IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ALABAMA, NORTHERN DIVISION ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) COMPLAINT

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1 Document Page 1 of 8 IN THE UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF ALABAMA, NORTHERN DIVISION IN RE: PRICEVILLE PARTNERS, LLC, Stuart M. Maples, Trustee for PRICEVILLE PARTNERS, LCC, vs. Plaintiff, ANA FRANKLIN, Defendant. CASE NO CRJ11 ADVERSARY CASE NO. COMPLAINT COMES NOW the plaintiff Stuart M. Maples, Trustee for Priceville Partners, LLC ("Trustee", and files this Complaint to recover Estate funds and the value of vehicles, tractors, and related assets wrongfully paid to or now held in the possession of the defendant, Ana Franklin ( Defendant and for other just relief. Trustee states his grounds as follows: PARTIES 1. Priceville Partners, LLC, is a Debtor in this Court, having filed a Chapter 11 Bankruptcy Petition on March 4, Ana Franklin is a resident of Morgan County, Alabama, and is over the age of nineteen (19. JURISDICTION 3. This adversary proceeding is commenced pursuant to Rule 7001(1 of the Federal Rules of Bankruptcy Procedure. 4. This Court has subject matter jurisdiction in accordance with 28 U.S.C

2 Document Page 2 of 8 5. Venue is proper pursuant to 28 U.S.C and 1409 as this is a core proceeding pursuant to 28 U.S.C. 157(b(2(A, (E and (O. FACTUAL ALLEGATIONS 6. From June 2013 to February 2016, Gregory R. Steenson ( Steenson owned a 40% membership interest in Priceville Partners, LLC ( Debtor or Priceville Partners, and essentially served as its General Manager for sales and related operations. In his capacity as such, Steenson was authorized to sign checks of Debtor, collect money for deposit into the banking account(s of Debtor, and use the credit card of Debtor, all for company purposes. Steenson, however, was never authorized to utilize assets of the Debtor for his personal benefit. 7. Defendant Ana Franklin was an insider who invested over $150, in the business of the Debtor. 8. Debtor also did business as Performance Auto Sales. 9. On March 20, 2014, Steenson negotiated the purchase by Defendant of a white 1999 Sundown Sunlite Trailer, VIN 13SLD3523X1LA1559, ( Trailer for a total price of $15,466.50, including tax and fees. 10. The interest rate Steenson charged Defendant was 5%, well below the typical interest rate of 21%. 11. The bill of sale for the Trailer, signed by Steenson and Defendant, indicates that a cash down payment was made in the amount of $5,466.50, with the balance due of $10, Steenson paid an individual named Jerry King $10, for the 1999 Sundown trailer on or about March 21, 2014, with Debtor s check # 1451, which check stub reads: To Ana Franklin. 2

3 Document Page 3 of The written account of the sale from Jerry King states that King sold the Trailer to Defendant for $15, Debtor s records reflect that, beginning November 20, 2014, no payments by check were made by Defendant for the Trailer; any payments purportedly made were made in cash to Steenson. 15. Defendant failed to pay off the negotiated purchase amount for the Trailer, owing $5, in September Defendant has not returned the Trailer to Debtor. 17. Upon information and belief, the aforementioned transaction was for the personal debt owed by Steenson to the Defendant and not for any company purpose. 18. Debtor obtained no benefit from the transfer of its property or related property by Steenson to Defendant as payment for Steenson s personal obligation. 19. Defendant made two title loans with Debtor, facilitated by Steenson, naming the Trailer as pledged motor vehicle: a one for $5, on March 22, 2014, payable on April 22, 2014, with 18% monthly interest rate, and b one for $4, on April 22, 2014, payable May 22, 2014, with 18% interest. 20. On the dates of both of the aforementioned title loans, Defendant did not have clear title to the Trailer used as pledged motor vehicle. 21. Debtor has no record that Defendant made any reimbursement of these title loans to Debtor. 22. Upon information and belief, the aforementioned transaction was for the personal debt owed by Steenson to the Defendant and not for any company purpose. 3

4 Document Page 4 of Debtor obtained no benefit from the transfer of its property or related property by Steenson to Defendant as payment for Steenson s personal obligation. 24. On August 24, 2015, Steenson negotiated a financed purchase agreement ("Purchase Agreement" with Defendant, wherein Debtor agreed to sell and Defendant did purchase, a 2004 John Deere 5303 Tractor (the "Tractor" with front end loader (VIN PY5303U002356, for a total price of $15, Defendant made no down payment. 25. Debtor s records reflect that no payments by check were made by Defendant for the Tractor.; Defendant purportedly made two cash payments of $300.00, each in September and November of No further payments were recorded until December 23, 2015, at which time Defendant purportedly made an "early payoff" in cash of $14,900.00, which cash was purportedly paid to Steenson. 27. There is no record of any early payoff payment by Defendant being deposited into any of Debtor's affiliated bank accounts. 28. Defendant never paid off such sum and, instead, received the entire benefit of such payment without consideration. 29. Defendant has not returned the Tractor to Debtor. 30. Upon information and belief, the aforementioned transaction was for the personal debt owed by Steenson to the Defendant and not for any company purpose. 31. Debtor obtained no benefit from the transfer of its property by Steenson to Defendant as payment for Steenson s personal obligation. 4

