Lack of Particularity Dooms Fraudulent Conveyance Claim

On October 8, 2019, Justice Borrok of the New York County Commercial Division issued a decision in Getintent USA, Inc. v. Sileo, LLC, 2019 NY Slip Op. 33014(U), dismissing a fraudulent conveyance claim for failure to plead the facts relating to the claim with particularity, explaining:

Finally, to state a cause of action for fraudulent conveyance, a plaintiff must plead the following three elements: (1) that a conveyance was made without fair consideration, (2) that at the time of transfer, the transferor was a defendant in an action for money damages or that a judgment in such action had been docketed against him, and (3) that a final judgment has been rendered against the transferor that remains unsatisfied. Here, as with the fraud claim, the complaint is not pled with any particularity whatsoever. All Getlntent alleges is that the defendants were aware of Getlntent and other creditors' claims and their inability to pay said claims, and that Defendants acted with fraudulent intent by making conveyances - while they were defendants in pending lawsuits for money damages - without fair consideration. This is palpably insufficient under the heightened standard applicable to fraud claims. There are no specific allegations of what was transferred, when it was transferred or even how and to whom (e.g., the Complaint alternatively treats Column6 and Sileo as a single entity and as different entities. Accordingly, the fourth cause of action is dismissed without prejudice.

(Internal citations omitted).

We have substantial experience in helping judgment creditors collect on judgments and search for and attach assets worldwide. A big part of that effort is using the legal tools--such as claims for fraudulent conveyance discussed in this opinion--for recovering property that has been transferred to a third party to avoid its being seized to satisfy a judgment. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client need help collecting on a judgment.