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`Case No. 11-11388 (JLG)
`Chapter 11
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`Adv. Proc. No. 11-2251 (JLG)
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`UNITED STATES BANKRUPTCY COURT
`SOUTHERN DISTRICT OF NEW YORK
` --------------------------------------------------------- x
` :
`In re:
` :
`
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`Big Apple Volkswagen, LLC,
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`Debtor
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` :
` --------------------------------------------------------- x
`Alan Nisselson, Chapter 7 Trustee of Big
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`Apple Volkswagen, LLC,
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` :
`
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`v.
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`Ratiba Salim and Wahid Saleem,
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`Defendants
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` --------------------------------------------------------- x
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`Plaintiff
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`MEMORANDUM DECISION AND PROPOSED FINDINGS OF FACT AND
`CONCLUSIONS OF LAW TO GRANT IN PART AND DENY IN PART PLAINTIFF’S
`MOTION FOR PARTIAL SUMMARY JUDGMENT
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`A P P E A R A N C E S :
`WINDELS MARX LAND & MITTENDORF, LLP
`Attorneys for Plaintiff Alan Nisselson, Trustee
`156 West 56th Street
`New York, New York 10019
`By: Alan Nisselson, Esq.
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`John J. Tepedino, Esq.
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`DAHIYA LAW OFFICES LLC
`Attorneys for Defendants Ratiba Salim and Wahid Saleem
`75 Maiden Lane, Suite 506
`New York, New York 10038
`By: Karamvir Dahiya, Esq.
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`1
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`JAMES L. GARRITY, JR.
`U.S. BANKRUPTCY JUDGE
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`Before the Court is Plaintiff Alan Nisselson’s Motion for Partial Summary Judgment [AP
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`ECF Doc. Nos. 39, 40, 41, and 60, collectively]1 (the “Motion”)2 on his June 14, 2011 complaint
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`[AP ECF Doc. No. 1] (the “Complaint”)3 against defendants Ratiba Salim (“Ratiba”) and
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`Wahid Saleem (“Wahid”) (collectively, the “Defendants”). Mr. Nisselson is the court-
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`appointed chapter 7 trustee (the “Trustee”) for the estate of Big Apple Volkswagen, LLC (“Big
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`Apple” or the “Debtor”). In the Complaint, the Trustee seeks to avoid and recover as fraudulent
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`and preferential under federal and state law Debtor’s prepetition transfer of estate funds to
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`Ratiba, and her subsequent transfer of real property located at 8529 65th Road, Rego Park, New
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`York titled in her name, and that had been freed of a mortgage using some of the Debtor’s funds
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`transferred to Ratiba (the “Premises”), to her husband, Wahid.4
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`1 Citations to “ECF Doc. No. __” or to AP ECF Doc. No. __” refer to the location that the referenced document can
`be found on the Court’s electronic case filing dockets for this case and adversary proceeding, respectively. Citations
`to “12 Civ. Dkt. No. _” refer to the location that the referenced document is in 12 Civ. 92 (PGG) and “15 Civ. Dkt.
`No. _” refer to the location that the referenced document is in 15 Civ. 4629 (PGG), as applicable, both as
`commenced in the United States District Court for the Southern District of New York.
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` 2
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` The Motion is comprised of the (i) Motion for Summary Judgment (Partial), including the Affidavit of Alan
`Nisselson in Support of Motion for Partial Summary Judgment, and exhibits thereto [collectively, AP ECF Doc. No.
`39 through 39-26] (the “T. Aff.”), Local Bankruptcy Rule 7056-1 Statement of Material and Undisputed Facts [AP
`ECF Doc. No. 40] (the “7056-1 Statement”); Memorandum of Law in Support of the Motion [AP ECF Doc. No. 41]
`(the “T. Memo.”); and Reply Memorandum of Law in Further Support of Plaintiff’s Motion for Partial Summary
`Judgment [AP ECF Doc. No. 60] (the “Reply”).
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`3 When citing to the Complaint, the notation “Compl. ¶ __” refers to paragraphs in the Complaint.
