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Fine Art Brokers and Fraudulent Transfers
Steve:
If he comingled the money in his personal account, you probably won't be able to convince a judge he didn't own the funds.
d
Dennis McGoldrick, 350 S. Crenshaw Bl., #A207B, Torrance, Ca 90503 310-328-1001-voice
> On Aug 20, 2015, at 6:01 PM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa] wrote:
>
> That's what I'm worried about...proving he never owned it. He certainly "owned" the money when it was in his bank account, by definition.
>
>
>> On 8/20/2015 5:34 PM, 'Steven B. Lever' sblever@leverlaw.com [cdcbaa] wrote:
>> But the buyer and seller transacted an arms length agreement for the value of each artwork. Unless his commission is some huge percentage, I still dont see the problem. The artwork was never owned by him, so its not a transfer of something he owned.
>>
>>
>>
>>
>>
>> Law Offices of Steven B. Lever
>>
>>
>>
>> Steven B. Lever
>>
>> ( Tel. (562) 436-5456 ext. 1
>>
>> ( Fax (562) 485-6886
>>
>> * sblever@leverlaw.com
>>
>> www.leverlaw.com
>>
>>
>>
>> Sent: Thursday, August 20, 2015 5:30 PM
>> To: cdcbaa@yahoogroups.com
>> Subject: Re: [cdcbaa] Fine Art Brokers and Fraudulent Transfers
>>
>>
>>
>>
>>
>> Yes he uses a separate bank account for these transactions with the name of a dba he set up. But that doesn't change the fact it is a possible F/T because he had funds in his account and then transferred them to another party without receiving reasonably equivalent value (arguably).
>>
>> On 8/20/2015 5:25 PM, 'Steven B. Lever' sblever@leverlaw.com [cdcbaa] wrote:
>>
>> Mark:
>>
>>
>>
>> He doesnt use his personal bank account does he? Hopefully he at least has a separate bank account as a sole proprietor. If he works it through an entity all the better.
>>
>>
>>
>> There are written records Im sure that back up all the numbers through the bank, so id dont see this as a problem. Hes just doing businesshow can that be construed as a fraudulent transfer?
>>
>>
>>
>> Steve
>>
>>
>>
>>
>>
>> Law Offices of Steven B. Lever
>>
>>
>>
>> Steven B. Lever
>>
>> ( Tel. (562) 436-5456 ext. 1
>>
>> ( Fax (562) 485-6886
>>
>> * sblever@leverlaw.com
>>
>> www.leverlaw.com
>>
>>
>>
>> Sent: Thursday, August 20, 2015 3:22 PM
>> To: cdcbaa@yahoogroups.com
>> Subject: [cdcbaa] Fine Art Brokers and Fraudulent Transfers
>>
>>
>>
>>
>>
>> I have a PNC who is an art "broker". He basically finds buyers for people selling fine art, and then handles the entire transaction acting sort of as an escrow agent as well. He receives the money from the buyer, then pays applicable sales taxes, arranges shipping, pays the buyer, and takes a commission which is part of a consignment agreement.
>>
>> Unfortunately (I think) all the funds pass through a dedicated bank account that is NOT a trust account.
>>
>> So I'm concerned about 548 issues if we file a Chapter 7 case. And, being that it's fine art, the numbers are pretty large.
>>
>> Does anyone have experience with this industry and these types of transactions vis a vis bankruptcy? The artwork and funds clearly do not belong to the debtor--he acts solely as an intermediary. But how do I prove this to a Trustee and Judge?
>>
>> Perhaps the Trustees on the list can chime in with their positions...(this will be an LA case if filed, so if we have any LA Trustees, they can abstain).
>>
>>
>>
>>
>> *************************
>> Mark J. Markus
>> Law Office of Mark J. Markus
>> Mailing Address Only:
>> 11684 Ventura Blvd. PMB #403
>> Studio City, CA 91604-2652
>> (818)509-1173 (818)332-1180 (fax)
>> web: http://www.bklaw.com/
>> Certified Bankruptcy Law Specialist--The State Bar of California Board of Legal Specialization
>> This Firm is a Qualified Federal Debt Relief Agency
>> ________________________________________________
>> NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
>> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
>>
>>
>>
>> --
>>
>> *************************
>> Mark J. Markus
>> Law Office of Mark J. Markus
>> Mailing Address Only:
>> 11684 Ventura Blvd. PMB #403
>> Studio City, CA 91604-2652
>> (818)509-1173 (818)332-1180 (fax)
>> web: http://www.bklaw.com/
>> Certified Bankruptcy Law Specialist--The State Bar of California Board of Legal Specialization
>> This Firm is a Qualified Federal Debt Relief Agency
>> ________________________________________________
>> NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
>> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
>
>
> --
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> Mailing Address Only:
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (fax)
> web: http://www.bklaw.com/
> Certified Bankruptcy Law Specialist--The State Bar of California Board of Legal Specialization
> This Firm is a Qualified Federal Debt Relief Agency
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office of Mark J. Markus that may be privileged. The information is intended for the use of the addressee only. If you are not the addressee, note that any disclosure, copy, distribution or use of the contents of this message is prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication.
