June 2, 2019, Southern District of New York – The liquidating Trustee of defunct sports and concert ticket broker National Events Holding LLC is making an effort to clawback more than $10 millions as alleged fraudulent transfers from Arizona Cardinals, online broker Ticket Network, Inc., and many others.
Last week, the Trustee Kenneth P. Silverman initiated many adversary proceedings against several defendants, alleging that former CEO Jason Nissen fraudulently paid millions to the Cardinals, TicketNetwork, Imagine Management Corp., and Primesport Inc. as part of the $70 million Ponzi scheme for which he pled guilty in March 2018.
According to the complaints filed by the Trustee, the Debtor’s CEO Jason Nissen was arrested and charged by the Federal Bureau of Investigation with allegedly defrauding victims of at least $70 million through a Ponzi scheme. Nissen represented to victims that he would use money lent to him and to the Debtors to purchase bulk quantities of premium tickets to sporting and entertainment events even though Nissen and the Debtors used that money in large part to repay other victims and to enrich Nissen. The complaints further state that Nissen presented to his victims falsified financial documents and inflated accounts receivable ledgers as purported proof that their money was being used to purchase tickets for resale.
As the Debtors’ repayment obligations on financing arrangements with the funding parties became unsustainable, the Debtors began to satisfy those obligations by fraudulently diverting funds received as new investments (intended to purchase tickets) to satisfy antecedent debts.
In its complaints, the Trustee had alleged that the payments were made to the defendants when the Debtors were insolvent and were made with the actual intent to hinder, delay or defraud the Debtor’s creditors and constituted fraudulent conveyances in violation of New York Debtor and Creditor Law §273 and §274. The Trustee has also contended that the transfers to various defendants were impermissible transfers of the Debtor’s interest in the property. As a result, the defendants were the ultimate beneficiaries of the Debtor’s transfers under circumstances in which defendants would be unjustly enriched if they were to retain such transfers since the Debtor did not receive reasonably equivalent value for such transfers.
Honorable Justice Judge James L. Garrity Jr. is presiding over the Debtor’s bankruptcy case. The case number is 17-11556, In re National Events Holdings, LLC, et al. in United States Bankruptcy Court for Southern District of New York.