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` 4
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` See T. Memo. 1. In the Complaint, among other things, the Trustee alleges that he is entitled to a judgment
`against Wahid (i) avoiding and preserving the Subsequent Transfer, (ii) directing that the Subsequent Transfer be set
`aside, and (iii) recovering the Subsequent Transfer or the value thereof from Wahid for the estate’s benefit. Compl.
`¶ 65. For these purposes, the term “Subsequent Transfer” means “Ratiba Salim’s subsequent transfer to Defendant
`Wahid Saleem of property freed from a mortgage obligation through use of the Debtor’s funds.” Compl. ¶ 2. The
`“property” referenced in the definition of “Subsequent Transfer” is the Premises. Compl. ¶¶ 14-15.
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`Only the first of the Complaint’s nine claims for relief is relevant to the Motion.5 There
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`the Trustee is seeking to avoid and recover payments made by the Debtor to Ratiba as
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`preferential transfers under the Bankruptcy Code (the “Code”). The gravamen of the Motion is
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`that prepetition, Julian Salim (“Julian”), Big Apple’s former managing member and majority
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`owner, caused the Debtor to make two transfers aggregating $705,000 (the “Transfers”) to an
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`account at the Queens County Savings Bank bearing Ratiba’s name and the address of the
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`Premises (the “Bank Account”), in satisfaction of debts then due and owing to her by the Debtor
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`totaling no less than $675,000. Ratiba is Julian’s mother. A portion of that indebtedness
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`consisted of a $300,000 loan that Ratiba made to Julian and the Debtor in 2006. Ratiba financed
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`that loan by taking out a $300,000 mortgage (the “Mortgage”) on the Premises. The Trustee
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`seeks a judgment pursuant to §§ 547, 550 and 551 of the Code (i) avoiding the Transfers and
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`preserving them for the benefit of Debtor’s estate; (ii) directing that the Transfers be set aside;
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`and (iii) recovering the Transfers, or the value thereof, from Ratiba for the benefit of the
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`Debtor’s estate. To the extent that the Transfers are avoided, the Motion also seeks a judgment
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`avoiding Ratiba’s conveyance of the Premises to Wahid, her husband and Julian’s father, as a
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`subsequent transferee of the value of a portion of the avoided Transfers. It is undisputed that
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`before Ratiba conveyed the Premises to Wahid, approximately $335,000 from the Transfers was
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`paid to a third party mortgagee (the “Mortgagee”), for Ratiba’s benefit, to satisfy the Mortgage.
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`5 See Notice of Trustee’s Motion Pursuant to Bankruptcy Rule 7056 and Rule 56 of the Federal Rules of Civil
`Procedure for Partial Summary Judgment on his First Claim for Relief for Avoidance and Recovery of Preferential
`Transfers as Set Forth in Complaint Against Ratiba Salim and Waheed Salim [AP ECF Doc. No. 39] (stating that
`Trustee seeks “partial summary judgment on his first claim for relief for avoidance and recovery of preferential
`transfers as set forth in his complaint against Defendants Ratiba Salim and Waheed Salim“).
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`The Motion was previously before the Court on March 11, 2014 (the “March 2014
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`Hearing”). Defendants did not respond to the Motion,6 but their counsel participated at that
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`hearing.7 Counsel advised the Court that Defendants did not oppose the Motion and that they
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`acknowledged that the Transfers were preferential payments, but that they denied liability for the
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`Transfers because they allegedly had no control over the Bank Account. Counsel objected on the
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`record to the entry of any order holding Defendants liable for the Transfers.8 On March 12,
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`2014, the Court9 issued a memorandum decision granting the Motion, and on March 20, 2015,
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`the Court entered an order granting the Trustee summary judgment on the First and Eighth
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`Claims for Relief in the Complaint. See Nisselson v. Salim, Adv. Proc. No.11-2251 (RG), Mar.
