September 6, 2018, Oklahoma –On April 1, 2016, the six PostRock Debtors commenced a bankruptcy case by filing a voluntary petition for relief under chapter 11 of the Bankruptcy Code. The Trustee brought the complaints, asserting causes of action under 11 U.S.C. §§ 547, 548 and 550 to avoid and recover certain transfers as either preferential or fraudulent transfers and under 11 U.S.C. § 502(d)&(j) to disallow claims. The Defendants argued that the Trustee’s alleged causes of action did not satisfy the “Twombly/Iqbal plausibility standard” of pleading, and thus, the Complaint should be dismissed for failure to state a claim for relief.
The Court held that the complaint muddled the two causes of action for preferential transfers and fraudulent transfers, omitted critical information, and made numerous legal conclusions without facts to support them.
The Court specifically stated that the Trustee’s complaint failed to state a plausible claim under 11 U.S.C.S. § 547(b) because the complaint primarily regurgitated the elements of § 547 but did not adequately identify the transferor, describe the allegedly antecedent debt owed, establish the particular debtor’s insolvency required by 11 U.S.C.S. § 547(b)(3), or provide sufficient facts to determine the insider status of the transferee.
The Court held that the Trustee’s complaint failed to state a plausible claim under 11 U.S.C.S. § 548 because it did not state which of the debtors allegedly made the transfers and did not meet the fraudulent transfer requirement of 11 U.S.C.S. § 548(a)(1)(B)(ii) with the insolvency alternative, because the minimal allegations of insolvency, as set forth in the complaint, were insufficient to satisfy the Twombly/Iqbal plausibility standard and there is no presumption of insolvency under § 548.
The Court dismissed the Trustee’s complaint in its entirety, but with leave to amend. The Court granted the Trustee twenty (20) days to file an amended complaint and strongly cautioned against further pleading in a conclusory fashion.
In re PostRock Energy Corp., No. 16-11230-SAH, 2018 Bankr. LEXIS 2726 (Bankr. W.D. Okla. Sep. 6, 2018