East Coast Brokers trustee eyes $25.86 million payment on theft claim

By Kali Hays

New York, Oct. 28 – East Coast Brokers & Packers, Inc. Chapter 11 trustee Gerard A. McHale, Jr. is looking to recover $8.62 million in allegedly fraudulent transfers made to B3 Sales, LLC and Batista J. Madonia III, according to an Oct. 27 complaint filed with the U.S. Bankruptcy Court for the Middle District of Florida.

B3 is owned and operated by Madonia III and East Coast claims that the company was “formed and operated solely to improperly syphon and divert money away from the debtor and had no other legitimate business purpose or operations.”

Madonia III is the son of East Coast’s director and president, Batista J. Madonia, Sr.

Between March 2009 and May 2011, Madonia III issued invoices to customers of East Coast, requesting that payments be made directly to B3 instead of the debtors for goods sold.

With no intention of reimbursing the company, Madonia III “used the funds to lavish himself and others at the detriment of the debtors and the creditors,” according to the complaint.

East Coast said that Madonia III used the funds to support a “gambling habit” among other personal expenses and when the trustee questioned him on the matter, Madonia III “invoked his Fifth Amendment right against self-incrimination and refused to answer all questions posed by the trustee, other than his name and address.”

Moreover, East Coast claims that Madonia Sr. knew of the diverting of funds from the company and “allowed the theft to occur.”

The company asked that the court order a full payment from Madonia III equaling three times the value of the property taken, roughly $25.86 million, plus interest, all attorney’s fees and any costs related to the recovery.

Mulberry, Fla.-based former tomato grower-shipper East Coast Brokers & Packers filed for bankruptcy on March 6, 2013 under Chapter 11 case number 13-02894.

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