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`12, 2014 Mem. Decision [AP ECF Doc. No. 45] (the “Decision”); March 20, 2014 Order
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`Granting the Motion [AP ECF Doc. No. 46] (the “Order”). On June 26, 2014, the Court entered
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`final judgment with respect to the First and Eighth Claims for Relief in favor of the Trustee on
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`6 Defendants had ample opportunity to respond to the Motion. By Stipulation and Order Regarding Briefing
`Schedule “so ordered” by the Court on February 19, 2014 [AP ECF Doc. No. 44], the Defendants were granted an
`additional eleven days to file a brief in opposition to the Motion, but failed to do so.
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`7The record of the March 2014 Hearing reflects that Defendants were represented at that hearing by Navpreet Kaur
`of the Kadochnikov Law Group, who appeared at the hearing on behalf of Defendants’ then counsel of record, Lust
`& Leonov. See Transcript of March 2014 Hearing (“March 2014 Tr.”) [AP ECF No. 68] at 1:18-21 and 2:7-10.
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`8 Ms. Kaur advised the Court that “[Defendants] have no opposition to the motion. It’s clear. The Defendants
`believe that there is no argument that the funds were put in Mr. and Mrs. Salim’s account.” March 2014 Tr. at 2:17-
`19. See also Id. at 4:12 – 15 (Ms. Kaur conceding that transfer of funds to the Bank Account constituted preferential
`payments). However, Ms. Kaur was clear that Defendants denied that they were liable for the Transfers “[b]ecause
`from the depositions it seems as if Defendants had no control over the accounts . . . .” See, e.g., Id. at 2:21-22.
`Accordingly, she advised the Court that she was appearing at the hearing only “to make sure that certain language is
`not used in the order [granting summary judgment]” because “[Defendants’ counsel of record] wants . . . language in
`[the order] to make sure there’s no liability issues [as to Ratiba and Wahid].” Id. at 2:16-21.
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` 9
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` When the Debtor filed this case, it was assigned to the Honorable James M. Peck. After Judge Peck’s retirement
`effective January 31, 2014, the case was temporarily assigned to the Honorable Robert E. Grossman, sitting by
`designation in the United States Bankruptcy Court for the Southern District of New York pursuant to an order
`signed by the Honorable Robert A. Katzmann, Chief Circuit Court Judge for the Second Circuit Court of Appeals.
`Judge Grossman presided over this adversary proceeding until it was reassigned to Judge Garrity on February 18,
`2015.
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`behalf of the Debtor’s estate, against Ratiba and Wahid, jointly and severally, in the sum of
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`$705,000. See Judgment in Favor of Trustee [AP ECF Doc. No. 50] (the "Judgment").
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`This matter is back before the Court because by order dated July 8, 2015, the District
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`Court (Gardephe, J.) granted Defendants’ petition for a writ of mandamus and directed this Court
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`to (i) vacate the Decision; (ii) vacate the Judgment; and (iii) issue proposed findings of fact and
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`conclusions of law with regard to the avoidance claims. See Salim, et al. v. Nisselson, et al., 15
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`Civ. 4629 (PGG) July 8, 2015 Order [15 Civ. Dkt. No. 20] (the “July 2015 Order”) at *9. The
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`District Court found that this Court exceeded its constitutional authority in entering the
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`Judgment. Furthermore, it determined that this Court had disregarded the District Court’s
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`directive in its March 25, 2013 Memorandum Opinion and Order (the “March 2013 Order”)10
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`denying Defendants’ motion to withdraw the reference of the Complaint from the Bankruptcy
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`Court to the District Court (the “Reference Motion”), that it not enter a final judgment on the
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`claims in the Complaint but instead, issue proposed findings of fact and conclusions of law for
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`review by the District Court. Id.
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`This Court complied with the District Court’s order and vacated the Decision and
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`Judgment. See Order Vacating (I) Entry of Summary Judgment, And (II) Entry of Final
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`Judgment [AP ECF Doc. No. 55]. On December 14, 2015, after receiving additional
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`submissions from the parties,11 the Court heard additional argument on the Motion. For the
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`10 See Nisselson v. Salim, 2013 WL 1245548, at *5 (S.D.N.Y. Mar. 25, 2013) [12 Civ. Dkt. No. 19].
