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Badges of fraud justified CPL relief and trust preservation orders.
Investors in a real estate Ponzi scheme brought a motion for certificates of pending litigation against three properties allegedly transferred to family and friends after the collapse of the scheme.
Applying the test for fraudulent conveyance CPL relief, the court found a high probability of success on the underlying breach of contract claim and strong evidence of badges of fraud supporting an intent to defeat or delay creditors.
The court rejected assertions that the transferees had paid fair market value or were unaware of the fraud, except that the balance of convenience did not justify encumbering one residence occupied by a family with a young child.
CPL relief was granted for one property, substitute trust preservation relief was ordered for sale proceeds from another, and relief was denied for the third property.
Former lawyer granted charging order on matrimonial property for unpaid fees; quantification deferred to civil action.
The applicant's former lawyer brought a motion in family court for a charging order against a property for unpaid legal fees of approximately $664,323.
The property had been transferred to the respondent husband pursuant to family law minutes of settlement.
The court held that while the motion should ideally have been brought in the related civil action commenced by the lawyer, the family court had jurisdiction and would decide the motion to save resources.
The court granted the charging order, finding the lawyer was instrumental in preserving equity in the property and that there was a triable issue regarding whether the transfer was a fraudulent conveyance, with quantification to be determined in the civil action.
