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DISTRICT OF IDAHO
v.
The Plaintiff, Noah Hillen (the “Trustee”), by and through his counsel of record,
1. In this Adversary Proceeding, the Trustee seeks an order avoiding transfers and/or
COMPLAINT – PAGE 1
Matter: 9812-094
Case 18-06014-JMM Doc 1 Filed 04/19/18 Entered 04/19/18 17:10:33 Desc Main
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5. Defendants Does 1-5 are individuals or entities who may also claim an interest in
the aircraft (identified below). The exact identity of these parties is presently unknown. At such
time as the Trustee becomes aware of the identities of these parties (if any), the Trustee will
6. This Adversary Proceeding arises under Title 11 of the United States Code and
arises in or is related to the captioned Chapter 7 case now pending in the United States
7. This Court has jurisdiction over this adversary proceeding pursuant to the
provisions of 11 U.S.C. § 105 and 28 U.S.C. §§ 157, 2201 and 1334, all pursuant to the standard
8. The Trustee asserts the claims being pursued in this Adversary Proceeding are
“core proceedings” pursuant to 28 U.S.C. § 157 and related authority. To the extent the claims
pursued herein are not core proceedings, the Trustee expressly consents to the Bankruptcy Court
9. To the extent not a core proceeding, this is a “related to” proceeding under 28
COMPLAINT – PAGE 2
Matter: 9812-094
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10. This proceeding is brought pursuant to 11 U.S.C. § 105, Rule 65 of the Federal
Rules of Civil Procedure, and Rules 7065 and 7001(7) of the Federal Rules of Bankruptcy
Procedure.
FACTUAL BACKGROUND
11. On or before April 1, 2017, Loucks loaned the Debtor approximately $80,000.00
12. On or about April 1, 2017, the Debtor signed a Promissory Note obligating itself
13. Attached hereto as Exhibit A is a true and correct copy of the Promissory Note.
14. The Promissory Note was placed in escrow with Pioneer Title, with all payments
15. Attached hereto as Exhibit B is a true and correct copy of the Escrow Agreement.
16. The Debtor made regular payments on the Note, with all payments current
through the end of September 2017. After September 2017, no further payments were made on
the Note.
17. Attached hereto as Exhibit C is a true and correct copy of Pioneer Title’s payment
history, showing the payments made by the Debtor (which were subsequently paid to Loucks).
18. The Promissory Note was secured by two aircraft: a 1947 Beechcraft Bonanza,
serial number V-35 N602BH (the “Beechcraft”), and a 1964 Cessna 210 Centurion, serial
19. Both the Beechcraft and Cessna are titled vehicles, requiring registration with the
COMPLAINT – PAGE 3
Matter: 9812-094
Case 18-06014-JMM Doc 1 Filed 04/19/18 Entered 04/19/18 17:10:33 Desc Main
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20. As titled vessels, any security interest in the Beechcraft or Cessna must also be
21. Loucks never registered his security interest in the Beechcraft or Cessna.
22. Upon information and belief, prior to default by the Debtor, Loucks did not have
23. After the Debtor defaulted on payments, its principal Nathan Pyles instructed
Loucks to pick up the aircraft as payment of the amounts owed to Loucks. This instruction took
place after October 1, 2017, and was within 90 days of the filing of the bankruptcy petition in the
24. After taking possession of the Beechcraft and Cessna, Loucks has attempted to
25. Thompson is aware of the Debtor’s bankruptcy proceeding, and is aware of the
avoidability of the transfer of the aircraft from the Debtor to Loucks, and from Loucks to
Thompson.
26. The Trustee realleges all of the foregoing paragraphs as if fully set forth herein.
27. Within 90 days of the filing of the bankruptcy petition, the Debtor transferred the
Thompson
COMPLAINT – PAGE 4
Matter: 9812-094
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29. At the time of the Transfers, the Debtor had multiple creditors holding an
allowable unsecured claim, such as the Internal Revenue Service (“IRS”) that would have a right
30. The transfers are avoidable pursuant to 11 U.S.C. §544(b)(1) and Idaho Code
31. Pursuant to 11 U.S.C. §550(a)(1) the Trustee may recover the transfers of the
aircraft, or the value of the aircraft, from Loucks as the initial transferee or the entity on whose
32. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the transfers of the
aircraft, or the value of the aircraft, from Thompson as the immediate transferee of Loucks (the
initial transferee).
