UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION In re: ) ) Case No. 07-71810 CEP HOLDINGS, INC., ) Debtor. ) ) Chapter 11 ______________________________________ In re: ) ) Judge Massey ) Case No. 07-71813 COLON END PARENTHESIS TRUST, ) LLC, ) Chapter 11 ) Debtor. ) Judge Massey ______________________________________ ) ) CEP HOLDINGS, INC., et al., ) ) Plaintiffs, ) v. ) Adversary Proceeding CLAYTON KIMBRELL, GREG ) ) No. 07-____________ KIMBRELL, TREVOR REED, EARL ) REED, GINGER PHILLIPS REED, RUSSELL PHILLIPS, JESSICA PHILLIPS, ) ) CHRIS BARANY and CLIFFORD ) BARANY, ) ) Defendants. ) COMPLAINT COMES NOW, CEP Holdings, Inc. (“Holdings”) and Colon End Parenthesis Trust, LLC (“Trust”)(collectively, the “Debtors”), and file this Complaint, alleging as follows: JURISDICTION AND VENUE 1. The Debtors filed voluntary petitions in bankruptcy under chapter 11 of the United States Bankruptcy Code (11 U.S.C. §§ 101, et seq.) on July 27, 2007 (the “Petition ATL 16702996v2 8/2/2007 Date”). This Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 157 and 1334. This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(F)(H) and (O). 2. Venue of this adversary proceeding is proper in this district pursuant to 28 U.S.C. § 1409. THE DEFENDANTS 3. Defendant Clayton Kimbrell (“Clayton”) is a resident of Indianapolis, Indiana. He was one of the managers, officers or directors of Debtors and also one of their owners. 4. Clayton may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of Clayton at 7810 Danube Street, Indianapolis, Indiana 46239 or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 5. Clayton was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 6. Defendant Greg Kimbrell (“G. Kimbrell”) is a resident of Indianapolis, Indiana. He is a relative of Clayton. 7. G. Kimbrell may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of G. Kimbrell at 7002 Bloomfield Dr. E., Indianapolis, Indiana 46259, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 8. G. Kimbrell was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 9. Defendant Trevor Reed (“Trevor”) is a resident of Wake Forest, North Carolina. He was one of the managers, officers or directors of Debtors and also one of their owners. 10. Trevor may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of Trevor at 1005 Horse Trail Way, Apt. 1005, Wake Forest, NC 27587, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 11. Trevor was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 12. Defendant Earl Reed (“E. Reed”) is a resident of the Commonwealth of Pennsylvania. He is a relative of Trevor. 13. E. Reed may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of E. Reed at RR 1, Box 550, Shamokin, PA 17872, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 14. E. Reed was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 15. Defendant Ginger Phillips Reed (“G. Reed”) is a resident of the State of North Carolina. She is a relative of Trevor. 16. G. Reed may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of G. Reed at 1005 Horse Trail Way, Apt. 1005, Wake Forest, NC 27587, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 17. G. Reed was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 18. Defendant Russell Phillips (“R. Phillips”) is a resident of Huntington Station, New York. He is a relative of Trevor. 19. R. Phillips may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of R. Phillips at 41 Murdock Street, Huntington Station, NY 11746, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 20. R. Phillips was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 21. Defendant Jessica Phillips (“J. Phillips”) is a resident of Huntington Station, New York. She is a relative of Trevor. 22. J. Phillips may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of J. Phillips at 41 Murdock Street, Huntington Station, NY 11746, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 23. J. Phillips was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 24. Defendant Chris Barany (“Chris Barany”) is a resident of Forked River, New Jersey. He was an employee of Debtors and may have had an ownership interest in Debtors. 25. Chris Barany may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of Barany at 421 Lake Barnegat Drive N., Forked River, NJ 08731, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 26. Chris Barany was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. 27. Defendant Clifford Barany (“Cliff Barany,” and collectively with Clayton, G. Kimbrell, Trevor, E. Reed, G. Reed, R. Phillips, J. Phillips, and Chris Barany, the “Defendants”) is a resident of Lodi, New Jersey. He is a relative of Chris Barany. 28. Cliff Barany may be served with process in this adversary proceeding by mailing a copy of the summons and a copy of this Complaint by first class United States mail, postage prepaid, to the attention of Barany at 396 Harrison Avenue, Apt 101, Lodi, NJ 07644, or by such other means as may be permitted by Rule 7004 of the Federal Rules of Bankruptcy Procedure. 29. Cliff Barany was an insider of the Debtors at the time of the transfers that are the subject of this Complaint. BACKGROUND 30. On July 9, 2007, the Securities and Exchange Commission (the “SEC”) filed its Complaint for Injunctive and Other Relief in the United States District Court for the Eastern District of North Carolina, Raleigh Division (the “District Court”), commencing the lawsuit styled Securities and Exchange Commission v. CEP Holdings, Inc., d/b/a colonendparenthesis.net, Trevor Reed, Clayton Kimbrell and Colon End Parenthesis Trust, LLC, Case No. 5:07-cv-00256-BO (the “SEC Action”). On July 10, 2007, the District Court entered the Order Granting Preliminary Injunction, Freezing Assets, Appointing a Receiver and Ordering Other Ancillary Relief (the “District Court Order”), to which Order the Defendants consented and the Debtors’ businesses were shut down. William F. Perkins was appointed receiver for the Debtors pursuant to the District Court Order and has since managed the Debtors’ assets and financial affairs. 