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`11 At an October 20, 2015 conference with the parties, this Court granted Defendants’ request for leave to
`supplement the summary judgment record with a memorandum of law addressing (i) issues related to avoidability of
`transfers and in rem and/or in personam liabilities for an avoided transfer under Bankruptcy Code §550 and (ii) the
`issue of whether Defendants are secured creditors of the Debtor. The Court also granted the Trustee the opportunity
`to file a reply memorandum of law, if he elected to do so. See Scheduling Order, dated October 28, 2015 [AP ECF
`Doc. No. 57]. The Defendants timely filed their Objections By Defendants to Summary Judgement (the
`“Objection”) including affidavits from Wahid (the “Wahid Affidavit”) and Ratiba (the “Ratiba Affidavit”) [AP
`ECF Doc. No. 58] and the Trustee timely filed his Reply, respectively.
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`reasons stated below, the Court files these proposed findings of fact and conclusions of law,
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`recommending that the District Court grant judgment to the Trustee against Ratiba on his First
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`Claim for Relief (the “First Claim”), pursuant to §§ 547(b), 550(a) and 551 of the Code (i)
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`avoiding and preserving the Transfers for the benefit of Big Apple’s estate; (ii) directing the
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`Transfers to be set aside; and (iii) recovering the Transfers or value thereof from Ratiba. The
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`Court does not recommend entering judgment against Wahid, as he is not party to the First Claim
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`for Relief. In any event, the Trustee has not established on summary judgment that he is an
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`immediate or mediate transferee of the Transfers and, thus, liable to the Trustee for those
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`transfers, or the value thereof, under § 550(a)(2) of the Code. Accordingly, the Court
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`recommends that the District Court deny the Trustee’s request for summary judgment against
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`Wahid on his First Claim for Relief.
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`Background12
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`On March 30, 2011 (the “Petition Date”), the Debtor filed a voluntary petition for relief
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`under chapter 11 of the Code in this Court. See Debtor’s Voluntary Petition for Relief Under
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`Chapter 11 [ECF Doc. No. 1] (the “Petition”). As of the Petition Date, the Debtor owned and
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`operated a Volkswagen dealership and repair business pursuant to a franchise agreement with
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`Volkswagen of America, Inc. Julian was the managing member and 54% equity owner of the
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`Debtor. 7056-1 Statement ¶ 2; see also Petition, p. 9, Affidavit Pursuant to Local Bankruptcy
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`Rule 1007-2, ¶ 2.
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`Debtor remained in possession and control of its business and assets as a debtor in
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`possession until May 12, 2011, when, on the motion of secured creditor VW Credit, Inc. (“VW
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`12 The underlying facts are not in dispute and many are set forth in the 7056-1 Statement. Defendants did not
`contest the facts in that statement. As such, those facts are deemed admitted. See LBR 7056-1(d); see also LCR
`56.1(c).
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`Credit”) for the appointment of a chapter 11 trustee, the Court directed the appointment of Alan
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`Nisselson as trustee for the chapter 11 estate. 7056-1 Statement ¶ 2; Trustee Aff. Ex. B (Order
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`Appointing Chapter 11 Trustee [ECF Doc. No. 61]). Upon the motion of the Trustee, by order
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`dated December 21, 2011, the Court converted the Debtor’s case to a case under chapter 7 of the
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`Code. 7056-1 Statement ¶ 3. Thereafter, the Trustee was appointed interim Chapter 7 trustee
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`and is now qualified and serving as permanent trustee. See Trustee Aff. Ex. C. (Order
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`Converting the Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code and Granting
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`Other Related Relief. [ECF Doc. No. 147]).
