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Klatte v. Buckman, Buckman & Reid, Inc.

United States District Court, D. Minnesota

February 3, 2014

Michael A. Klatte, et al., Plaintiffs,
v.
Buckman, Buckman & Reid, Inc., Defendant

Page 952

Donald R. McNeil, Jr., Heley, Duncan & Melander, PLLP, Minneapolis, Minnesota, Michael S. MacDonald, Law Office of Michael S. MacDonald, Sunfish Lake, Minnesota, for Plaintiffs.

Margaret R. Ryan, Jacalyn N. Chinander, Meagher & Geer, PLLP, Minneapolis, Minnesota, Mark J. Astarita, Sallah Astarita & Cox, LLC, Verona, New Jersey, for Defendant.

OPINION

Page 953

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, United States District Judge.

INTRODUCTION

This fraudulent-transfer action comes before the Court on the Motion of Defendant Buckman, Buckman & Reid, Inc. (" Buckman" ) to transfer to the United States District Court for the District of New Jersey. For the reasons that follow, the Court will grant the Motion.

BACKGROUND

This case arises out of the alleged mismanagement of retirement funds entrusted to Leonard Demers, a New York-based investment adviser who worked for Mercer Capital, Ltd. (" Mercer Capital" ), a broker-dealer headquartered in New York City. Plaintiffs are Duane and Sheila Stolpe (" the Stolpes" ) and Michael Klatte, all Minnesota residents, along with several limited partnerships and trusts affiliated with them. They allege that despite knowing the Stolpes and Klatte were retired and required conservative management of their funds, Demers engaged in numerous high-risk transactions with their money, resulting in losses exceeding $2 million. As a result, the Stolpes and Klatte each commenced a FINRA [1] arbitration in

Page 954

Minnesota against Demers and Mercer Capital. The arbitrations were successful, and the Stolpes and Klatte were awarded more than a million dollars in damages.

Plaintiffs then attempted to enforce the arbitration awards against Mercer Capital but were " surprised" to discover it " had no assets and . . . was insolvent." (Compl. ¶ 37.) They later learned that following Demers's death in 2008, " the assets and property of Mercer Capital had been transferred to Buckman, upon information and belief, for less than reasonably equivalent value, if any." (Id. ¶ 38.) Buckman is a New Jersey corporation with its principal place of business in that state. (Id. ¶ 1.) According to Plaintiffs, it is simply a continuation of Mercer Capital, and the transfer of assets to it occurred " solely to avoid the satisfaction of the judgments from the Stolpe and Klatte FINRA Actions." (Id. ¶ 42.)

Plaintiffs commenced this action against Buckman on October 11, 2013, in the Washington County, Minnesota District Court, asserting claims for fraudulent transfer, " successor liability," and breach of contract. Buckman later removed the action to this Court and now moves to transfer to the District of New ...


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