From November 1, 2010 through November 10, 2010, the Chapter 11 Trustee in the DBSI Inc. bankruptcy has launched 853 avoidance actions against investors and trade creditors. The avoidance actions are unique for several reasons.
- Bankruptcy preference recovery under Section 547 is most often a small portion (or none) of the total claim amount. The trustee’s focus instead is on fraudulent transfer recovery under Section 548 (a 2 year look back) and under Idaho state law (a 4 year look back).
- Many of the actions are brought to recover transfers by DBSI affiliates who were not debtors in the bankruptcy but who were substantively consolidated with the Debtors under the Second Amended Joint Plan of Liquidation (confirmed on October 26, 2010).
- The non-debtor substantive consolidation is retroactively effective as of November 10, 2008, which allows the trustee to try and pull in 2 years of transfers that otherwise would be outside of the statute of limitations.
- Under a Global Claims Settlement (Section V of the Plan) and Order Authorizing Consolidated Adversary Proceedings (entered November 4, 2010), a number of the investor defendants may never be served the complaint. On the effective date of the Plan, the avoidance claims against certain investors will be “waived and extinguished” and service of the complaints against these investors has been stayed.
Related Materials:
- The report of substantive docket entries in these 812 adversary proceedings can be accessed by clicking this link.
- To see an APScans report of the complaints, dismissals, defaults and judgments in these adversary proceedings, click this link.
Adversary Proceedings Overview
Lead Bankruptcy Case Name (Case Number): In re DBSI INC. (08-12687)
Petition Date: Lead Debtor Petition Date November 10, 2008
Filed in: United States Bankruptcy Court for the District of Delaware
Associated Cases: The associated debtors are: 1031 Brookhollow One LLC; Belton Town Center Acquisition LLC; DBSI 12 South Place LeaseCo LLC; DBSI 121/Alma Land L.P.; DBSI 121/Alma LLC; DBSI 13000 Weston Parkway LeaseCo LLC; DBSI 14001 Weston Parkway LeaseCo LLC; DBSI 2001A Funding Corporation; DBSI 2001B Funding Corporation; DBSI 2001C Funding Corporation; DBSI 2005 Secured Notes Corporation; DBSI 2006 Land Opportunity Fund LLC; DBSI 2006 Secured Notes Corporation; DBSI 2007 Land Improvement & Development LLC; DBSI 2008 Development Opportunity Fund LLC; DBSI 2008 Land Option Fund LLC; DBSI 2008 Notes Corporation; DBSI 2nd Street Quad LeaseCo LLC; DBSI 700 Locust LeaseCo LLC; DBSI Abbotts Bridge LeaseCo LLC; DBSI Academy Park Loop LeaseCo LLC; DBSI Allison Pointe LeaseCo LLC; DBSI Alma 121 Office Commons LLC; DBSI Amarillo Apartments LeaseCo LLC; DBSI Anna Plaza LeaseCo LLC; DBSI Arlington Town Square LeaseCo LLC; DBSI Arrowhead LeaseCo LLC; DBSI Asset Management LLC; DBSI Avenues North Center LeaseCo LLC; DBSI Bandera Trails LeaseCo LLC; DBSI Battlefield Station LeaseCo LLC; DBSI Belton Town Center LeaseCo LLC; DBSI Breckinridge LeaseCo LLC; DBSI Brendan Way LeaseCo LLC; DBSI Broadway Plaza LeaseCo LLC; DBSI Brookfield Pelham LeaseCo LLC; DBSI Brookhollow One LLC; DBSI Cambridge Place LeaseCo LLC; DBSI Carolina Commons LeaseCo LLC; DBSI Cedar East and Cypress LeaseCo LLC; DBSI Clear Creek Square LeaseCo LLC; DBSI Collins Offices LLC; DBSI Colony West Development LLC; DBSI Copperfield Timbercreek LeaseCo LLC; DBSI Corporate Center II LeaseCo LLC; DBSI Corporate Woods LeaseCo LLC; DBSI Cottonwood Plaza Development LLC; DBSI CP Clearwater LeaseCo LLC; DBSI CP Ironwood LeaseCo LLC; DBSI Cranberry LeaseCo LLC; DBSI Cross Pointe LeaseCo LLC; DBSI Crosstown Woods LeaseCo LLC; DBSI Daniel Burnham LeaseCo LLC; DBSI Decatur LeaseCo LLC; DBSI Development Services LLC; DBSI Discovery Real Estate Services LLC; DBSI Draper LeaseCo LLC; DBSI Draper Technology 21 LLC; DBSI E-470 East LLC; DBSI Eagles Landing LeaseCo LLC; DBSI Embassy Tower LeaseCo LLC; DBSI Escala LLC; DBSI Executive Dr LeaseCo LLC; DBSI Executive Park LeaseCo LLC; DBSI Executive Plaza LeaseCo LLC; DBSI Fairlane Green LeaseCo LLC; DBSI Fairway LeaseCo LLC; DBSI Florissant Market Place LeaseCo LLC; DBSI Flowood Plaza LLC; DBSI Gadd Crossing LeaseCo LLC; DBSI Ghent Road LeaseCo LLC; DBSI Grant Street Portfolio LeaseCo LLC; DBSI Green Street Commons Leaseco LLC; DBSI Guaranteed Capital Corporation; DBSI Hampton