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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 1 of 66



UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

FORT LAUDERDALE DIVISION

www.flsb.uscourts.gov

Case No. 09-34791-BKC-RBR
Chapter 11




Adv. Pro. No. _________-BKC-RBR-A
























Debtor.



In re:

ROTHSTEIN ROSENFELDT ADLER, P.A.,1


______________________________________/

HERBERT STETTIN, Chapter 11 TRUSTEE,


v.

CASA CASUARINA, LLC, LOFTIN FAMILY, LLC,
LOFTIN HOSPITALITY, LLC,
LUXURY RESORTS, LLC2, and JOHN DOES 1-50.


____________________________________________/

Plaintiff,


Defendant.










COMPLAINT TO AVOID AND RECOVER

FRAUDULENT TRANSFERS AND FOR DAMAGES





Plaintiff Herbert Stettin, Chapter 11 Trustee (“Trustee” or “Plaintiff”) of Rothstein

Rosenfeldt Adler, P.A. (“RRA”), sues Defendants Casa Casuarina, LLC (“Casa”), Loftin Family,

LLC (“Loftin Family”), Loftin Hospitality, LLC, (“Loftin Hospitality”), and Luxury Resorts,

LLC (“Luxury”) to avoid and recover damages for fraudulent transfers and other state common

law claims, and states:




1 The address and last four digits of the taxpayer identification number of the debtor is 401 E. Las Olas Blvd. Suite
2270, Fort Lauderdale, FL 33301 (TIN 7961).

2 In compliance with Fed. R. Bankr. P. 7020 and Local Rule 7003-1(D) regarding the joinder of multiple parties in a
single action, the claims asserted against the named defendants arise out of the same series of transactions and
involve common issues of law and fact.


Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 2 of 66

THE PARTIES, JURISDICTION AND VENUE

1.

Plaintiff Herbert Stettin was appointed receiver of Rothstein Rosenfeldt Adler,

P.A. (“RRA”) on November 2, 2009, in an action commenced in the Circuit Court of Broward

County, Florida styled Stuart Rosenfeldt and Rothstein Rosenfeldt Adler, P.A. v. Scott W.

Rothstein, Case No. 09-059301(07) (the “Receivership Action”). On November 10, 2009 (the

“Petition Date”), an involuntary bankruptcy case was filed against RRA, the debtor in the

above-captioned case (DE #1). On November 20, 2009, the Office of the United States Trustee

filed a Notice Appointing Plaintiff Herbert Stettin as the Chapter 11 Trustee of RRA (DE #35).

On November 25, 2009, this Court entered an order ratifying the appointment of Plaintiff

Stettin as Trustee (DE #55). The Trustee is the proper party plaintiff with standing to bring this

action.

2.

On November 25, 2009, RRA, through the Trustee, consented to the relief sought

by the involuntary petition (DE #57). On November 30, 2009, this Court entered an Order for

Relief (DE #66).

3.

Defendant Casa is a Florida Limited Liability Company with its principal place of

business in Miami-Dade County, Florida. Casa received the transfers set forth herein from

RRA within four years of the filing of the Petition Date.

4.

Defendant Loftin Family is a North Carolina Limited Liability Company with its

principal place of business in Raleigh, North Carolina. Loftin Family received the transfers set

forth herein from RRA within four years of the filing of the Petition Date.

5.

Defendant Loftin Hospitality is a Florida Limited Liability Company with its

principal place of business in Miami-Dade County, Florida. Loftin Hospitality received the

transfers set forth herein from RRA within four years of the filing of the Petition Date.



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6.

Defendant Luxury is a North Carolina Limited Liability Company with its

principal place of business in Raleigh, North Carolina. Luxury received the transfers set forth

herein from RRA within four years of the filing of the Petition Date.

7.

This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. §§ 157(a), (b) and 1334(b).

8.

The claims for avoidance of fraudulent transfers and the count to recover the

avoided transfers are core proceedings for which this Court is authorized to hear and determine

all matters regarding this case in accordance with 28 U.S.C. § 157(b)(2)(H)3. The claims for

common law causes of action are noncore proceedings as to which the Trustee consents to the

entry of final orders and judgments by the Bankruptcy Court.

9.

Venue is proper in this Court pursuant to 28 U.S.C. § 1409(a).

