Insilco Corporation v. Star Services, Inc. of Delaware

Citation769 N.Y.S.2d 272,2 A.D.3d 343,2003 NY Slip Op 19867
Decision Date30 December 2003
Docket Number2613.
PartiesINSILCO CORPORATION, Respondent, v. STAR SERVICES, INC. OF DELAWARE et al., Appellants.
CourtNew York Supreme Court Appellate Division

The challenged transfer of the subject townhouse, from defendant Star Services to defendant PRD Holdings, was properly set aside for both constructive and actual fraud (Debtor and Creditor Law §§ 273, 276). Circumstances demonstrating the lack of good faith element of constructive fraud include Star's admitted insolvency at the time of the transfer; the sole ownership of both defendants by the same individual; the effective eradication of the mortgage on the townhouse by that individual's brother in exchange for an unsecured guarantee in a far lesser amount; and the imminence of the due date of plaintiff's note at the time of PRD's organization, which had no apparent purpose other than to hold title to the townhouse (see Southern Indus. v Jeremias, 66 AD2d 178, 183-184 [1978]; 48-48 Assoc. v Piccoli, 243 AD2d 291 [1997]). Nor does any basis exist to disturb the trial court's valuation of the townhouse (see Matter of County of Broome [Miller Facilities Corp.], 133 AD2d 984, 986 [1987]; see also Levin v State of New York, 13 NY2d 87, 92 [1963]), and its finding based thereon that the consideration paid by PRD was not a fair equivalent. In the latter regard, permissible commercial use is the common denominator between the townhouse and four of plaintiff's six comparables. Badges of fraud demonstrating actual fraud include the above circumstances relevant to constructive fraud; Star's longstanding default on the debt that was originally senior to plaintiff's note (see 267 AD2d 143 [1999]) and defendants' sole shareholder's continued control of the townhouse after the transfer (see Wall St. Assoc. v Brodsky, 257 AD2d 526, 529 [1999]; Nonas v Romantini, 271 AD2d 292 [2000]). The judgment does not give plaintiff an excessive remedy and is not in derogation of the rights of the sole shareholder's brother, who assisted defendants in...

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2 cases
  • Bernasconi v. Aeon, LLC
    • United States
    • New York Supreme Court — Appellate Division
    • April 11, 2013
    ...the finding of actual fraud ( see Pritchard v. Curtis, 95 A.D.3d 1379, 1380, 944 N.Y.S.2d 341 [2012];Insilco Corp. v. Star Servs., Inc. of Del., 2 A.D.3d 343, 344, 769 N.Y.S.2d 272 [2003] ). An ample basis also exists for the conclusion that the transfer was the product of constructive frau......
  • People v. Marquez, 2612.
    • United States
    • New York Supreme Court — Appellate Division
    • December 30, 2003

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