Zazzali, as trustee for the DBSI Estate Litigation Trust, and to Conrad Myers, as trustee for the DBSI Liquidating Trust. The 115-page, 747-paragraph Complaint contains 10 counts asserting causes of action against one or more of the Individual Defendants: Counts 1-6 of the Complaint seek to recover allegedly fraudulent conveyances from the Individual Defendants; Count 14 alleges David Arnold breached his personal guaranty to Stellar Technologies LLC; Count 15 alleges breach of fiduciary duties; Count 16 alleges unjust enrichment; and Count 17 alleges breach of the Wavetronix Operating Agreement. As that Confirmation Order sets forth in greater detail, DBSI, Inc. # 5924, ¶ 27.) The DBSI enterprise was involved in three main spheres of business activity: (i) the syndication and sale to investors of tenant-in-common ("TIC") interests in real estate, (ii) the purchase of real estate, and (iii) investment in technology companies. ¶ 25.) This adversary proceeding concerns this third sphere of activity, which the Complaint describes as involving "a very large and completely unproductive investment of money into emerging technology-oriented companies." (Doc. Exhibit A to the Complaint lists the subject transfers as all being made by DRR to Wavetronix. #1.) Exhibit A does not list any transfers to the Individual Defendants. As such, Arnold is a proper party from whom to recover under 11 U. Trustees seem to imply that the transfers passed through Wavetronix and into Arnold's pocket. ¶ 550(a) because Arnold was a manager, president, CEO, and co-founder of Wavetronixis likewise unavailing. Trustees, however, have identified no factual allegations in the Complaint supporting this theory.
This opinion is with respect to the motion to dismiss the Complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). #12.) The movants are defendants David Arnold, Linda Arnold, and Michael Jensen (the "Individual Defendants"). Zazzali and Conrad Myers, as Trustees of the DBSI Estate Litigation Trust and DBSI Liquidating Trust, respectively, (together, "Trustees"), against Wavetronix LLC and the Individual Defendants, as well as unknown individuals and entities denominated John Does 1-50 and ABC Entities 1-50. A plan of liquidation was confirmed on October 26, 2010, resulting in the appointment of Trustees to administer the DBSI Litigation Trust and DBSI Estate Liquidation Trust. In addition, Arnold, as manager, president, CEO, and co-founder effectively controlled Wavetronix. Trustees have pointed to no other provision in the Complaint as providing factual bases that Arnold received any of allegedly fraudulent transfers. The only way to interpret Trustees' contention that Arnold is a proper party based on his control over Wavetronix is that the transfers were made for Arnold's benefit.
The Court also held that, in the absence of such continuous and systematic contacts between the Merrill Lynch Defendants and the United States, there also was no basis to assert jurisdiction for discovery purposes.
For these reasons, the Court dismissed the complaint.
court jurisdiction would not raise specter of unending, post-confirmation jurisdiction) (quoting Astro Power, 335 B. In many smaller or mid- sized cases it may make sense to dispense with the liquidating trust and simply change the name of the debtor and finish the liquidation through use of the debtor and the Bankruptcy Court.