Judge Harold Baer
Marvin Jemal owned ENE Group and was president of ENE and the Underground Group (TUG). Son-in-law Grossman was an ENE officer and TUG’s executive vice president. Asserting fraudulent inducement Topever alleged ENE owed it $838,457 under its contract for goods delivered to retailers from November 2008, to August 2009. It claimed Marvin and Grossman "raided" ENE’s assets by opening TUG and transferring assets to family members while placing orders and making contracts in ENE’s name. Marvin and Grossman allegedly opened TUG in January 2010 after closing ENE. TUG’s shares were allegedly restructured before Marvin, his wife, and daughter sought bankruptcy relief. Deeming Grossman and Marvin’s wife properly joined, district court only partly dismissed ENE’s and TUG’s remaining claims in Topever’s lawsuit asserting fraudulent conveyance, contract breach and related claims. Noting that three of five "badges of fraud" had been alleged, it found the facts in Topever’s fraudulent conveyance claims against ENE and TUG sufficiently pleaded to survive dismissal. Further given that the fraudulent conveyance claim was adequately pleaded, Topever’s contract breach claim against TUG based on successor liability was viable.