33. Because of Thompson’s knowledge of the bankruptcy case and the potential
avoidability of the transfer of the aircraft to Loucks, Thompson is not a transferee described in
11 U.S.C. §550(b)(1).
34. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the UFTA Transfers
from Does 1 through 5 as the immediate transferees of the initial transferee, U.S. Bank.
35. The Trustee realleges all of the foregoing paragraphs as if fully set forth herein.
36. Within 90 days of the filing of the bankruptcy petition, the Debtor transferred the
37. The Debtor, and by extension its creditors, did not receive reasonably equivalent
COMPLAINT – PAGE 5
Matter: 9812-094
Case 18-06014-JMM Doc 1 Filed 04/19/18 Entered 04/19/18 17:10:33 Desc Main
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38. Upon information and belief, the Debtor made the transfers with the actual intent
39. Alternatively, at the time each of the aircraft transfers were made, (a) the Debtor
was insolvent, or became insolvent as a result of the transfers; (b) the Debtor was engaged in
business (or about to engage in business) for which its remaining assets were unreasonably small
in relation to the Debtor’s business and debts owed; or (c) the Debtor intended to incur, or
believed it would incur, debts that would be beyond its ability to pay as such debts matured.
40. The transfers are fraudulent and are avoidable by the Trustee pursuant to 11
U.S.C. §548.
41. Pursuant to 11 U.S.C. §550(a)(1) the Trustee may recover the transfers from
Loucks as the initial transferee or the entity on whose behalf the transfers were made.
42. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the transfers of the
aircraft, or the value of the aircraft, from Thompson as the immediate transferee of Loucks (the
initial transferee).
43. Because of Thompson’s knowledge of the bankruptcy case and the potential
avoidability of the transfer of the aircraft to Loucks, Thompson is not a transferee described in
11 U.S.C. §550(b)(1).
44. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the 548 Transfers from
Does 1 through 5 as the immediate transferees of the initial transferee, U.S. Bank.
26. The Trustee reasserts all of the foregoing paragraphs as if fully set forth herein.
COMPLAINT – PAGE 6
Matter: 9812-094
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27. The lien against the aircraft was never perfected, or was perfected by possession
after October 1, 2017, which is within ninety days prior to the Petition Date.
28. The lien created by the possession of the aircraft after October 1, 2017, was a
“transfer” within the meaning of 11 U.S.C. §§ 101(31) and 547(b) (the “Transfer”).
29. The Transfer consisted of property in which the Debtor had an interest.
30. The Transfer of the property interest to Defendant Loucks was made for or on
account of unsecured antecedent debts owed by the Debtor to Loucks before the Transfer was
made.
31. The Transfer was made while the Debtor was insolvent.
32. The Transfer enabled Defendant Loucks to receive (i) more than he would receive
under Chapter 7 of the Bankruptcy Code, (ii) if the Transfer had not been made, and (iii) had
Defendant Loucks received payment of such debts to the extent provided by Chapter 7 of the
33. As a direct and proximate result of the foregoing, the Trustee is entitled to an
order avoiding and preserving the Transfer as to Defendant Loucks for the benefit of the
1. On Count One, for an order avoiding the Transfers and returning the aircraft to the
estate, or, alternatively, awarding a money judgment against Loucks, Thompson and
Does 1-5, jointly and severally, in an amount according to proof, but no less than
$70,000.00.
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Matter: 9812-094
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2. On Count Two, for an order avoiding the transfers and returning the aircraft to the
estate, or, alternatively, awarding a money judgment against Loucks, Thompson and
Does 1-5, jointly and severally, in an amount according to proof, but no less than
$70,000.00.
3. On Count Three, for an order, pursuant to 11 U.S.C. §§ 547 and 550, avoiding and
recovering for the bankruptcy estate the liens on the aircraft as preferential transfers
and preserving the lien for the benefit of the bankruptcy estate pursuant to 11 U.S.C.
§551;
4. For an award of costs and expenses, including attorney’s fees, associated with
5. For such other and further relief as the Court may deem just and equitable.
COMPLAINT – PAGE 8
Matter: 9812-094