Continental Casualty Co. v. Symons

Dist. Ct. did not err in finding for plaintiff in bench trial on claim that defendant breached contract to purchase crop-insurance business by failing to pay plaintiff $25.4 million purchase price and then, after reselling said business to third-party for $40.5 million, fraudulently transferred sale proceeds to entities controlled by defendant so as to prevent defendant from paying plaintiff original purchase price for said business. Defendant’s justification for transfer of sale proceeds to controlled entities (i.e., payments for non-competition agreements and reinsurance treaty) either lacked legitimate business purpose, where controlled entities did not pose competitive threat to third-party or (with respect to reinsurance treaty) was overpriced. Moreover, Indiana Uniform Fraudulent Transfer Act prevented defendant from transferring sale proceeds to controlled entities, where plaintiff had open claim against defendant, defendant was technically insolvent at time of transfer, and defendant received only $16.5 million of $40.5 sale proceeds that prevented it from satisfying its debt to plaintiff. Also, Dist. Ct. could render controlled entities and individual family members who controlled said entities liable for instant judgment under Indiana statute and alter-ego theory, where record showed that: (1) corporate formalities among controlled entities were cosmetic and ignored; (2) assets among entities were commingled; and (3) one family member was principal agent of all relevant entities and was architect of instant re-sale of business to third-party.