WCI files suit to avoid two $76.38 million fraudulent transfer claims

By Caroline Salls

Pittsburgh, June 17 - WCI Communities, Inc. filed a lawsuit Wednesday against Ashbriar Partnership in an attempt to avoid two $76.38 million alleged fraudulent and preferential transfer claims, according to a filing with the U.S. Bankruptcy Court for the District of Delaware.

WCI said Ashbriar represents the interests of Albert H. Small Jr., who served as an officer of WCI from February 2005 through February 2008.

According to the complaint, Ashbriar sold property to WCI Hunter Mill, LLC in 2005 and was paid the full property value of $38 million.

At that time, the company said the parties hoped that the property could be rezoned and the development density increased.

"However, despite Herculean efforts, expenditures of significant amounts of money, and the devotion of thousands of hours of employee time, rezoning proved impossible," WCI said in the lawsuit.

Meanwhile, WCI paid $10 million to Ashbriar at Small's request as a rezoning payment in November 2007, but Ashbriar provided no value for the payment, which was made when WCI was insolvent.

Now, WCI said Ashbriar has filed identical proofs of claim, in the amount of $76.38 million, against WCI and Hunter Mill, "based on a hypothetical rezoning of the property that will never occur."

WCI, a Bonita Springs, Fla.-based home building and real estate services company, filed for bankruptcy on Aug. 4, 2008. Its Chapter 11 case number is 08-11643.

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