31. The SEC has alleged that Trevor and Clayton, through Holdings, were involved in a fraudulent and unregistered offering of securities sold via the internet. 32. Upon information and belief, since May 2006, over $16 million has flowed into the bank accounts of Trust from more than 10,000 participants in one of the three “investment” programs operated by Holding’s d/b/a websites. Trust served as an internet payment processor through which participants received and disbursed money. 33. Upon information and belief, Holding’s “investment” programs included the following: (A) a passive, interest-only investment format at colonendparenthesis.net. This program required a minimum initial investment of $20 and promised a daily return of 2% (more than 700% per annum) that was payable every thirty days by credit to the participant’s account at Trust, and the participant committed to either a 180-day or 360-day option, but the original principal was not returned to the participant; and (B) the programs at CEPcoast.com and Coastin88.com were auto-surf sites whereby participants “purchased” advertising packages starting at $5 each for a website that the participant wished to expose or advertise. The participant chose to recover up to 130% (CEPcoast) or 115% (Coastin88) of their advertising expense by participating in a program that sent 15 websites to them to view and rate. It appears to have taken less than a month for the participant to recover cost plus the profit if an advertising purchaser also viewed and rated all 15 websites every day. The caveats of these auto-surf programs were: (i) only advertising purchasers were eligible to view and rate websites that earned credits, (ii) to participate in a daily payout, the participant had to review all 15 websites sent to him or her that day, (iii) CEPCoast.com paid out 90% of daily ad purchases and Coastin88.com paid out 88%, and (iv) the payout to viewers each day was dependent on that day’s advertising purchases (cash inflow), not the number of websites viewed and rated. 34. Upon information and belief, investors were led to believe that their funds were used to invest in safe “brick and mortar” type businesses that produced the promised yields, but there was no significant investment of participant funds in any third-party business or investment other than a money market account yielding approximately 4%. Neither Trevor nor Clayton invested personal funds in the programs described above. 35. Upon information and belief, (a) there was no review or audit of financial transactions of the Debtors and (b) records consist almost entirely of databases created by website transactions. 36. Several millions of dollars were transferred out of the Debtors’ accounts to Reed, Kimbrell, their family, as well as to employees and sub-contractors, for which Debtors did not receive reasonably equivalent value. 37. Debtors had no source of funding for the profits paid to participants in these schemes other than the deposits of subsequent investors. 38. The allegations set forth in paragraphs 31 through 37 are hereafter referred to as the “Scheme.” THE AVOIDABLE TRANSFERS 39. The Defendants were insiders of the Debtors prior to the District Court Order. During the operation of this Scheme, each of the Defendants received transfers from the Debtors. The source of these payments were the principal investments of the Debtors’ investors. The fraudulent nature of the transfers was concealed from Debtors’ investors. It is inequitable for the Defendants to retain these payments to the detriment of Debtors’ creditors and investors. 40. During the operation of the Scheme, Debtors made transfers to Clayton totaling not less than $397,606.70 as set forth on the schedule attached hereto as Exhibit A. It is the Debtors’ contention that all transfers, in whatever form, made to Clayton by the Debtors (the “Clayton Transfers”) are avoidable and recoverable by the Debtors. Clayton is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit A, and even if the total amount of these transfers exceeds $397,606.70. 41. During the operation of the Scheme, Debtors made transfers to G. Kimbrell totaling not less than $102,000.00 as set forth on the schedule attached hereto as Exhibit B. It is the Debtors’ contention that all transfers, in whatever form, made to G. Kimbrell by the Debtors (the “G. Kimbrell Transfers”) are avoidable and recoverable by the Debtors. G. Kimbrell is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit B, and even if the total amount of these transfers exceeds $102,000.00. 42. During the operation of the Scheme, Debtors made transfers to Trevor totaling not less than $187,783.32 as set forth on the schedule attached hereto as Exhibit C. It is the Debtors’ contention that all transfers, in whatever form, made to Trevor by the Debtors (the “Trevor Transfers”) are avoidable and recoverable by the Debtors. Trevor is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit C, and even if the total amount of these transfers exceeds $187,783.32. 43. During the operation of the Scheme, Debtors made transfers to E. Reed totaling not less than $162,975.00 as set forth on the schedule attached hereto as Exhibit D. It is the Debtors’ contention that all transfers, in whatever form, made to E. Reed by the Debtors (the “E. Reed Transfers”) are avoidable and recoverable by the Debtors. E. Reed is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit D, and even if the total amount of these transfers exceeds $162,975.00. 