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News HAHN & HESSEN WINS SIGNIFICANT FRAUDULENT CONVEYANCE CASE ON BEHALF OF CLIENT INSILCO CORP. Court Finds Defendant Star Services’ Transfer of Park Avenue Property Fraudulent and Orders Sale of Property New York, New York, November 15, 2002 -- The law firm Hahn & Hessen LLP announced today that it has won a contentious fraudulent conveyance action on behalf of its client Insilco Corp. The decision, rendered after a trial in the Supreme Court of the State of New York, will enable Insilco to set aside the transfer of a five story building at 591 Park Avenue. The case arose out of a $15 million note given to Insilco by defendant Star Services, Inc. of Delaware, a company organized by Peter DeGeorge. When the note was about to come due, Star conveyed the Park Avenue property to PRD Holdings Inc., another DeGeorge company. At the time of the transfer, the Park Avenue Property was subject to a mortgage, initially held by Westpac and subsequently assigned to Peter DeGeorge’s brother. PRD took the Park Avenue Property free and clear, and Star had no assets to pay Insilco. Although Insilco obtained summary judgment against Star for payment of the note in 1999, for over $21 million, the judgment remains totally unsatisfied to date. In this case, Insilco proved at trial that Star was insolvent at the time of the transfer, that the transfer was less than an arm’s length transaction, made in bad faith, and that the consideration for the transfer was grossly inadequate. Insilco also proved that the transfer was made with actual fraudulent intent. Based on these and other factors, the Court found the transfer of the Park Avenue Property was both an actual and constructive fraud. As a result, the transfer has been set aside and is subject to Insilco’s claim. “The Court reached the correct conclusion,” said John P. McCahey, a litigation partner at Hahn & Hessen LLP, and counsel to Insilco in this case. “This was clearly a case where the defendant had transferred property for the purpose of avoiding its financial obligations. We are pleased with the result.”
Founded in 1931, Hahn & Hessen LLP is a national law firm that delivers a broad base of financial and commercial legal services. Hahn & Hessen LLP represents a wide range of clients from Fortune 500 institutions, to emerging companies, to individuals. It has received substantial recognition for its unique capabilities in those situations where the creditworthiness of a client’s existing or potential borrower, counterparty or customer is of concern. The firm’s core practice areas are: insolvency and restructurings; commercial finance transactions, including working capital and acquisition lines of credit, asset based lending, leasing, structured finance transactions, repurchase transactions and derivatives deals; mergers, acquisitions, securities offerings and IPOs; tax; litigation and arbitration; the purchase, lease, financing and disposition of real estate; and trusts and estates.
For additional information, or for a copy of the decision and order, please contact Jill Blaustein at 212-595-5110.
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