INTRODUCTORY BACKGROUND FACTS

10. RRA was a Florida professional services corporation, formed on February 7, 2002

by Scott W. Rothstein (“Rothstein”) and Stuart Rosenfeldt (“Rosenfeldt”). Although Rothstein

dominated the management of RRA, the law firm also maintained an Executive Committee and

had two levels of recognized senior attorney leadership which indicated an ownership interest


3 By filing this Complaint in the office of the Clerk of the Bankruptcy Court, Plaintiff is necessarily filing it within
the District Court as the Bankruptcy Court is, at the very least for administrative purposes, a unit of the District
Court. 28 U.S.C. § 151. Moreover, the District Court’s Order of Assignment of Cases Arising Under Title 11,
United States Code, No. 84-12-CIV-MISC mandates that actions arising in or under or related to cases under title 11
of the United States Code be immediately referred to the Bankruptcy Court, and by longstanding practice such
adversary proceedings are therefore filed at the office of the Clerk of the Bankruptcy Court and not the office of the
Clerk of the District Court. At least one federal court opinion outside this circuit purporting to apply the teaching of
the recently decided case by the United States Supreme Court, Stern v. Marshall, 131 S.Ct. 2594 (2011), suggested
that adversary proceedings like this one are outside the Bankruptcy Court’s jurisdiction to hear or determine,
necessitating dismissal of the complaint without consideration of the more reasonable option of simply withdrawing
the reference so that an Article III district judge will be the judicial officer to enter judgment. While Plaintiff
vigorously disagrees with such opinion(s), in an abundance of caution, Plaintiff requests that, in the event that it is
later determined by this or any other court of competent jurisdiction that the Bankruptcy Court may not enter final
judgment in this adversary proceeding, the District Court’s reference of this adversary proceeding be withdrawn or
be deemed withdrawn, as necessary, so that the merits of the complaint may be heard by a constitutionally
authorized judicial officer and not dismissed.



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in the firm, that is “Shareholders” and “Partners.”

11. Although the firm’s practice was initially focused on labor and employment law,

it expanded to other practice areas, including commercial litigation, intellectual property,

corporate law, mergers and acquisitions, real estate, criminal defense, class actions, mass torts

and personal injury claims. RRA rapidly grew from a seven-attorney law firm in 2002 to 70

attorneys and 80 support staff in 2009. It maintained its principal office in downtown Fort

Lauderdale, Florida, with satellite offices in Miami, Boca Raton and New York.

12. Prior to 2005, Rothstein was a virtual unknown in legal, political, and charitable

circles. Subsequent to 2005, Rothstein and RRA became highly visible in South Florida

making direct and indirect significant political, civic and charitable contributions to both gain

influence and create the appearance of financial success.

13.

In November 2009, Rosenfeldt, on behalf of RRA and himself, initiated the

Receivership Action for judicial dissolution of the firm, an accounting, and appointment of a

receiver, pursuant to Florida Statutes §§ 607.1430(3), 607.1431 and 607.1432. His complaint

alleged that Rothstein had engaged in multiple wrongful acts constituting a Ponzi scheme,

pleading that Rothstein orchestrated a substantial misappropriation of funds from investor trust

accounts in RRA’s name. Rosenfeldt’s complaint also alleged that the investment business

created and operated by Rothstein centered on the fraudulent sale of interests in structured

settlements and that “various funds unrelated to the practice of law cannot be accounted for.”

14. As part of his Ponzi scheme to defraud investors, Rothstein utilized the RRA

offices, RRA lawyers and staff, and his position as an attorney, owner and officer of RRA, in

addition to many law firm and personal relationships and with RRA’s financial institutions, to

effectuate the fraudulent sale of fictitious structured settlements.



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15. On November 9, 2009, the United States of America filed a Verified Complaint

for Forfeiture In Rem against several real properties that were connected to Rothstein or RRA,

Case No. 09-cv-61780-WJZ. The Forfeiture Complaint pled that the “criminal investigation

has disclosed that the investments purportedly underlying the… investment scheme never

existed. The investigation has established that no such settlement agreements ever existed and

the entire investment scheme was a fraud.”

16. On November 25, 2009, by consent, Rothstein was permanently disbarred as a

member of The Florida Bar by the Florida Supreme Court. On January 25, 2010, as set forth in

a Plea Agreement filed in the criminal proceeding styled United States of America v. Scott W.

Rothstein, United States District Court for the Southern District of Florida, Case Number 0:09-

cr-60331-JIC [D.E. 69] (the “Criminal Proceeding”), Rothstein admitted to conspiring with

others to conduct a pattern of racketeering activity which included violations of federal mail

fraud, wire fraud, money laundering and conspiracy statutes. On June 9, 2010, Rothstein was

sentenced to a prison term of 50 years.

THE PONZI SCHEME MECHANICS

17. Beginning in or about 2005 and continuing through the end of October 2009,

Rothstein represented to prospective investors and lenders that: (a) certain of RRA’s clients had

settled

financially significant sexual harassment, whistleblower and/or employment

discrimination claims against third party/putative defendants prior to the commencement of

litigation; (b) the third party/putative defendants had paid the full amount of the settlement

proceeds into RRA’s trust accounts; (c) the settlement proceeds would be disbursed to RRA’s

aggrieved clients over a period of time, subject to strict confidentiality provisions prohibiting

the disclosure of the identities of the parties; and (d) certain of these aggrieved clients needed



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cash and wished to sell their settlements at sums less than the purported recoveries obtained for

them by RRA.

