Eon Mist, LLC – Preference and Fraudulent Transfer Defense Lawyer

On February 3, 2023, Plaintiff George L. Miller, as chapter 7 trustee for the estate of debtor, Eon Mist, LLC filed 21 complaints, opening adversary proceedings, seeking: (1) to avoid and recover certain alleged transfers to insiders of the Debtor as preferential under Section 547 and/or fraudulent under Section 548 of the Bankruptcy Code, (2) to disallow the claim(s) held by individual defendants, and (3) to disregard the legal form of and pierce the corporate veil of Insider Defendants.

Plaintiff alleges that the Debtor maintained relationships with certain entities that were formed or controlled by the Debtor’s Former Management, including Insider Defendants.

Plaintiff further alleges that prior to the Preference Period, but during the two (2) year period immediately preceding the Petition Date, the Debtor made additional transfers of an interest of the Debtor’s property to or for the benefit of Insider Defendants.

The bankruptcy case and these adversary actions are before the Honorable Judge Mary F. Walrath.

Procedural History:

On June 8, 2021, one of the Debtor’s alleged creditors, DS Containers, Inc., filed an involuntary petition for relief under chapter 7 of the Bankruptcy Code against the Debtor. The Debtor moved to dismiss the Petition, but following an evidentiary trial on August 18, 2021, the Court denied the motion and entered the order for relief on August 20, 2021.

Also on August 20, 2021, the Office of the United States Trustee appointed Plaintiff George L. Miller to serve as the interim chapter 7 trustee for the Debtor’s bankruptcy estate pursuant to section 701(a) of the Bankruptcy Code.

On November 19, 2021, the Trustee commenced an adversary proceeding styled Miller v. PPE Solutions USA LLC (In re Eon Mist, LLC), Adv. Proc. No. 21-51267 (MFW), by filing a complaint against PPE seeking to avoid $952,800.66 of allegedly preferential and fraudulent transfers conveyed thereto. In addition, on December 9, 2021, the Trustee commenced an adversary proceeding styled Miller v. Hurst Capital, LLLP, Adv. Proc. No. 21-51306 (MFW), by filing a complaint against Hurst Capital seeking to avoid $592,973.75 of allegedly preferential and fraudulent transfers conveyed thereto. Default judgment was entered against Insider Defendants, but the Trustee later learned that some of the transfers at issue in that matter ultimately passed through Insider Defendants en route to the individual defendants sued on February 3, 2023.

Background, as alleged by Plaintiff:

“[S]ince the inception of the Debtor’s business in March 2020, the Debtor produced travel-sized disinfectant spray, a product that allegedly grew to be in high demand as a result of the ongoing COVID-19 pandemic.”

Common Defenses in Preference Actions

The United States Bankruptcy Code provides many affirmative defenses to preference actions, contained within Section 547(c). For example, the most common defenses that may be available to a Defendant under Section 547(c) may include:

• the transfer was a contemporaneous exchange for new value given to the debtor (i.e., the debtor received something of value in exchange for the transfer); 11 U.S.C. §547(c)(1);
• after such transfer, Defendant gave new value to or for the benefit of the debtor (i.e., the Defendant extended additional credit to the Debtor after receiving the transfer) 11 U.S.C. §547(c)(4); or
• the transfer was in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the recipient (i.e., Defendant made the transfer under ordinary business terms). 11 U.S.C. §547(c)(2).

For more information, see our page on Preference Defense Litigation: http://www.tobialaw.com/practice-areas/delaware-preference-defense-lawyer/

The following Adversary Proceedings were filed in the bankruptcy of Eon Mist, LLC.

On February 3, 2023:
23-50086-MFW Miller v. Audemars Piguet North America Inc. et al.
23-50087-MFW Miller v. Nicholas Lippman et al.
23-50088-MFW Miller v. Sakshi Khurana et al.
23-50089-MFW Miller v. Zaki Dean et al.
23-50090-MFW Miller v. Adrian Voo et al.
23-50091-MFW Miller v. LBMG 20-00004 Trust et al.
23-50092-MFW Miller v. GVB Medical LLC et al.
23-50093-MFW Miller v. In The Know Travel, LLC et al.
23-50094-MFW Miller v. Milica Jelisavcic et al.
23-50095-MFW Miller v. Dillon Gage Inc. of Dallas et al.
23-50096-MFW Miller v. Acuantia Inc. Depository et al.
23-50097-MFW Miller v. Material Systems Inc. et al.
23-50098-MFW Miller v. Beyazitpack Makine et al.23-50099-MFW Miller v. Genimex Group et al.
23-50100-MFW Miller v. Adam Fogelman et al.
23-50101-MFW Miller v. Great Western Air LLC et al.
23-50102-MFW Miller v. LA Restaurant Group LLC et al.
23-50103-MFW Miller v. Steele T. Williams et al.
23-50104-MFW Miller v. Squadra Films LLC et al.
23-50105-MFW Miller v. Michael E. Walsh et al.
23-50106-MFW Miller v. Colfin 19-00002H Industrial Owner, LLC et al.23-50118-MFW Miller v. Eon Brands LLC et al.

On June 7, 2023:
23-50399-MFW Miller v. Averitt Express, Inc.
23-50400-MFW Miller v. ClassicPlan Premium Financing, Inc.
23-50401-MFW Miller v. DHL Express (USA), Inc.

If you conducted business with Eon Mist, LLC and especially if you have received a demand letter, or if a complaint has been filed against you or your business, even if not served yet, contact us here, email us at info@tobialaw.com or call the firm’s Wilmington offices directlyat (302) 655-5303 to schedule an initial consultation. We can discuss the situation you are facing and share with you our initial observations at no charge to you.