Tousa committee finds new targets for fraud suits

The creditors' committee for Hollywood home builder Tousa is taking aim at another group of defendants in their so-far successful lawsuits stemming from claims that a bail out and refinancing in mid-2007 of a joint venture in Transeastern Properties resulted in fraudulent transfers.

The committee already won judgment against secured lenders on claims that loans made six months before the Chapter 11 filing were fraudulent transfers. The bankruptcy judge required the lenders to post a total of $700 million in appeal bonds to stay enforcement of his October ruling that the transactions were voidable in bankruptcy.

The committee, in papers filed last week, wants authority from the bankruptcy court to sue another group of defendants to recover an additional $60 million in payments made during the Transeastern bailout.

The committee, if permitted, will sue for $50 million from Arthur and Edward Falcone, who were owners of the company that was Tousa's joint venturer in buying Transeastern in 2005. The committee says money given the Falcones and their companies in mid-2007 were fraudulent transfers.

The committee also wants the right to sue Kendall Land Development LLP, which also received payments as part of the settlement in mid-2007 regarding Transeastern.

Tousa filed for bankruptcy reorganization in January 2008. The company listed assets of $2.1 billion against debt totaling $2 billion. At the outset of the reorganization it was 67 percent-owned by Technical Olympic SA.