LeaseCo LLC; DBSI Hickory Plaza LeaseCo LLC; DBSI Highlands & Southcreek LeaseCo LLC; DBSI Houston Levee Galleria Leaseco LLC; DBSI Inc.; DBSI Kemper Pointe LeaseCo LLC; DBSI Kenwood Center LeaseCo LLC; DBSI Keystone Commerce LeaseCo LLC; DBSI Lake Ellenor LeaseCo LLC; DBSI Lake Natoma LeaseCo LLC; DBSI Lamar LeaseCo LLC; DBSI Land Development LLC; DBSI Landmark Towers Leaseco LLC; DBSI Lansdowne I LP; DBSI Lexington LLC; DBSI Lifestyle Center LeaseCo LLC; DBSI Lincoln Park 10 LeaseCo LLC; DBSI Lone Peak Parkway LLC; DBSI Mansell Forest LeaseCo LLC; DBSI Mansell Place LeaseCo LLC; DBSI Master Leaseco, Inc.; DBSI Meadow Chase Apartments LeaseCo LLC; DBSI Megan Crossings LeaseCo LLC; DBSI Meridian I84 LLC; DBSI Metropolitan Square LeaseCo LLC; DBSI Missouri LeaseCo LLC; DBSI Network LeaseCo LLC; DBSI North Logan Retail Center LeaseCo LLC; DBSI North Park LeaseCo LLC; DBSI North Stafford LeaseCo LLC; DBSI Northgate LeaseCo LLC; DBSI Northlite Commons II LeaseCo LLC; DBSI Northpark Ridgeland LeaseCo LLC; DBSI Northridge LeaseCo LLC; DBSI Oakwood Plaza LeaseCo LLC; DBSI Old National Town Center LeaseCo LLC; DBSI One Executive Center LeaseCo LLC; DBSI One Hanover LeaseCo LLC; DBSI One Hernando Center North LLC; DBSI Park Creek-Gainesville LeaseCo LLC; DBSI Parkway III LeaseCo LLC; DBSI Peachtree Corners Pavilion LeaseCo LLC; DBSI Phoenix Peak LeaseCo LLC; DBSI Pinehurst Square East LeaseCo LLC; DBSI Pinehurst Square West LeaseCo LLC; DBSI Plano Tech Center LeaseCo LLC; DBSI Portofino Tech Center LeaseCo LLC; DBSI Properties Inc.; DBSI Real Estate Funding Corporation; DBSI Realty Inc.; DBSI Republic LeaseCo LLC; DBSI Road 68 Retail Center LeaseCo LLC; DBSI Sam Houston Tech Center LeaseCo LLC; DBSI Sapphire Pointe LeaseCo LLC; DBSI Securities Corporation; DBSI Sherwood Plaza LeaseCo LLC; DBSI Shoppes at Misty Meadows LeaseCo LLC; DBSI Shoppes at Trammel LeaseCo LLC; DBSI Shoppes at Trammel LLC; DBSI Short-Term Development Fund LLC; DBSI Signature Place LeaseCo LLC; DBSI Silver Lakes LeaseCo LLC; DBSI South 75 Center LeaseCo LLC; DBSI Southport Pavilion LeaseCo LLC; DBSI Spalding Triangle LeaseCo LLC; DBSI Spring Valley Road LeaseCo LLC; DBSI Springville Corner LeaseCo LLC; DBSI ST Tower LeaseCo LLC; DBSI St. Andrews Place LeaseCo LLC; DBSI Stone Glen Village LeaseCo LLC; DBSI Stony Brook South LeaseCo LLC; DBSI Streetside at Towne Lake LeaseCo LLC; DBSI Telecom Office LLC; DBSI Topsham Fair Mall LeaseCo LLC; DBSI Torrey Chase LeaseCo LLC; DBSI Treasure Valley Business Center LeaseCo LLC; DBSI Trinity Ridge Business Center LeaseCo LLC; DBSI Two Notch Rd. LeaseCo LLC; DBSI University Park LeaseCo LLC; DBSI Vantage Drive LeaseCo LLC; DBSI Watkins LeaseCo LLC; DBSI West Oaks Square LeaseCo LLC; DBSI Wilson Estates LeaseCo LLC; DBSI Winchester Office LeaseCo LLC; DBSI Windcom Court LeaseCo LLC; DBSI Wisdom Pointe LeaseCo LLC; DBSI Woodlands Medical Office I LeaseCo LLC; DBSI Woodside Center LeaseCo LLC; DBSI/Western Technologies LLC; DCJ Inc; Florissant Market Place Acquisition LLC; FOR 1031 Broadway Plaza LLC; FOR 1031 LLC; One-Executive Tower LLC; South Cavanaugh LLC; Spectrus Real Estate Inc; Surprise Farms LLC;
Plaintiff: James R. Zazzali, as Trustee for the Debtors Jointly-Administered Chapter 11 Estates and/or as Litigation Trustee for the DBSI Estate Litigation Trust
Number of Proceedings: 853
When Filed: November 1,2010 through November 10, 2010
Adversary Proceeding Judge: Peter J. Walsh
Plaintiff’s Counsel: Joint Plaintiff’s Counsel on 498 complaints are: Phillips, Goldman & Spence, P.A. (Wilmington, Delaware) through its attorneys Stephen W. Spence Stephen A. Spence with co-counsel Mitnick & Malzberg, P.C. (Frenchtown, New Jersey) through its attorney Steven J. Mitnick; Plaintiff’s Counsel on 355 complaints is Gibbons P.C. through its attorneys William R. Firth, III (Wilmington, Delaware office), Dale E. Barney, Esq. Mark B. Conlan, Esq. (Newark, New Jersey office) and Jeffrey S. Berkowitz, and Christopher A. Albanese (New York, New York office)
Preference Period: The complaint identifies the preference period as starting August 12, 2008 and ending on November 9, 2008. The preference period varies defending on the filing date for each debtor. While 146 of the associated debtors did file on November 10, 2010, additional debtors filed at other times. The last petition filing occurred on March 3, 2010.