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`This litigation arises out of prepetition transactions among Julian, his mother, and the
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`Debtor. Pursuant to a letter agreement among them, effective June 1, 2006, Ratiba loaned Julian
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`and the Debtor $300,000 ‘to invest in purchasing Big Apple VW LLC.” See T. Aff. Ex. R
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`(Letter [AP ECF Doc. No. 39-19]) (the “Letter Agreement”). To finance her loan to the
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`Debtor, Ratiba took out a $300,000 mortgage on the Premises. See T. Aff. Ex. Q (Ratiba Salim
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`Deposition Tr.) at 16:4-20:22. The Letter Agreement calls for the loan to be repaid no later than
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`April 2011. Id. That agreement also obligates the Debtor and Julian to pay Ratiba the sum of
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`$75,000/year for five years from the Debtor’s “yearly profit as promised as a share to Ratiba
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`Salim for giving Julian and Big Apple VW the loan.” Id. In total, the Letter Agreement
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`provides for payments to Ratiba from the Debtor and Julian of $675,000 over the five year
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`period. Id. The agreement does not grant, or purport to grant, Ratiba an interest in any of the
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`Debtor’s property as security for Debtor’s obligations under the agreement. Id.
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`During the period of June 2006 – February 2011, the Debtor made no payments to Ratiba
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`on account of the amounts due and owing to her under the Letter Agreement. See T. Aff. Ex. N.
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`(Julian Salim Deposition Tr.) at 33:22 - 34:12 (Julian confirming that prior to the Transfers,
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`Ratiba was not paid anything on account of the promised $375,000 in profits.). However, on
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`March 16, 2011, the Debtor made the Transfers to Ratiba in full satisfaction of its indebtedness
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`to her. Id. at 96:8-13 (Julian testified that the Transfers were made in March 2011 because “it
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`was approaching the five-year agreement that we had with [Ratiba].”) Specifically, that day, the
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`Debtor wired $495,000 from its bank account (the “Debtor’s Account”) to the Bank Account.
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`7056-1 Statement ¶ 6. In addition, on that same day a cashier’s check drawn on the Debtor’s
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`Account in the sum of $210,000 was deposited into the Bank Account. 7056-1 Statement ¶ 7.
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`On March 17, 2011, the sum of $335,160.10 was transferred from the Bank Account to
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`the Mortgagee in full satisfaction of the Mortgage.13 See T. Aff. Ex. V (Satisfaction of Mortgage
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`dated March 23, 2011, and recorded with the Office of the City Register of the City of New York
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`on April 5, 2011). See also T. Aff. Ex. N. (Julian’s Deposition Transcript) at 75:14-22 (Julian
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`testified that the money that was used to satisfy the mortgage on the Premises was from the same
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`money transferred to the Bank Account from Big Apple.)
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`On May 5, 2011, Ratiba transferred title to the Premises – now debt free -- to Wahid.
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`7056-1 Statement Sec. H. Although the deed recites that the transfer was made “[i]n
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`consideration of Ten Dollars ($10.00) and other good and valuable consideration,” see Trustee
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`Aff. Ex. W, there is no evidence in the record that any consideration was paid on account of the
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`transfer.14
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`13 Specifically, the $335,160.10 payment was made from the Bank Account referencing “BENEFICIARY
`RATIBA SALIM 8529 65TH RD REGO PARK NY 11374 [i.e. the Premises]” and “DETAILS ,ATTN PAYOFF
`DEPT. (sic)”. T. Aff. Ex. M (Account Statement, AP ECF Doc. No. 39-14).
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`14 By Plaintiff’s First Requests for Production of Documents, dated November 22, 2011, and directed to Ratiba and
`Wahid, the Trustee sought “[a]ll Documents concerning the transfer of title to the [Premises] from Defendant Ratiba
`Salim to Defendant Wahid Saleem.” 7056-1 Statement Sec. H; see also, T. Aff. Ex. Y, p. 6 ¶ 9. No party has
`provided substantiation of any consideration to the Trustee in response to the Document Demand or otherwise. See
`T. Aff. ¶ 71.
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`On June 14, 2011, the Trustee brought this adversary proceeding under (i) 11 U.S.C. §§
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`544(b), 547(b), 548(a), 550(a) and 551; and (ii) the NEW YORK DEBTOR AND CREDITOR LAW §§
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`273-276, 278 and/or 279 against Ratiba and Wahid. Compl. ¶ 3. The Complaint includes nine
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`claims for relief. In Claims for Relief One through Seven, the Trustee seeks to avoid the
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`Transfers and recover them from Ratiba under federal preference and state and federal fraudulent
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`transfer laws.15 In the Eighth Claim for Relief (“Claim Eight”), the Trustee seeks to avoid
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`Ratiba’s transfer of the Premises to Wahid as a fraudulent transfer under state and federal law.