18. Rothstein further represented to prospective investors and lenders that they could

“purchase” the settlement proceeds from RRA’s clients at a substantial discount and thereby

profit on the spread between the lump sum payment and the total of the settlement proceeds to

be disbursed over time.

19.

In fact, the entire settlement scheme was a lie. Rothstein falsified the existence of

the aggrieved clients and the third party/putative defendants, the existence of the settlements,

the resulting settlement proceeds, and every document relating to these purported settlements

(the “Fictitious Settlements”).

20.

In order to induce investments, some of which were in the form of loans,

Rothstein emphasized to prospective investors and lenders that the settlement proceeds were

held in RRA’s trust accounts.

21.

In fact, Rothstein utilized investor and lender funds, RRA client funds and RRA’s

own earnings to pay the earlier Fictitious Settlements to investors and lenders, and to fund his

own lavish personal expenditures, including acquiring interests in real properties and various

businesses, commonly known as the “Rothstein Entities.”

22. A typical Fictitious Settlement transaction involved the following documents: (a)

a redacted contingency fee agreement between RRA and its purported aggrieved client, (b) a

redacted settlement agreement executed between the purported client and the defendant, (c) a

sale and transfer agreement, (d) an acknowledgement of assignment/purchase of settlement

proceeds agreement, (e) a guaranty executed by Rothstein personally and on behalf of RRA, (f)

a defense agreement, (g) a redacted wire transfer confirmation purporting to evidence payment



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of all settlement proceeds into RRA’s bank account at TD Bank, and (h) correspondence

detailing the transaction on RRA’s letterhead, (collectively, the “Fictitious Settlement

Documents”). Many of the Ponzi scheme transactions also included a guaranty by Rothstein

and a promissory note issued by RRA in favor of the investor or lender, promising to pay the

settlement amount.

23. The Fictitious Settlement Documents redacted the names of the alleged litigants

and other pertinent information an investor or lender could have used to verify the legitimacy of

the settlements. Rothstein uniformly explained the redactions were necessary to maintain the

absolute confidentiality needs of the settling parties.

24.

In the course of Rothstein’s Ponzi scheme, he regularly transferred, commingled

and used money from one bank account into another, in order to cover up his thefts. In the

process, he stole (i) investor, lender and law firm client funds, frequently out of accounts that

were titled as “trust accounts,” (ii) RRA’s fee income from its operating account, and (iii) funds

from other bank accounts which he controlled related to the Rothstein Entities.

25. This bank account manipulation enabled Rothstein to cover the continuously

increasing personal and RRA expenditures by creating the appearance that sufficient funds were

on hand to pay expenses, including settlement monies due Ponzi scheme investors and lenders.

26. All conditions precedent to the institution of this action have been performed,

have occurred, have been waived or have been excused.

ALLEGATIONS SPECIFIC TO DEFENDANTS



27.

Prior to the Petition date, between November 7, 2006 and October 21, 2009, the

Debtor made transfers totaling approximately $4.8 million to the Defendants (collectively

referred to as the “Transfers”). A schedule of the Transfers made between November 7, 2006



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and October 21, 2009 totaling $480,638.31 to Defendant Casa (the “Casa Transfers”) is listed on

Exhibit “A” attached hereto. A schedule of the Transfers made between September 4, 2009 and

October 9, 2009 totaling $2,275,000 to Defendant Loftin Family (the “Loftin Family Transfers”)

is listed on Exhibit “B” attached hereto. A schedule of the Transfer made on or about August 10,

2009 in the amount of $41,341.81 to Defendant Loftin Hospitality (the “Loftin Hospitality

Transfer”) is listed on Exhibit “C” attached hereto. A schedule of the Transfers made between

July 24, 2009 and August 10, 2009 totaling $2,125,000 to Defendant Luxury (the “Luxury

Transfers”) is listed on Exhibit “D” attached hereto. Verification of the Transfers by wire or

check from RRA and deposit of the wire or check into the Defendants’ accounts are attached as

composite Exhibit “E” hereto.



28.

The Transfers did not relate to the operation of RRA, confer a benefit upon, or

provide value to, RRA.

29.

The Trustee has made demand upon the Defendants for repayment of the

Transfers. The Defendants have failed and refused to make such repayment.

COUNT I – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(A) OF THE BANKRUPTCY CODE

[AGAINST CASA]





30.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

31.

The Transfers reflected on Exhibit A were made to Casa within four years of the

Petition Date. Those Transfers that were made between November 10, 2007 and October 30,

2009 (the “Casa Two Year Transfers”) were made by RRA within two years prior to the date that

the Involuntary Petition was filed on November 10, 2009.



32.

The Casa Two Year Transfers were made by RRA to Casa with the actual intent

to hinder, delay or defraud an entity to which RRA was or became, on or after the date such



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transfers were made, indebted.

