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IN!✓ <br /> B. DEFENDANTS' FRAUDULENT CONVEYANCE <br /> CAUSE OF ACTION MUST BE DISMISSED <br /> In their attempt to disrupt the County's affordable housing project and obtain millions of <br /> dollars which Defendants are not entitled to, Defendants have filed a lis pendens against the <br /> subject property. The sole basis for the lis pendens is Defendants' meritless"fraudulent transfer" <br /> cause of action. See 12 of Fritz Dec, Exhibit `B". <br /> In order to prevail on a fraudulent transfer theory, Defendants have a heightened burden <br /> of proof and must prove each element by"clear and convincing"evidence. Kekona v. Abastillas, <br /> 113 Hawaii 174, 181, 150 P.3d 823, 830 (2006). Not only do Defendants fall far short of their <br /> burden of proof, they fail to even articulate a basis to establish a fraudulent transfer. <br /> 1. Defendants Falsely State that WWH Became <br /> Indebted to Defendants Prior to the Transfer <br /> Defendants allege that on April 17, 2009, WWH became indebted to UniDev in the <br /> amount of$3.2 million dollars. See 139 of counterclaim, Exhibit `B". Defendants allege that <br /> on April 22, 2009, WWH transferred its leasehold interest to HINT. See 140 of counterclaim, <br /> Exhibit `B". Therefore,Defendants allege the transfer was made simply to avoid the$3.2 <br /> million debt. <br /> However,contrary to the allegations in the counterclaim, it was not until April 30, 2009, <br /> 8 days after the property had been transferred, that Defendants first claimed they were <br /> entitled to $3.2 million.9 See Exhibit "H". <br /> Apparently, realizing that their"fraudulent transfer"theory would fail if their demand for <br /> $3.2 million was after the transfer,Defendants allege in the counterclaim that the debt arose on <br /> April 17, 2009, prior to the transfer of the property. However, as noted, their claim is without <br /> any merit. In fact, the invoices themselves are dated April 30, 2009. See Exhibit "H". In <br /> These are same invoices which serve the basis for the County's false claims violation pursuant to HRS§46-171 and Exhibit <br /> "A"at pp. 12-13. <br /> 7 <br />