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`In the Ninth Claim for Relief, the Trustee sought attachment of the Premises pursuant to Article
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`62 of the NEW YORK CIVIL PROCEDURE LAW AND RULES and Rule 64 of the FEDERAL RULES OF
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`CIVIL PROCEDURE. By Order of Attachment dated June 29, 2011, the Court granted the Trustee’s
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`ex parte application to attach the Premises [AP ECF Doc. No. 5], and by Order Confirming
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`Order of Attachment dated September 15, 2011, the Court confirmed that attachment order. See
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`[AP ECF Doc. No. 11].
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`In support of the First Claim, the Trustee alleges that within one year of the
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`commencement of the case, the Debtor made the Transfers to Ratiba, an insider of the Debtor, on
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`account of a debt then due and owing to her. Compl. ¶¶ 9-22.16 The Trustee further alleges that
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`the Transfers were made when the Debtor was insolvent and that they enabled Ratiba to recover
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`15 In the Second and Third Claims for Relief, the Trustee seeks to avoid and recover the Transfers from Ratiba as a
`fraudulent and constructively fraudulent transfer under §§ 548(a)(1)(A) and (B), respectively. In the Fourth Claim
`for Relief, the Trustee seeks to avoid and recover the Transfers from Ratiba as a fraudulent transfer under New York
`Debtor and Creditor Law §§ 273, 278 and/or 279, and Bankruptcy Code §§ 544(b), 550(a) and 551. In the Fifth
`Claim for Relief, the Trustee seeks to avoid and recover the Transfers from Ratiba as a fraudulent transfer under
`New York Debtor and Creditor Law §§ 274, 278 and/or 279, and Bankruptcy Code §§ 544(b), 550(a) and 551. In
`the Sixth Claim for Relief, the Trustee seeks to avoid and recover the Transfers as a fraudulent transfer under New
`York Debtor and Creditor Law §§ 275, 278 and/or 279, and Bankruptcy Code §§ 544(b), 550(a) and 551. In the
`Seventh Claim for Relief, the Trustee seeks to avoid and recover the Transfers as a fraudulent transfer under New
`York Debtor and Creditor Law §§ 276, 278 and/or 279, and Bankruptcy Code §§ 544(b), 550(a) and 551.
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`16 The Complaint alleged that the transfers to Ratiba totaled $718,000. Compl. ¶ 1. However, through the Motion
`the Trustee seeks judgment with regard to transfers of no less than $705,000. See 7056-1 Statement, ¶ 9; T. Aff. ¶
`38.
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`more than she would from a distribution to creditors in this case had the Transfers not been
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`made. Compl. ¶¶ 23-24. The Trustee contends that pursuant to §§ 547(b), 550(a) and 551 of the
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`Code, he is entitled to a judgment against Ratiba: (i) avoiding and preserving the Transfers; (ii)
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`directing that the Transfers be set aside, and (iii) recovering the Transfers, or the value thereof,
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`from Ratiba for the benefit of the estate. Compl. ¶ 25.
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`The Summary Judgment Motion
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`The Trustee contends that he is entitled to summary judgment on the First Claim avoiding
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`and preserving the Transfers for the benefit of the Debtor’s estate as preferences under §§ 547(b)
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`and 551 of the Code. See T. Memo. 1, 5. He asserts that once those transfers are avoided, under
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`§ 550(a), he can recover the value of the Transfers from Ratiba as the initial transferee of the
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`Transfers, and the Subsequent Transfer from Wahid, as the immediate transferee of Ratiba, the
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`initial transferee. Id. 15-17. The Trustee asserts that the matter is ripe for summary judgment
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`because there are no material facts in dispute and that as a matter of law he is entitled to the relief
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`he is seeking under §§ 547, 550 and 551 of the Code. Id. 17-18.