WHEREFORE, the Trustee respectfully requests the Court to enter a Judgment:

(a) Declaring the Two Year Transfers to have been fraudulent transfers pursuant

to § 548(a)(1)(A) of the Bankruptcy Code;

(b) Avoiding the Two Year Transfers made to Casa as fraudulent transfers in

violation of § 548(a)(1)(A) of the Bankruptcy Code;

(c) Disallowing any claim that Casa may have against the Debtor until such time

as Casa repays the Two Year Transfers to the bankruptcy estate pursuant to 11

U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.

COUNT II – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(B) OF THE BANKRUPTCY CODE

[AGAINST CASA]





33.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

34.

The Casa Two Year Transfers reflected on Exhibit A were made by RRA within

two years prior to the Petition Date.



35. RRA received less than reasonably equivalent value in exchange for the Casa

Two Year Transfers, and

(a)

RRA was insolvent on the dates that the transfers were made or was rendered

insolvent because of those transfers;

(b)

RRA was engaged in business or a transaction, or was about to engage in business

or a transaction, for which any property remaining with RRA was an unreasonably small capital;

or



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(c)

RRA intended to incur, or believed it would incur, debts that would be beyond its

ability to pay as such debts matured.

WHEREFORE, the Trustee respectfully requests the Court enter judgment:

(a)

Declaring the above referenced payments to Casa to have been fraudulent

transfers pursuant to § 548(a)(1)(B) of the Bankruptcy Code;

(b)

Avoiding the Two Year Transfers made to Casa as fraudulent transfers in

violation of § 548(a)(1)(B) of the Bankruptcy Code;

(c) Disallowing any claim that Casa may have against the Debtor until such

time as Casa repays the Two Year Transfers to the bankruptcy estate pursuant to 11 U.S.C. §

502(d); and

(d)

Granting such other and further relief as may be just and proper.

COUNT III – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 544 OF BANKRUPTCY CODE AND SECTION 726.105(1)(A)

OF FLORIDA STATUTES

[AGAINST CASA]



36.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

37. Within the four year period preceding the Petition Date, RRA made the Transfers

reflected on Exhibit A to Casa (“the “Casa Four Year Transfers”).

38.

The Casa Four Year Transfers were made by RRA with the actual intent to

hinder, delay or defraud creditors of RRA. At the time of each transfer reflected on Exhibit A

there existed at least one actual creditor of RRA that was thereby harmed by the transfer.

WHEREFORE, the Trustee respectfully requests the Court to enter a judgment:

(a) Declaring the above referenced payments to Casa to have been fraudulent transfers

pursuant to Fla. Stat. § 726.105(1)(a);

(b) Avoiding the Transfers made to Casa as fraudulent transfers in violation of Fla. Stat.



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§ 726.105(1)(a);

(c) Disallowing any claim that Casa may have against the Debtor until such time as Casa

repays the Four Year Transfers to the bankruptcy estate pursuant to 11 U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.

COUNT IV – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 544 OF BANKRUPTCY CODE AND SECTION 726.105(1)(B)

OF FLORIDA STATUTES

[AGAINST CASA]





39.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

40. Within the four year period preceding the Petition Date, RRA made the Casa Four

Year Transfers reflected on Exhibit A to Casa.

41. RRA made the Casa Four Year Transfers without receiving reasonably equivalent

value in exchange for the Casa Four Year Transfers, and

(a) RRA was engaged or was about to engage in a business or a transaction for which the

remaining assets of RRA were unreasonably small in relation to its business or transaction; or

(b) RRA intended to incur, or believed it would incur, debts that would be beyond

RRA’s ability to pay as they became due.

WHEREFORE, the Trustee respectfully requests the Court to enter a judgment:

(a) Declaring the above referenced payments to Casa to have been fraudulent transfers

pursuant to Fla. Stat. § 726.105(1)(b);

(b) Avoiding the Four Year Transfers made to Casa as fraudulent transfers in violation of

Fla. Stat. § 726.105(1)(b);

(c) Disallowing any claim that Casa may have against the Debtor until such time as Casa

repays the Four Year Transfers to the bankruptcy estate pursuant to 11 U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.



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COUNT V – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 544 OF BANKRUPTCY CODE AND SECTION 726.106(1)

OF FLORIDA STATUTES

[AGAINST CASA]



42.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

43. Within the four years period preceding the Petition Date, RRA made the Casa

Four Year Transfers on Exhibit A to Casa.

44. RRA made the Casa Four Year Transfers without receiving reasonably equivalent

value in exchange for the Casa Four Year Transfers.

45. RRA was insolvent at that times of the Casa Four Year Transfers or became

insolvent as a result of thereof. At the time of each transfer reflected on Exhibit A there existed

at least one actual creditor of RRA that was thereby harmed by the transfer.