>
type="text/html";
boundaryple-Mail-1AE97175-9F18-4842-9F8E-A2B7B891DE60
The post was migrated from Yahoo.
If the facts are as you stated, he should not have much trouble defending
against a fraudulent transfer action, if any. The Trustee will most likely
ask for documentation which substantiates your client's claims.
You are correct that your client is the owner of the money but your
argument is that he has bare naked title and no more. If you are correct
regarding the "and no more" part of the facts, then the Trustee cannot even
make a prima facie case because he won't be able to satisfy the "interest
of the debtor" prong.
I agree with your instincts though because this is not a clear cut
situation. Maybe the relationship was not really one of a consignor /
escrow but was actually a creditor/debtor relationship. There are many
theories that may be used and if I was the Trustee, I would definitely do
my due diligence by requesting a lot of documentation.
So my advice would be for you to ask for those same documents and confirm
the facts are as you state them. Do a complete analysis and warn your
client of the possible dangers. Before filing the case, I would draft my
letter to the trustee, with evidence, that supports your position. If your
client is unwilling to pay you for all that work and would like to file bk
anyway, then make sure you have him sign a written waiver.
Sincerely,
*Michael Avanesian, Esq. *
Simon Resnik Hayes, LLP
15233 Ventura Blvd., Suite 250
Sherman Oaks, CA 91403
Tel: 818.783.6251 | Cel: 818.817.1725
*Confidentiality**: *This electronic transmission and its contents are
legally privileged and confidential information and intended solely for the
use of the addressee. If the reader of this message is not the intended
recipient, you are hereby notified that any dissemination, distribution,
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prohibited. If you have received this transmission in error, please reply
to us immediately and delete this message from your directory.
*IRS Circular 230 Disclosure:* To ensure compliance with requirements
imposed by the IRS, please be advised that any U.S. federal tax advice
contained in this communication (including any attachments) is not intended
or written to be used or relied upon, and cannot be used or relied upon,
for the purpose of (i) avoiding penalties under the Internal Revenue Code,
or (ii) promoting, marketing or recommending to another party any
transaction or matter addressed herein.
On Thu, Aug 20, 2015 at 6:01 PM, 'Mark J. Markus' bklawr@yahoo.com [cdcbaa]
wrote:
>
>
> That's what I'm worried about...proving he never owned it. He certainly
> "owned" the money when it was in his bank account, by definition.
>
>
>
> On 8/20/2015 5:34 PM, 'Steven B. Lever' sblever@leverlaw.com [cdcbaa]
> wrote:
>
> But the buyer and seller transacted an arms length agreement for the
> value of each artwork. Unless his commission is some huge percentage, I
> still dont see the problem. The artwork was never owned by him, so its
> not a transfer of something he owned.
>
>
>
>
>
> Law Offices of Steven B. Lever
>
>
>
> Steven B. Lever
>
> ( Tel. (562) 436-5456 ext. 1
>
> ( Fax (562) 485-6886
>
> * sblever@leverlaw.com
>
> www.leverlaw.com
>
>
>
> *From:* cdcbaa@yahoogroups.com [mailto:cdcbaa@yahoogroups.com
> ]
> *Sent:* Thursday, August 20, 2015 5:30 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* Re: [cdcbaa] Fine Art Brokers and Fraudulent Transfers
>
>
>
>
>
> Yes he uses a separate bank account for these transactions with the name
> of a dba he set up. But that doesn't change the fact it is a possible F/T
> because he had funds in his account and then transferred them to another
> party without receiving reasonably equivalent value (arguably).
>
> On 8/20/2015 5:25 PM, 'Steven B. Lever'
> sblever@leverlaw.com [cdcbaa] wrote:
>
> Mark:
>
>
>
> He doesnt use his personal bank account does he? Hopefully he at least
> has a separate bank account as a sole proprietor. If he works it through
> an entity all the better.
>
>
>
> There are written records Im sure that back up all the numbers through
> the bank, so id dont see this as a problem. Hes just doing businesshow
> can that be construed as a fraudulent transfer?