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`The Defendants oppose the Motion. They contend that this Court lacks the power to
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`issue proposed findings of fact and conclusions of law in respect of the Motion because only an
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`Article III court can adjudicate the merits of the Motion and they are entitled to a jury trial on the
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`issues underlying the Complaint. Obj. 1-4. They also contend that in filing the Objection, they
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`have not waived their right to have the Motion adjudicated by an Article III court. Obj. 1, n.1.
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`They also contest the merits of the Motion. They contend that the Trustee has failed to state a
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`prima facie case for relief under either § 547(b) or § 550(a) of the Bankruptcy Code. They assert
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`that the facts show that at the time of the Transfers, the Debtor was solvent and that Ratiba was a
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`secured creditor of the Debtors. Obj. 4-5. Thus, they argue that the Trustee cannot satisfy §§
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`547(b)(3) and 547(b)(5) of the Code.17 Further, they maintain that because Ratiba had no
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`knowledge of the Transfers and did not control the Bank Account, the Transfers are not
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`avoidable under § 547. They also contend that even if the Trustee establishes that the Transfers
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`are avoidable as preferential transfers, he cannot recover them from Ratiba because she is not an
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`“initial transferee” of the Transfers under § 550 of the Code, but rather is either a good faith
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`“subsequent transferee” or a mere conduit of the Transfers.18 Obj. 5-9. Finally, they contend
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`that Wahid is a bona fide interest holder in the Premises because he had no knowledge of the
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`Transfers. Obj. 9-10.
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`Legal Standard
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`Summary judgment is appropriate where there is “no genuine dispute as to any material
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`fact,” and the moving party is entitled to “judgment as a matter of law.” Fed. R. Civ. P. 56(a);19
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`see NML Capital v. Republic of Argentina, 621 F.3d 230, 236 (2d Cir. 2010) (citing Anderson v.
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`Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); Redd v. Wright, 597 F.3d 532, 535-36 (2d Cir.
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`17 In their Amended Answer to the Complaint, the Defendants asserted an affirmative defense based on the ordinary
`course of business under 11 U.S.C. § 547(c)(2). [AP ECF Doc. No. 15, ¶ 77]. The Defendants did not submit any
`evidence in support of that affirmative defense and did not address it in any manner in the Objection. Accordingly,
`for purposes of this Motion, they are deemed to have abandoned it. See Hassett v. Altai, Inc. (In re CIS Corp.), 214
`B.R. 108, 119 (Bankr. S.D.N.Y. 1997) (deeming unaddressed affirmative defenses as abandoned in granting trustee
`summary judgment on preference action).
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`18 The Trustee contends that Ratiba and Wahid are the initial and subsequent transferees of the Transfers,
`respectively. See, e.g., Compl. ¶¶ 1, 13, 25 (Ratiba as initial transferee) and Compl. ¶¶ 1, 5, 62-65 (Wahid as
`subsequent transferee); T. Aff. ¶ 3 (“the Trustee is entitled to partial summary judgment . . . (2) avoiding and
`preserving the transfers to Defendant Ratiba Salim; (3) directing that such transfers be set aside and recovering the
`transfers, or the value thereof, from Defendant Ratiba Salim for the benefit of the Debtor’s estate; and (4) avoiding
`and recovering the subsequent transfer to Defendant Wahid Saleem as a subsequent transferee of a property
`transferred to him by Defendant Ratiba Salim.”). Defendants blur that important distinction in the Objection, as
`they frequently refer to the “Defendants” even as they are discussing matters relating exclusively to Ratiba or
`Wahid, respectively. See, e.g., Obj. 5 (“Defendants have no clue about the transaction that went through their bank
`account”); Obj. 6 (“The defendants are not really transferees or “initial transferees. If there is any benefit that which
`inured to them . . . rendering them subsequent transferees . . . .”). In addressing the Objection, and to avoid
`confusion regarding the claims against Ratiba and Wahid, where necessary, this Court will not lump the Defendants
`together, but will separately address matters relating to Ratiba and Wahid consistent with the allegations in the
`Complaint and Motion.