5 Document Page 5 of In or about September 2015, Defendant used a check issued from Debtor at the direction of Steenson, payable to Defendant and endorsed by Defendant, to buy a white Ford dually truck ( Truck. 33. Debtor has no record of any repayment by Defendant for the $15, check or return of the Truck to Debtor. 34. Upon information and belief, the aforementioned transaction was for the personal debt owed by Steenson to the Defendant and not for any company purpose. 35. Debtor obtained no benefit from the money transferred by Steenson to Defendant as payment for Steenson s personal obligation or the transfer of the Truck to Defendant. herein. COUNT ONE UNJUST ENRICHMENT 36. Trustee re-alleges and incorporates all the preceding paragraphs as if fully set out 37. Debtor received no benefit in exchange for the transactions by Steenson involving the Trailer, the Tractor, the Truck, and the loans, and Defendant was unjustly enriched by Steenson s sale of the Trailer, the Tractor, and the Truck and by his giving Defendant the cash from the loans. 38. Defendant is due to return the value of the balance on the Trailer, which amount is $5,826.52, plus interest, and which transfer unjustly enriched Defendant to the detriment of Priceville Partners. 39. Defendant is due to return the balance on the Tractor, which amount is $14,813.95, and which transfer unjustly enriched Defendant to the detriment of Priceville Partners. 40. Defendant is due to return the the $15, paid to Defendant by Steenson from Debtor s account without cause and also the value of the Truck at the time of the transfer to 5

6 Document Page 6 of 8 Defendant, and which transactions unjustly enriched Defendant to the detriment of Priceville Partners. WHEREFORE, premises considered, Trustee prays for a judgment in favor of the Estate and against Defendant Ana Franklin ordering the return to Debtor of money representative of the unjust enrichment as hereinabove delineated. Trustee requests such other, further, or different relief to which Debtor may be entitled, including but not limited to attorneys fees, costs, interest, and damages as the Court deems just and proper. COUNT TWO FRAUDULENT TRANSFERS UNDER 11 U.S.C. 548(a(1(B(i-(iv 41. Trustee re-alleges and incorporates and incorporates all the preceding paragraphs as if fully set forth herein. 42. Debtor received less than a reasonably equivalent value in exchange for the transaction with Defendant involving the Trailer, which transfer to Defendant was fraudulent under 548(a(1(B(i-(iv and without benefit to the Estate. 43. The fraudulent transfer of the Trailer was made within two years before the date of filing the petition. 44. Defendant owes the Estate the value of the Trailer at the time of the transfer to Defendant, which amount is $5,826.52, as a result of this fraudulent transfer. To date, neither the Trailer nor its value have been returned to the Estate. 45. Debtor received less than a reasonably equivalent value in exchange for the transaction with Defendant involving the Tractor, which transfer to Defendant was fraudulent under 548(a(1(B(i-(iv and without benefit to the Estate. 46. The fraudulent transfer of the Tractor was made within two years before the date of filing the petition. 6

7 Document Page 7 of Defendant owes the Estate the value of the Tractor at the time of the transfer to Defendant, which amount is $14,813.95, as a result of this fraudulent transfer. To date, neither the Tractor nor its value have been returned to the Estate. 48. Debtor received less than a reasonably equivalent value in exchange for the transaction with Defendant involving the Truck, which transfer to Defendant was fraudulent under 548(a(1(B(i-(iv and without benefit to the Estate. 49. The fraudulent transfer of the Truck was made within two years before the date of filing the petition. 50. Defendant owes the Estate the value of the Truck at the time of the transfer to Defendant and the check paid to Defendant from Debtor in the amount of $15,000.00, as a result of this fraudulent transfer. To date, neither the Truck nor its value have been returned to the Estate. WHEREFORE, Trustee prays for a judgment in favor of the Estate and against Defendant ordering Defendant Ana Franklin to return the money representing the fraudulent transfers to the Estate, plus attorneys fees, costs, interest, and damages as the Court deems just and proper. Debtor requests such other, further, or different relief to which it may be entitled. herein. COUNT THREE MONEY HAD AND RECEIVED 51. Trustee re-alleges and incorporates all the preceding paragraphs as if fully set out 52. Defendant owes the Estate $24,500.00, representing money taken from the Estate and paid to Defendant in the form of checks and unrepaid loans, all with no benefit to the Estate. 53. Defendant holds money which in equity and good conscience belongs to the Estate and has not returned said money after notice and demand. 7

8 Document Page 8 of 8 WHEREFORE, Trustee prays for a judgment in favor of the Estate and against the Defendant in the amount of $24, Trustee requests such other, further, or different relief to which Debtor may be entitled, including but not limited to attorneys fees, costs, interest, and damages as the Court deems just and proper. COUNT FOUR EQUITABLE SUBORDINATION UNDER 11 U.S.C. 510(c 54. Trustee adopts and incorporates all preceding paragraphs as if fully set forth herein. 55. Defendant has engaged in inequitable conduct by, among other things, facilitating fraudulent transfers. 56. Defendant s actions have injured other creditors of the Debtor. 57. Subordination of Defendant s debt is not inconsistent with the Bankruptcy Code. WHEREFORE, premises considered, Trustee prays for a judgment in favor of the Estate and against Defendant for an amount to be determined by the trier of fact. The Debtor requests any other relief deemed appropriate by this Court. MAPLES LAW FIRM, PC 200 Clinton Avenue West, Suite 1000 Huntsville, Alabama ( Telephone ( Facsimile smaples@mapleslawfirmpc.com DEFENDANT TO BE SERVED AT: Ana Franklin 3710 Williams Ln SE Decatur, AL /s/ Stuart M. Maples STUART M. MAPLES 8