRANSFER
(AVOIDANCE OF CASH PAYMENTS AND TRANSFER OF
CONVERSION SHARES UNDER
APPLICABLE NON-BANKRUPTCY LAW)
7
Minimum estimate based on market price.
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118. Section 544 of the Bankruptcy Code authorizes a debtor to avoid an obligation
119. Applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
Transfers Act, permits the avoidance of a transfer of asset, or an interest in an asset, of a debtor if
the debtor incurred the obligation with actual intent to hinder, delay or defraud any creditor of
120. An “asset” is defined under applicable law, including the West Virginia Uniform
Fraudulent Transfers Act, to include property of the debtor. “Property” is defined as “anything
121. The Cash Payments and Conversion Shares were an asset and property of
Plaintiffs because the Cash Payments and Conversion shares may be subject to ownership.
122. The transfer of the Conversion Shares satisfied some or all of the New Obligation.
123. In determining actual intent with respect to the transfer of an asset, consideration
may be given to a number of factors known as the “badges of fraud.” The badges of fraud
(c) before the transfer was made, the debtor had been sued or
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124. The transfers of the Cash Payments and transfer of Conversion Shares bear these
badges of fraud:
board approval;
125. As a result, the Cash Payments and transfer of the Conversion Shares are
avoidable under applicable non-bankruptcy law, such as the West Virginia Uniform Fraudulent
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126. As a result, Plaintiffs demand a money judgment against Defendants for, inter
Total $1,151,304.73
COUNT IX
ACTUAL FRAUDULENT TRANSFER
(AVOIDANCE OF CASH PAYMENTS AND TRANSFER OF
CONVERSION SHARES UNDER BANKRUPTCY CODE)
128. Section 548 of the Bankruptcy Code permits a debtor to avoid any transfer of a
debtor’s property, or an interest in property, made on or within 2 years before the date of the
filing of the bankruptcy petition, if the debtor voluntarily or involuntarily incurred the obligation
with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on
8
Minimum estimate based on market price.
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board approval;
130. The Cash Payments and transfer of the Conversion Shares are avoidable under
section 548 of the Bankruptcy Code and Plaintiffs may recover the value of the Cash Payments
and Conversion Shares from Defendants pursuant to section 550 of the Bankruptcy Code.
131. As a result, Plaintiffs demand a money judgment against Defendants for, inter
Total $1,151,304.73
COUNT X
PREFERENTIAL TRANSFER
9
Minimum estimate based on market price.
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133. The transfers, or some portion of the transfers, described in this complaint were
134. The transfers, or some portion of the transfers, were made to or for the benefit of
Defendants on account of an antecedent debt owed by Plaintiffs before the transfers were made.
136. The transfers where made within the applicable time period set forth in 11 U.S.C.
§ 547(b)(4).
137. The transfers enabled Defendants to receive more and they would receive if the
case were under chapter 7 of the Bankruptcy, the transfers had not been made and Defendants
received payment of such debt to the extent provided in the provisions of the Bankruptcy Code.
138. As a result, the transfers are avoidable pursuant to 11 U.S.C. §§ 547(b) and 550.
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WHEREFORE, Plaintiffs respectfully request that the Court enter judgment in its favor
and against Defendants for avoidance of the obligation. Plaintiffs also respectfully request a
declaratory judgment concerning the satisfaction of the indebtedness and a money judgment in
the amounts requested in this complaint plus all relief available under applicable law including
sections 544, 547, 548 and 550 of the Bankruptcy Code and other applicable non-bankruptcy
law.
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