`
`19 FED. R. BANKR. P. 7056 makes Rule 56 applicable in bankruptcy cases.
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`2010)). “An issue of fact is ‘genuine’ if the evidence is such that a [trier of fact] could return a
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`verdict for the non-moving party.” Senno v. Elmsford Union Free School Dist., 812 F. Supp. 2d
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`454, 467 (S.D.N.Y. 2011) (citing SCR Joint Venture L.P. v. Warshawsky, 559 F.3d 133, 137 (2d
`
`Cir. 2009)). A fact is “material” if it might affect the outcome of the litigation under the relevant
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`law. Id. (citation omitted).
`
`
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`The court must view the facts in the light most favorable to the non-moving party, and
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`must resolve all ambiguities and draw all inferences against the moving party. See NetJets
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`Aviation, Inc. v. LHC Communs., LLC, 537 F.3d 168, 178 (2d Cir. 2008) (citing Liberty Lobby,
`
`477 U.S. at 255; and Coach Leatherware Co. v. AnnTaylor, Inc., 933 F.2d 162, 167 (2d Cir.
`
`1991)). In determining whether to grant a motion for summary judgment, the court is not to
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`“weigh the evidence and determine the truth of the matter but to determine whether there is a
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`genuine issue for trial.” Cioffi v. Averill Park Cent. Sch. Dist. Bd. of Ed., 444 F.3d 158, 162 (2d
`
`Cir. 2006) (quoting Liberty Lobby, 477 U.S. at 249). Opposition to a summary judgment motion
`
`cannot be based on “conclusory allegations or unsubstantiated speculation.” Scotto v. Almenas,
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`143 F.3d 105, 114 (2d Cir. 1998). Likewise, “mere denials or unsupported alternative
`
`explanations of its conduct” will not suffice. Senno, 812 F.Supp.2d at 467 (citing SEC v. Grotto,
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`2006 WL 3025878, at *7 (S.D.N.Y. Oct. 24, 2006)). Rather, the non-moving party must still
`
`come forward with “specific facts showing that there is a genuine issue for trial” in order to
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`defeat a properly supported summary judgment motion. Liberty Lobby, 477 U.S. at 256. Thus,
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`“[s]ummary judgment is properly granted when the non-moving party ‘fails to make a showing
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`sufficient to establish the existence of an element essential to that party's case, and on which that
`
`party will bear the burden of proof at trial.’” Abramson v. Pataki, 278 F.3d 93, 101 (2d Cir.
`
`2002) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)).
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`As explained below, the Court finds that this matter is ripe for summary judgment as
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`there are no material facts in dispute. Before addressing the merits of the Motion, the Court will
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`address the Defendants’ contentions regarding the scope of this Court’s power to resolve the
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`Motion.
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`Discussion
`
`Whether the Bankruptcy Court Has the Power to Issue Proposed
`Findings of Fact and Conclusions of Law in Resolution of the Motion
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`The Court acknowledges that in filing the Objection the Defendants did not waive their
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`
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`right to have the Motion resolved in an Article III tribunal. Indeed, the District Court confirmed
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`that right when it denied the Reference Motion, and reinforced Defendants’ right of access to an
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`Article III tribunal when it granted Defendants’ petition for a writ of mandamus. See March
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`2013 Order at *12-14; July 2015 Order at *6-9. However, there is no merit to Defendants’
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`challenge to this Court’s power to issue proposed findings of fact and conclusions of law in
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`addressing the Motion.
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`
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`In denying the Reference Motion, the District Court applied the teachings of Stern v.
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`Marshall, 564 U.S. 338 (2011), to the facts of this case, and found that this Court “lacks
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`constitutional authority to enter a final judgment on [the Trustee’s] avoidance claims because
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`although they may be core bankruptcy matters [under 28 U.S.C. §§ 157(b)(2)(F) and (H)] they
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`concern private rights.” Nisselson v. Salim, 2013 WL 1245548 at *5. Nonetheless, the Court
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`found that the Bankruptcy Court "may still hear the case in the first