Federal court documents obtained by Action Alameda News show that in late October of this year, SunCal CEO Bruce Eileff, SunCal master entities SCC Acquisitions Inc. and SCC Acquisitions LLC, and others were the targets of a lawsuit by a bankruptcy trustee, who claimed that the defendants fraudulently disbursed $144 million lent to them.
Alfred H. Siegel is the Chapter 11 trustee for a number of bankrupt Lehman Brothers entities, and filed the claim in U.S. District Court in Southern California on behalf of the estate LBREP/L SunCal Master I LLC and the estates for bankrupt SunCal projects called McAllister Ranch LLC, McSweeney Farms LLC and Summerwind Ranch LLC. These three project entities are referred to in the case as the “operating subsidies.”
In the complaint, case number CV10-8191 GHK (VBKx), Siegel’s attorneys make several allegations, including Unlawful Distribution, Breach of Fiduciary Duty, Unjust Enrichment and aiding and abetting a conspiracy.
Siegel claims that the Lehman/SunCal Master entity transferred, in 2006, $144 million to the operating subsidies, “ostensibly to assemble additional acreage for, and to develop,” the real estate projects and that the master entity and operating subsidies “received little or no consideration for this transfer of funds and the transfer left the Debtors insolvent and without sufficient assets or operating capital to conduct their business.” The trustee is seeking the return of the $144 million plus damages for the defendants’ breach of fiduciary duty in authorizing the transfer.
The $144 million was part of a total of $320 million in debt that the Lehman/SunCal Master entity borrowed from Lehman Commercial Paper, Inc. in January of 2006. The claim alleges that the $144 million was an “equity distribution” that was “immediately paid to defendants” and that the Lehman/SunCal Master entity “did not enjoy the benefit of the $144 million distribution for which they all were liable, nor did they receive any value whatsoever on account of the transfer of the $144 million distribution to defendants.”
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Action Alameda’s story on the latest and perhaps largest money damages claim against the SunCal mother ship and its owner is far more enlightening than the brief mention of the lawsuit in the Wall Street Journal about the latest in SunCal’s travails:
http://online.wsj.com/article/SB10001424052970203731004576045844023867816.html
[...] of SCC’s and Elieff’s vaunted millions have been hidden. SCC and Elieff have now been sued for another $144 Million by a bankruptcy trustee. As a result, were they to show up in Alameda and claim to the new City Council that they are [...]