WHEREFORE, the Trustee respectfully requests this Court to enter a judgment:

(a) Declaring the above referenced payments to the Casa to have been fraudulent

transfers pursuant to Fla. Stat. § 726.106(1);

(b) Avoiding the Transfers made to Casa as fraudulent transfers in violation of Fla. Stat.

§ 726.106(1);

(c) Disallowing any claim that Casa may have against the Debtor until such time as Casa

repays the Four Year Transfers to the bankruptcy estate pursuant to 11 U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.

COUNT VI – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(A) OF THE BANKRUPTCY CODE

[AGAINST LOFTIN FAMILY]







46.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

47.

The Transfers reflected on Exhibit B were made to Loftin Family within four

years of the Petition Date. Those Transfers that were made between November 10, 2007 and



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October 30, 2009 (the “Loftin Family Two Year Transfers”) were made by RRA within two

years prior to the date that the Involuntary Petition was filed on November 10, 2009.



48.

The Loftin Family Two Year Transfers were made by RRA to Loftin Family with

the actual intent to hinder, delay or defraud an entity to which RRA was or became, on or after

the date such transfers were made, indebted.

WHEREFORE, the Trustee respectfully requests the Court to enter a Judgment:

(a) Declaring the Loftin Family Two Year Transfers to have been fraudulent

transfers pursuant to § 548(a)(1)(A) of the Bankruptcy Code;

(b) Avoiding the Two Year Transfers made to Loftin Family as fraudulent

transfers in violation of § 548(a)(1)(A) of the Bankruptcy Code;

(c) Disallowing any claim that Loftin Family may have against the Debtor until

such time as Loftin Family repays the Two Year Transfers to the bankruptcy

estate pursuant to 11 U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.

COUNT VII – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(B) OF THE BANKRUPTCY CODE

[AGAINST LOFTIN FAMILY]





49.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

50.

The Loftin Family Two Year Transfers reflected on Exhibit B were made by RRA

within two years prior to the Petition Date.



51. RRA received less than reasonably equivalent value in exchange for the Loftin

Family Two Year Transfers, and

(a)

RRA was insolvent on the dates that the transfers were made or was rendered

insolvent because of those transfers;



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(b)

RRA was engaged in business or a transaction, or was about to engage in business

or a transaction, for which any property remaining with RRA was an unreasonably small capital;

or

(c)

RRA intended to incur, or believed it would incur, debts that would be beyond its

ability to pay as such debts matured.

WHEREFORE, the Trustee respectfully requests the Court enter judgment:

(a)

Declaring the above referenced payments to Loftin Family to have been

fraudulent transfers pursuant to § 548(a)(1)(B) of the Bankruptcy Code;

(b)

Avoiding the Two Year Transfers made to Loftin Family as fraudulent

transfers in violation of § 548(a)(1)(B) of the Bankruptcy Code;

(c) Disallowing any claim that Loftin Family may have against the Debtor

until such time as Loftin Family repays the Two Year Transfers to the bankruptcy estate pursuant

to 11 U.S.C. § 502(d); and

(d)

Granting such other and further relief as may be just and proper.

COUNT VIII – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(A) OF THE BANKRUPTCY CODE

[AGAINST LOFTIN HOSPITALITY]





52.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

53.

The Transfer reflected on Exhibit C was made to Loftin Hospitality within four

years of the Petition Date. The Transfer that was made between November 10, 2007 and October

30, 2009 (the “Loftin Hospitality Two Year Transfer”) was made by RRA within two years prior

to the date that the Involuntary Petition was filed on November 10, 2009.



54.

The Loftin Hospitality Two Year Transfer was made by RRA to Loftin

Hospitality with the actual intent to hinder, delay or defraud an entity to which RRA was or



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became, on or after the date such transfers were made, indebted.

WHEREFORE, the Trustee respectfully requests the Court to enter a Judgment:

(a) Declaring the Loftin Hospitality Two Year Transfer to have been a fraudulent

transfer pursuant to § 548(a)(1)(A) of the Bankruptcy Code;

(b) Avoiding the Two Year Transfer made to Loftin Hospitality as a fraudulent

transfer in violation of § 548(a)(1)(A) of the Bankruptcy Code;

(c) Disallowing any claim that Loftin Hospitality may have against the Debtor

until such time as Loftin Hospitality repays the Two Year Transfer to the

bankruptcy estate pursuant to 11 U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.

COUNT IX – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(B) OF THE BANKRUPTCY CODE

[AGAINST LOFTIN HOSPITALITY]





55.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

56.

The Loftin Hospitality Two Year Transfer reflected on Exhibit C was made by

RRA within two years prior to the Petition Date.



57. RRA received less than reasonably equivalent value in exchange for the Loftin

Hospitality Two Year Transfer, and

(a)

RRA was insolvent on the date that the transfer was made or was rendered

insolvent because of that transfer;

(b)

RRA was engaged in business or a transaction, or was about to engage in business

or a transaction, for which any property remaining with RRA was an unreasonably small capital;

or



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(c)

RRA intended to incur, or believed it would incur, debts that would be beyond its

ability to pay as such debts matured.