>
>
>
> Steve
>
>
>
>
>
> Law Offices of Steven B. Lever
>
>
>
> Steven B. Lever
>
> ( Tel. (562) 436-5456 ext. 1
>
> ( Fax (562) 485-6886
>
> * sblever@leverlaw.com
>
> www.leverlaw.com
>
>
>
> *From:* cdcbaa@yahoogroups.com [
> mailto:cdcbaa@yahoogroups.com ]
> *Sent:* Thursday, August 20, 2015 3:22 PM
> *To:* cdcbaa@yahoogroups.com
> *Subject:* [cdcbaa] Fine Art Brokers and Fraudulent Transfers
>
>
>
>
>
> I have a PNC who is an art "broker". He basically finds buyers for people
> selling fine art, and then handles the entire transaction acting sort of as
> an escrow agent as well. He receives the money from the buyer, then pays
> applicable sales taxes, arranges shipping, pays the buyer, and takes a
> commission which is part of a consignment agreement.
>
> Unfortunately (I think) all the funds pass through a dedicated bank
> account that is NOT a trust account.
>
> So I'm concerned about 548 issues if we file a Chapter 7 case. And, being
> that it's fine art, the numbers are pretty large.
>
> Does anyone have experience with this industry and these types of
> transactions vis a vis bankruptcy? The artwork and funds clearly do not
> belong to the debtor--he acts solely as an intermediary. But how do I
> prove this to a Trustee and Judge?
>
> Perhaps the Trustees on the list can chime in with their positions...(this
> will be an LA case if filed, so if we have any LA Trustees, they can
> abstain).
>
>
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> *Mailing Address Only:*
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (fax)
> web: http://www.bklaw.com/
> Certified Bankruptcy Law Specialist--The State Bar of California Board of
> Legal Specialization
> This Firm is a Qualified Federal Debt Relief Agency
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office
> of Mark J. Markus that may be privileged. The information is intended for
> the use of the addressee only. If you are not the addressee, note that any
> disclosure, copy, distribution or use of the contents of this message is
> prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by
> the IRS, we inform you that any U.S. tax advice contained in this
> communication (or in any attachment) is not intended or written to be used,
> and cannot be used, for the purpose of (i) avoiding penalties under the
> Internal Revenue Code or (ii) promoting, marketing or recommending to
> another party any transaction or matter addressed in this communication.
>
>
>
> --
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> *Mailing Address Only:*
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (fax)
> web: http://www.bklaw.com/
> Certified Bankruptcy Law Specialist--The State Bar of California Board of
> Legal Specialization
> This Firm is a Qualified Federal Debt Relief Agency
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office
> of Mark J. Markus that may be privileged. The information is intended for
> the use of the addressee only. If you are not the addressee, note that any
> disclosure, copy, distribution or use of the contents of this message is
> prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by
> the IRS, we inform you that any U.S. tax advice contained in this
> communication (or in any attachment) is not intended or written to be used,
> and cannot be used, for the purpose of (i) avoiding penalties under the
> Internal Revenue Code or (ii) promoting, marketing or recommending to
> another party any transaction or matter addressed in this communication.
>
>
>
> --
>
> *************************
> Mark J. Markus
> Law Office of Mark J. Markus
> *Mailing Address Only:*
> 11684 Ventura Blvd. PMB #403
> Studio City, CA 91604-2652
> (818)509-1173 (818)332-1180 (fax)
> web: http://www.bklaw.com/
> Certified Bankruptcy Law Specialist--The State Bar of California Board of
> Legal Specialization
> This Firm is a Qualified Federal Debt Relief Agency
> ________________________________________________
> NOTICE: This Electronic Message contains information from the law office
> of Mark J. Markus that may be privileged. The information is intended for
> the use of the addressee only. If you are not the addressee, note that any
> disclosure, copy, distribution or use of the contents of this message is
> prohibited.
> IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by
> the IRS, we inform you that any U.S. tax advice contained in this
> communication (or in any attachment) is not intended or written to be used,
> and cannot be used, for the purpose of (i) avoiding penalties under the
> Internal Revenue Code or (ii) promoting, marketing or recommending to
> another party any transaction or matter addressed in this communication.
>
>
>
If the facts are as you stated, he should not have much trouble defending against a fraudulent transfer action, if any. The Trustee will most likely ask for documentation which substantiates your client's claims.You are correct that your client is the owner of the money but your argument is that he has bare naked title and no more. If you are correct regarding the "and no more" part of the facts, then the Trustee cannot even make a prima facie case because he won't be able to satisfy the "interest of the debtor" prong.e this is not a clear cut situation. Maybe the relationship was not really one of a consignor / escrow but was actually a creditor/debtor relationship. There are many theories that may be used and if I was the Trustee, I would definitely do my due diligence by requesting a lot of documentation. those same documents and confirm the facts are as you state them. Do a complete analysis and warn your client of the possible dangers. Before filing the case, I would draft my letter to the trustee, with evidence, that supports your position. If your client is unwilling to pay you for all that work and would like to file bk anyway, then make sure you have him sign a written waiver.Sincerely,Michael Avanesian, Esq.
The post was migrated from Yahoo.