Areas Bank v.Kaplan. Situations citing this situation

III. MIKA’s obligation for MKI’s debt

Wanting to subject MIKA to obligation for MKI’s financial obligation, Regions claims «de facto merger,» «mere continuation,» and «fraud» under Florida legislation. These comparable and sometimes overlapping claims ask in place whether a brand new business replaced an adult, debt-laden company. See, e.g., Lab Corp. of Am. v. Prof’l healing system, 813 therefore. 2d 266, 270 (Fla. fifth DCA). Success on any one of these three claims entitles areas to get from MIKA the $1,505,145.93 judgment joined for areas and against MKI action.

Many times within the test, Marvin’s testimony advised a flouting of, or disregard for, the form that is corporate. Describing the motion of cash in one firm he was able to another corporation he handled, Marvin claimed: «You make the cash from a entity and you also place it for which you require it to get, either if it is from your own individual account to your LLCs or the LLCs to your account that is personal. (Tr. Trans. at 339) Marvin states when you look at the breath that is next he «trues up at the conclusion associated with the entire year,» nevertheless the documentary evidence belies the contention that Marvin «trued up» following the transfers to Kathryn and MIKA.

A. De facto merger

The Florida choices seem to need dissolution associated with very first company even in the event that business not any longer runs. For instance, Amjad Munim, M.D., P.A. v. Azar, 648 therefore. 2d 145, 153-54 (Fla. 4th DCA), generally seems to reject a de facto merger claim because «the technical element dissolution associated with predecessor business wasn’t founded,» also although the evidence advised that the very first organization «essentially ceased operations.» Although inactive, MKI continues to be in presence, which under Florida legislation defeats the de facto merger claim.

B. Mere extension

If a business simply continues another company’s business under a various title but with the exact same ownership, assets, and workers (among other products), Florida legislation subjects the successor business to obligation when it comes to previous business’s financial obligation. See, e.g., Centimark Corp. v. A to Z Coatings & Sons, Inc., 288 Fed.Appx. 610 (applying Florida legislation and collecting decisions). In this situation, Regions proved by (at least) a preponderance that MIKA simply proceeded MKI’s company under a brand new guise. Marvin handled the 2 businesses, which both run from Marvin’s individual workplace and transact the exact same company. (Doc. 162 at 36) As explained somewhere else in this purchase, MIKA received and deployed MKI’s assets, and Marvin owned both ongoing organizations through the IRA. The provided assets, workplace, management, and ownership confirm areas’ claim that MIKA amounts up to a «mere extension» of MKI under a name that is different.

Finally, Regions requests a statement that MIKA is absolutely nothing a lot more than an effort that is»fraudulent by MKI to hinder areas’ tries to fulfill the judgment action. On the basis of the testimony additionally the evidence discussed somewhere else in this order, areas proved that MIKA more likely than perhaps not amounts to an attempt that is fraudulent preclude areas’ gathering regarding the MKI judgment.

IV. Injunction

The Kaplan parties’ conduct displays a protracted pattern of evasion that demonstrates the necessity for an injunction under Section 726.108(c)(1) against another disposition by MKI or MIKA of an interest in 785 Holdings as explained throughout this order. MK Investing and MIK Advanta, LLC, should never move a pastime in 785 Holdings, LLC.

If Kathryn, MKI, MIKA, or even a Kaplan entity fraudulently transfers cash to a 3rd party, areas can buy a cash judgment contrary to the transferee, a appropriate treatment that forecloses the equitable treatment of a injunction. (Doc. 113 at 6)


At trial, Marvin blamed his accountant, their solicitors, and their IRA custodian for supposedly paperwork that is erroneous largely supports areas’ claims. The valuations that Marvin verified, often under penalty of perjury at times, Marvin faulted Advanta for the allegedly inaccurate documents and claimed that Advanta forced Marvin to create MIKA and that Advanta invented from whole cloth. Centered on Marvin’s perplexing, implausible, and testimony that is often contradictory on the basis of the contemporaneous documents, that have been authorized as soon as the Kaplan events encountered no possibility of a bad judgment for a fraudulent transfer and which mainly refute the Kaplans’ assertions, we reject the Kaplan events’ defenses and conclude that areas proved the fraudulent-transfer claims (excepting the claim on the basis of the IRA’s transfer to MIKA for the $214,711.30 and excepting the de merger that is facto in count fourteen).

The record reveals no reason to subject Marvin to liability for the Kaplan entities’ transfers or for MKI’s transfers to MIKA although Regions names Marvin as a defendant. Regions won a judgment action against MKI in addition to Kaplan entities, perhaps not against Marvin. Areas mentions purchase doubting the Kaplan events’ movement to dismiss, which purchase observes that the «predominant weight of authority holds that the plaintiff can sue the beneficiary of the self-directed IRA when it comes to IRA’s so-called wrongdoing as the self-directed IRA just isn’t an independent appropriate entity from its owner.» (Doc. 79 at 3 (interior quote omitted)) Although proper, the observation does not have application in this course of action because Regions’ concession in footnote thirteen forecloses a fraudulent-transfer claim on the basis of the IRA’s transfer of income to MIKA. The IRA owned units of MKI and MIKA, but an IRA’s ownership of an LLC provides no foundation for subjecting the IRA beneficiary to liability for a fraudulent transfer to or through the LLC. ——–

The clerk is directed to enter individually the following judgments:

(1) Judgment for areas Bank and against Kathryn Kaplan into the number of $742,543.

(2) Judgment for areas Bank and against MIK Advanta, LLC, within the level of $1,505,145.93.

After entering judgment, the clerk must shut the outcome.

BOUGHT in Tampa, Florida.