WHEREFORE, the Trustee respectfully requests the Court enter judgment:

(a)

Declaring the above referenced payments to Loftin Hospitality to have

been a fraudulent transfer pursuant to § 548(a)(1)(B) of the Bankruptcy Code;

(b)

Avoiding the Two Year Transfer made to Loftin Hospitality as a

fraudulent transfer in violation of § 548(a)(1)(B) of the Bankruptcy Code;

(c) Disallowing any claim that Loftin Hospitality may have against the Debtor

until such time as Loftin Hospitality repays the Two Year Transfer to the bankruptcy estate

pursuant to 11 U.S.C. § 502(d); and

(d)

Granting such other and further relief as may be just and proper.

COUNT X – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(A) OF THE BANKRUPTCY CODE

[AGAINST LUXURY]





58.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

59.

The Transfers reflected on Exhibit D were made to Luxury within four years of

the Petition Date. Those Transfers that were made between November 10, 2007 and October 30,

2009 (the “Luxury Two Year Transfers”) were made by RRA within two years prior to the date

that the Involuntary Petition was filed on November 10, 2009.



60.

The Luxury Two Year Transfers were made by RRA to Luxury with the actual

intent to hinder, delay or defraud an entity to which RRA was or became, on or after the date

such transfers were made, indebted.

WHEREFORE, the Trustee respectfully requests the Court to enter a Judgment:



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(a) Declaring the Luxury Two Year Transfers to have been fraudulent transfers

pursuant to § 548(a)(1)(A) of the Bankruptcy Code;

(b) Avoiding the Two Year Transfers made to Luxury as fraudulent transfers in

violation of § 548(a)(1)(A) of the Bankruptcy Code;

(c) Disallowing any claim that Luxury may have against the Debtor until such

time as Luxury repays the Two Year Transfers to the bankruptcy estate pursuant

to 11 U.S.C. § 502(d); and

(d) Granting such other and further relief as may be just and proper.

COUNT XI – ACTION TO AVOID FRAUDULENT TRANSFERS

PURSUANT TO SECTION 548(A)(1)(B) OF THE BANKRUPTCY CODE

[AGAINST LUXURY]





61.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

62.

The Luxury Two Year Transfers reflected on Exhibit D were made by RRA

within two years prior to the Petition Date.



63. RRA received less than reasonably equivalent value in exchange for the Luxury

Two Year Transfers, and

(a)

RRA was insolvent on the dates that the transfers were made or was rendered

insolvent because of those transfers;

(b)

RRA was engaged in business or a transaction, or was about to engage in business

or a transaction, for which any property remaining with RRA was an unreasonably small capital;

or

(c)

RRA intended to incur, or believed it would incur, debts that would be beyond its

ability to pay as such debts matured.

WHEREFORE, the Trustee respectfully requests the Court enter judgment:



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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 18 of 66

(a)

Declaring the above referenced payments to Luxury to have been

fraudulent transfers pursuant to § 548(a)(1)(B) of the Bankruptcy Code;

(b)

Avoiding the Two Year Transfers made to Luxury as fraudulent transfers

in violation of § 548(a)(1)(B) of the Bankruptcy Code;

(c) Disallowing any claim that Luxury may have against the Debtor until such

time as Luxury repays the Two Year Transfers to the bankruptcy estate pursuant to 11 U.S.C. §

502(d); and

(d)

Granting such other and further relief as may be just and proper.

COUNT XII – RECOVERY OF PROPERTY PURSUANT

TO SECTION 550 OF BANKRUPTCY CODE



64.

The Trustee re-alleges paragraphs 1 through 29 above, as if fully set forth herein.

65.

The Casa Two Year Transfers, Casa Four Year Transfers, Loftin Family Two

Year Transfers, Loftin Hospitality Two Year Transfers, and Luxury Two Year Transfers,

(collectively, the “Transfers”) referenced above are avoidable by the Trustee pursuant to 11

U.S.C. §§ 544 and 548 and as a result, such payments are recoverable by the Trustee pursuant to

11 U.S.C. § 550.

66.

The Defendants were the initial transferees of the above referenced payments

stated in the foregoing counts and Exhibits A through D and/or the entity for whose benefit such

transfers were made.

WHEREFORE, the Trustee respectfully requests the Court to enter a judgment:

(a) Directing the Defendants to turn over the above referenced fraudulent transfers and

payments, plus interest at the applicable federal statutory rate, and reasonable attorneys’ fees and

expenses to the extent permissible by applicable law to the Trustee; and

(b) Granting such other and further relief as may be just and proper.



18

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 19 of 66

COUNT XIII

CLAIM FOR UNJUST ENRICHMENT







67.

The Trustee re-alleges paragraphs 1 through 29 above as if fully set forth herein.

68.

The Debtor conferred a benefit upon the Defendants by making the transfers that

are the subject of Counts I through XI of the Complaint as stated above.



69.

The Defendants knowingly and voluntarily accepted and retained the benefits

conferred by RRA with respect to such transfers.



70.

The circumstances are such that it would be inequitable and unjust for the

Defendants to retain the benefits conferred by RRA without paying the Trustee the value thereof.



71.

The Defendants have been unjustly enriched at the expense of RRA’s bankruptcy

estate.



72.

The Trustee is entitled to the return of those amounts by which the Defendants

were unjustly enriched, through disgorgement or another appropriate remedy.



WHEREFORE, the Trustee respectfully requests the Court enter a judgment in

the full amount of the Transfers against defendants Casa Casuarina, LLC; Loftin Family, LLC;

Loftin Hospitality, LLC and Luxury Resorts, LLC, for pre-judgment interest, costs of suit and all

such other relief as the Court deems just and appropriate.

CLAIM FOR ALTER EGO & PIERCING THE CORPORATE VEIL

COUNT XIV

73.

74.

The Trustee re-alleges paragraphs 1 through 29 above as if fully set forth herein.



On information and belief, the corporate entity that was the intended beneficiary

of all Transfers is defendant Casa Casuarina, LLC, which operates the signature property on

Ocean Drive in South Beach, commonly known as Casa Casuarina or the Versace Mansion (the

“Property”).



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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 20 of 66

75.

The purpose behind Rothstein orchestrating the Transfers with RRA funds was

for Rothstein to acquire an ownership interest in Casa Casuarina LLC and the Property, and also

to pay certain of its operating expenses and improve the Property. Accordingly, all of the

Transfers should have been payable solely to Casa Casuarina, LLC and no other defendant

named in this lawsuit.

76.

At all times relevant hereto, Peter Loftin (“Loftin”) owned or controlled, and

dominated in all respects the business operations, management and affairs of the Property and

Casa Casuarina, LLC; Loftin Family, LLC; Loftin Hospitality, LLC and Luxury Resorts, LLC.

(collectively, the “Loftin Entities”).

77.

Further, at all times relevant hereto, upon information and belief, Loftin and

certain of the Loftin Entities had both personal unsatisfied judgments recorded against them and

lacked personal cash flow, and the Property itself was suffering badly from a combination of

serious economic woes.

78.

Thus, as an improper act, in an intentional effort to divert money from the

Property and to shield the Transfers from creditors so as to gain exclusive personal control over

the transferred funds, Loftin directed Rothstein and RRA to make the Transfers payable to the

various Loftin Entities as described in paragraph 27 above.

79.

Under these circumstances, Casa Casuarina, LLC; Loftin Family, LLC; Loftin

Hospitality, LLC and Luxury Resorts, LLC are all the alter ego of each other and particularly of

Loftin, such that the Trustee is entitled to obtain a joint and several judgment against all of the

defendants for the full amount of the Transfers.

WHEREFORE, the Trustee respectfully requests the Court enter a judgment in the full

amount of the Transfers against defendants Casa Casuarina, LLC; Loftin Family, LLC; Loftin



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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 21 of 66

Hospitality, LLC and Luxury Resorts, LLC, jointly and severally, for pre-judgment interest,

costs of suit and all such other relief as the Court deems just and appropriate.

CLAIM FOR EQUITABLE LIEN IN CASA CASUARINA

COUNT XV



The Trustee re-alleges paragraphs 1 through 29 and above as if fully set forth

On information and belief, the corporate entity that operates the property that was

herein.

80.

81.

the intended beneficiary of all Transfers is defendant Casa Casuarina, LLC, which operates the

Property. The purpose behind Rothstein orchestrating the Transfers with RRA funds was for

Rothstein to acquire an ownership interest in Casa Casuarina LLC and the Property, and also to

pay certain of its operating expenses and improve the Property.

82.

83.

The Plaintiff as Trustee of RRA is the legal title holder to all property of RRA.

The Transfers were effected by Rothstein and RRA to the Loftin Entities, using

RRA funds fraudulently or alternatively, retained by the Loftin Entities under circumstances

such that it would be inequitable for them to retain the Transfers.

84.

Further, at all times relevant hereto, on information and belief, Loftin and certain

of the Loftin Entities had both personal unsatisfied judgments recorded against them and lacked

personal cash flow, and the Property itself was suffering badly from a combination of serious

economic woes.

85.

Thus, in an effort to divert money from the Property and further, to shield the

money which constituted the Transfers from creditors and to gain as much personal control over

the transferred funds as possible, Loftin directed Rothstein and RRA to make the Transfers

payable to the various Loftin Entities as described in paragraph 27 above.



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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 22 of 66

86.

The Loftin Entities have been unjustly enriched to the detriment of the Trustee.

As a result, an equitable lien should be established against the Property as all Transfers and

proceeds of the Transfers are directly traceable for the intended purchase and improvement of the

Property.

WHEREFORE, the Trustee respectfully requests the Court enter a judgment in the full

amount of the Transfers and imposition of an equitable lien to be established against the Property

and all proceeds traceable therefrom, against defendants Casa Casuarina, LLC; Loftin Family,

LLC; Loftin Hospitality, LLC and Luxury Resorts, LLC, jointly and severally, and all such other

relief as the Court deems just and appropriate.

DETERMINATION OF EXTENT AND PRIORITY OF THE EQUITABLE LIEN

COUNT XVI

87.

The Trustee re-alleges paragraphs 1 through 29, and 80 through 86 and above as

if fully set forth herein.

88.

This is an action to determine the validity, priority and extent of liens, claims and

encumbrances as to the Property.

89.

90.

The Trustee asserts an equitable lien against the Property (the “Equitable Lien”).

The Trustee’s Equitable Lien was created at the time that the funds were diverted

from RRA to the Property.

91.

John Does 1-50 are those parties, yet unidentified, who have interests in or against

the Property.

92.

The Equitable Lien is superior to any lien filed by any party that is subsequent to

November 7, 2006, which is the date of the first transfer to the Property.



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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 23 of 66

WHEREFORE, the Trustee respectfully requests the Court enter determining that the

Equitable Lien is superior in priority to all other liens on the Property that emerged subsequent to

November 7, 2006, and all such other relief as the Court deems just and appropriate.

WHEREFORE, the Trustee respectfully requests the Court to enter judgment against the

Defendants in the amount that each Defendant was unjustly enriched, including pre- and post-

judgment interest and costs, and to grant any other relief the Court deems appropriate.

BERGER SINGERMAN, P.A.
Attorneys for the Trustee, Herbert Stettin
Berger Singerman, P.A.
350 East Las Olas Blvd., Suite 1000
Fort Lauderdale, Florida 33301
Main Line: (954) 525-9900
Facsimile: (954) 523-2872


By: /s/Charles H. Lichtman, Esq.



Charles H. Lichtman, Esq.
Fla. Bar No. 501050
[email protected]
Direct Line (954) 712-5138
Isaac M. Marcushamer, Esq.
Fla. Bar No. 0060373
[email protected]





4025851-1



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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 24 of 66

Rothstein Rosenfeldt Adler, P.A.

United States Bankruptcy Court

Southern District of Florida

Ft. Lauderdale Division

Case No. 09-34791-BKC-RBR

Check Numbers

Payments

17649
17651
17650
18790
19515
19739
19746
21158
22501
22715
25440
26243
WIRE
WIRE
WIRE

$
$
$
$
$
$
$
$
$
$
$
$
$
$
$

1,500.00
2,400.00
50,000.00
1,222.37
13,141.73
5,258.45
25,686.12
224.70
224.70
4,566.76
224.70
224.70
50,964.08
200,000.00
125,000.00

$

480,638.31

Date

11/7/2006
11/7/2006
11/7/2006
2/23/2007
4/27/2007
5/15/2007
5/16/2007
8/23/2007
11/26/2007
12/14/2007
5/22/2008
8/27/2008
9/2/2009
9/3/2009

10/21/2009

Total



EXHIBIT A

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 25 of 66

Rothstein Rosenfeldt Adler, P.A.

United States Bankruptcy Court

Southern District of Florida

Ft. Lauderdale Division

Case No. 09-34791-BKC-RBR

Date

09/04/09
09/21/09
10/08/09
10/09/09

Check Numbers

Payments

WIRE
WIRE
WIRE
WIRE

$
$
$
$

1,000,000.00
500,000.00
195,000.00
580,000.00

TOTAL

$

2,275,000.00

EXHIBIT B

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 26 of 66

Rothstein Rosenfeldt Adler, P.A.

United States Bankruptcy Court

Southern District of Florida

Ft. Lauderdale Division

Case No. 09-34791-BKC-RBR

Date

08/10/09

Check Numbers

WIRE

Payments
$

41,341.81

TOTAL

$

41,341.81

EXHIBIT C

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 27 of 66

Rothstein Rosenfeldt Adler, P.A.

United States Bankruptcy Court

Southern District of Florida

Ft. Lauderdale Division

Case No. 09-34791-BKC-RBR

Date

07/24/09
08/03/09
08/10/09

Check Numbers

Payments

WIRE
WIRE
WIRE

$
$
$

1,125,000.00
500,000.00
500,000.00

TOTAL

$

2,125,000.00

EXHIBIT D

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 28 of 66

EXHIBIT E

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 29 of 66

Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 30 of 66

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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 34 of 66

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Case 11-02779-RBR Doc 1 Filed 11/11/11 Page 38 of 66

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