44. During the operation of the Scheme, Debtors made transfers to G. Reed totaling not less than $96,284.00 as set forth on the schedule attached hereto as Exhibit E. It is the Debtors’ contention that all transfers, in whatever form, made to G. Reed by the Debtors (the “G. Reed Transfers”) are avoidable and recoverable by the Debtors. G. Reed is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit E, and even if the total amount of these transfers exceeds $96,284.00. 45. During the operation of the Scheme, Debtors made transfers to R. Phillips totaling not less than $222,213.00 as set forth on the schedule attached hereto as Exhibit F. It is the Debtors’ contention that all transfers, in whatever form, made to R. Phillips by the Debtors (the “R. Phillips Transfers”) are avoidable and recoverable by the Debtors. R. Phillips is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit F, and even if the total amount of these transfers exceeds $222,213.00. 46. During the operation of the Scheme, Debtors made transfers to J. Phillips totaling not less than $49,802.06 as set forth on the schedule attached hereto as Exhibit G. It is the Debtors’ contention that all transfers, in whatever form, made to J. Phillips by the Debtors (the “J. Phillips Transfers”) are avoidable and recoverable by the Debtors. J. Phillips is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit G, and even if the total amount of these transfers exceeds $49,802.06. 47. During the operation of the Scheme, Debtors made transfers to Chris Barany totaling not less than $250,781.00 as set forth on the schedule attached hereto as Exhibit H. It is the Debtors’ contention that all transfers, in whatever form, made to Chris Barany by the Debtors (the “Chris Barany Transfers”) are avoidable and recoverable by the Debtors. Chris Barany is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit H, and even if the total amount of these transfers exceeds $250,781.00. 48. During the operation of the Scheme, Debtors made transfers to Cliff Barany totaling not less than $4,220.00 as set forth on the schedule attached hereto as Exhibit I. It is the Debtors’ contention that all transfers, in whatever form, made to Cliff Barany by the Debtors are avoidable and recoverable by the Debtors (the “Cliff Barany Transfers”). Cliff Barany is on notice that the Debtors are seeking avoidance and recovery of all transfers from the Debtors, even if such transfers are not listed on Exhibit I, and even if the total amount of these transfers exceeds $4,220.00. 49. The Cliff Barany Transfers, the Clayton Transfers, the G. Kimbrell Transfers, the Trevor Transfers, E. Reed Transfers, the G. Reed Transfers, the R. Phillips Transfers, the J. Phillips Transfers, and the Chris Barany Transfers, are collectively hereafter referred to as the “Insider Transfers.” The total amount of the Insider Transfers that the Debtors are aware of at this time is $1,473,665.08. The Debtors reserve the right to amend this Complaint should additional transfers be discovered. COUNT I AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (Clayton) 50. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 51. The Clayton Transfers were transfers of interests in property of the Debtors. 52. The Clayton Transfers were made to Clayton in furtherance of the Debtors’ Scheme. 53. The Clayton Transfers were made to Clayton with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the Clayton Transfers were made. 54. The Clayton Transfers to Clayton are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors from Clayton pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT II AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (Clayton) 55. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 56. The Clayton Transfers to Clayton were transfers of interests in property of the Debtors. 57. The Debtors received less than reasonably equivalent value in exchange for each of the Clayton Transfers. 58. The Debtors were insolvent at the times that the Clayton Transfers were made or became insolvent as a result of the Clayton Transfers. 59. At the times of the Clayton Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 60. At the times of the Clayton Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 61. The Clayton Transfers to Clayton are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors from Clayton pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT III AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (Clayton) 62. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 63. In the alternative to the relief sought in Counts I and II, and if Clayton was, at the time the Clayton Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “Clayton Preferential Transfers”): (a) The Clayton Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The Clayton Preferential Transfers were made to or for the benefit of Clayton, a creditor of one or more of the Debtors. (c) The Clayton Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to Clayton before the Clayton Preferential Transfers were made. (d) The Clayton Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The Clayton Preferential Transfers enabled Clayton to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the Clayton Preferential Transfers had not been made, and Clayton received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The Clayton Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from Clayton pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT IV AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (G. Kimbrell) 64. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 65. The G. Kimbrell Transfers were transfers of interests in property of the Debtors. 66. The G. Kimbrell Transfers were made to G. Kimbrell in furtherance of the Debtors’ Scheme. 67. The G. Kimbrell Transfers were made to G. Kimbrell with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the G. Kimbrell Transfers were made. 68. The G. Kimbrell Transfers to G. Kimbrell are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors from G. Kimbrell pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT V AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (G. Kimbrell) 69. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 70. The G. Kimbrell Transfers to G. Kimbrell were transfers of interests in property of the Debtors. 71. The Debtors received less than reasonably equivalent value in exchange for each of the G. Kimbrell Transfers. 72. The Debtors were insolvent at the times that the G. Kimbrell Transfers were made or became insolvent as a result of the G. Kimbrell Transfers. 73. At the times of the G. Kimbrell Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 74. At the times of the G. Kimbrell Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 75. The G. Kimbrell Transfers to G. Kimbrell are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors from G. Kimbrell pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT VI AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (G. Kimbrell) 76. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 77. In the alternative to the relief sought in Counts IV and V, and if G. Kimbrell was, at the time the G. Kimbrell Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “G. Kimbrell Preferential Transfers”): (a) The G. Kimbrell Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The G. Kimbrell Preferential Transfers were made to or for the benefit of G. Kimbrell, a creditor of one or more of the Debtors. (c) The G. Kimbrell Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to G. Kimbrell before the G. Kimbrell Preferential Transfers were made. (d) The G. Kimbrell Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The G. Kimbrell Preferential Transfers enabled G. Kimbrell to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the G. Kimbrell Preferential Transfers had not been made, and G. Kimbrell received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The G. Kimbrell Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from G. Kimbrell pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT VII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (Trevor) 78. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 79. The Trevor Transfers were transfers of interests in property of the Debtors. 80. The Trevor Transfers were made to Trevor in furtherance of the Debtors’ Scheme. 81. The Trevor Transfers were made to Trevor with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the Trevor Transfers were made. 82. The Trevor Transfers to Trevor are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT VIII AVOIDANCE AND RECOVERY OF TRANSFERS MADE WITHIN TWO YEARS PRIOR TO THE PETITION DATE PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (Trevor) 83. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 84. The Trevor Transfers to Trevor were transfers of interests in property of the Debtors. 85. The Debtors received less than reasonably equivalent value in exchange for each of the Trevor Transfers. 86. The Debtors were insolvent at the times that the Trevor Transfers were made or became insolvent as a result of the Trevor Transfers. 87. At the times of the Trevor Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 88. At the times of the Trevor Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 89. The Trevor Transfers to Trevor are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT IX AVOIDANCE AND RECOVERY OF TRANSFERS MADE WITHIN ONE YEAR PRIOR TO THE PETITION DATE PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (Trevor) 90. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 91. In the alternative to the relief sought in Counts VII and VIII, and if Trevor was, at the time the Trevor Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “Trevor Preferential Transfers”): (a) The Trevor Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The Trevor Preferential Transfers were made to or for the benefit of Trevor, a creditor of one or more of the Debtors. (c) The Trevor Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to Trevor before the Trevor Preferential Transfers were made. (d) The Trevor Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The Trevor Preferential Transfers enabled Trevor to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the Trevor Preferential Transfers had not been made, and Trevor received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The Trevor Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from Trevor pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT X AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (E. Reed) 92. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 93. The E. Reed Transfers were transfers of interests in property of the Debtors. 94. The E. Reed Transfers were made to E. Reed in furtherance of the Debtors’ Scheme. 95. The E. Reed Transfers were made to E. Reed with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the E. Reed Transfers were made. 96. The E. Reed Transfers to E. Reed are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XI AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (E. Reed) 97. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 98. The E. Reed Transfers to E. Reed were transfers of interests in property of the Debtors. 99. The Debtors received less than reasonably equivalent value in exchange for each of the E. Reed Transfers. 100. The Debtors were insolvent at the times that the E. Reed Transfers were made or became insolvent as a result of the E. Reed Transfers. 101. At the times of the E. Reed Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 102. At the times of the E. Reed Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 103. The E. Reed Transfers to E. Reed are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (E. Reed) 104. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 105. In the alternative to the relief sought in Counts X and XI, and if E. Reed was, at the time the E. Reed Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “E. Reed Preferential Transfers”): (a) The E. Reed Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The E. Reed Preferential Transfers were made to or for the benefit of E. Reed, a creditor of one or more of the Debtors. (c) The E. Reed Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to E. Reed before the E. Reed Preferential Transfers were made. (d) The E. Reed Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The E. Reed Preferential Transfers enabled E. Reed to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the E. Reed Preferential Transfers had not been made, and E. Reed received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The E. Reed Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from E. Reed pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XIII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (G. Reed) 106. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 107. The G. Reed Transfers were transfers of interests in property of the Debtors. 108. The G. Reed Transfers were made to G. Reed in furtherance of the Debtors’ Scheme. 109. The G. Reed Transfers were made to G. Reed with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the G. Reed Transfers were made. 110. The G. Reed Transfers to G. Reed are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XIV AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (G. Reed) 111. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 112. The G. Reed Transfers to G. Reed were transfers of interests in property of the Debtors. 113. The Debtors received less than reasonably equivalent value in exchange for each of the G. Reed Transfers. 114. The Debtors were insolvent at the times that the G. Reed Transfers were made or became insolvent as a result of the G. Reed Transfers. 115. At the times of the G. Reed Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 116. At the times of the G. Reed Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 117. The G. Reed Transfers to G. Reed are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XV AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (G. Reed) 118. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 119. In the alternative to the relief sought in Counts XIII and XIV, and if G. Reed was, at the time the G. Reed Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “G. Reed Preferential Transfers”): (a) The G. Reed Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The G. Reed Preferential Transfers were made to or for the benefit of G. Reed, a creditor of one or more of the Debtors. (c) The G. Reed Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to G. Reed before the G. Reed Preferential Transfers were made. (d) The G. Reed Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The G. Reed Preferential Transfers enabled G. Reed to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the G. Reed Preferential Transfers had not been made, and G. Reed received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The G. Reed Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from G. Reed pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XVI AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (R. Phillips) 120. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 121. The R. Phillips Transfers were transfers of interests in property of the Debtors. 122. The R. Phillips Transfers were made to R. Phillips in furtherance of the Debtors’ Scheme. 123. The R. Phillips Transfers were made to R. Phillips with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the R. Phillips Transfers were made. 124. The R. Phillips Transfers to R. Phillips are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XVII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (R. Phillips) 125. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 126. The R. Phillips Transfers to R. Phillips were transfers of interests in property of the Debtors. 127. The Debtors received less than reasonably equivalent value in exchange for each of the R. Phillips Transfers. 128. The Debtors were insolvent at the times that the R. Phillips Transfers were made or became insolvent as a result of the R. Phillips Transfers. 129. At the times of the R. Phillips Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 130. At the times of the R. Phillips Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 131. The R. Phillips Transfers to R. Phillips are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XVIII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (R. Phillips) 132. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 133. In the alternative to the relief sought in Counts XVI and XVII, and if R. Phillips was, at the time the R. Phillips Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “R. Phillips Preferential Transfers”): (a) The R. Phillips Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The R. Phillips Preferential Transfers were made to or for the benefit of R. Phillips, a creditor of one or more of the Debtors. (c) The R. Phillips Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to R. Phillips before the R. Phillips Preferential Transfers were made. (d) The R. Phillips Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The R. Phillips Preferential Transfers enabled R. Phillips to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the R. Phillips Preferential Transfers had not been made, and R. Phillips received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The R. Phillips Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from R. Phillips pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XIX AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (J. Phillips) 134. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 135. The J. Phillips Transfers were transfers of interests in property of the Debtors. 136. The J. Phillips Transfers were made to J. Phillips in furtherance of the Debtors’ Scheme. 137. The J. Phillips Transfers were made to J. Phillips with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the J. Phillips Transfers were made. 138. The J. Phillips Transfers to J. Phillips are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XX AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (J. Phillips) 139. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 140. The J. Phillips Transfers to J. Phillips were transfers of interests in property of the Debtors. 141. The Debtors received less than reasonably equivalent value in exchange for each of the J. Phillips Transfers. 142. The Debtors were insolvent at the times that the J. Phillips Transfers were made or became insolvent as a result of the J. Phillips Transfers. 143. At the times of the J. Phillips Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 144. At the times of the J. Phillips Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 145. The J. Phillips Transfers to J. Phillips are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXI AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (J. Phillips) 146. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 147. In the alternative to the relief sought in Counts XIX and XX, and if J. Phillips was, at the time the J. Phillips Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “J. Phillips Preferential Transfers”): (a) The J. Phillips Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The J. Phillips Preferential Transfers were made to or for the benefit of J. Phillips, a creditor of one or more of the Debtors. (c) The J. Phillips Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to J. Phillips before the J. Phillips Preferential Transfers were made. (d) The J. Phillips Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The J. Phillips Preferential Transfers enabled J. Phillips to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the J. Phillips Preferential Transfers had not been made, and J. Phillips received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The J. Phillips Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from J. Phillips pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (Chris Barany) 148. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 149. The Chris Barany Transfers were transfers of interests in property of the Debtors. 150. The Chris Barany Transfers were made to Chris Barany in furtherance of the Debtors’ Scheme. 151. The Chris Barany Transfers were made to Chris Barany with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the Chris Barany Transfers were made. 152. The Chris Barany Transfers to Chris Barany are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXIII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (Chris Barany) 153. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 154. The Chris Barany Transfers to Chris Barany were transfers of interests in property of the Debtors. 155. The Debtors received less than reasonably equivalent value in exchange for each of the Chris Barany Transfers. 156. The Debtors were insolvent at the times that the Chris Barany Transfers were made or became insolvent as a result of the Chris Barany Transfers. 157. At the times of the Chris Barany Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 158. At the times of the Chris Barany Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 159. The Chris Barany Transfers to Chris Barany are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXIV AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (Chris Barany) 160. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. In the alternative to the relief sought in Counts XXII and XXIII, and if Chris Barany was, at the time the Chris Barany Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “Chris Barany Preferential Transfers”): (a) The Chris Barany Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The Chris Barany Preferential Transfers were made to or for the benefit of Chris Barany, a creditor of one or more of the Debtors. (c) The Chris Barany Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to Chris Barany before the Chris Barany Preferential Transfers were made. (d) The Chris Barany Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The Chris Barany Preferential Transfers enabled Chris Barany to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the Chris Barany Preferential Transfers had not been made, and Chris Barany received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The Chris Barany Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from Chris Barany pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXV AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(A) AND 550(a) OF THE BANKRUPTCY CODE (Cliff Barany) 161. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 162. The Cliff Barany Transfers were transfers of interests in property of the Debtors. 163. The Cliff Barany Transfers were made to Cliff Barany in furtherance of the Debtors’ Scheme. 164. The Cliff Barany Transfers were made to Cliff Barany with actual intent to hinder, delay or defraud the creditors of the Debtors to which the Debtors were or became indebted on or after the dates that the Cliff Barany Transfers were made. 165. The Cliff Barany Transfers to Chris Barany are avoidable pursuant to section 548(a)(1)(A) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXVI AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 548(a)(1)(B) AND 550(a)(1) OF THE BANKRUPTCY CODE (Cliff Barany) 166. The Debtors incorporate by reference paragraphs 1 through 49 above as if fully set forth herein. 167. The Cliff Barany Transfers to Cliff Barany were transfers of interests in property of the Debtors. 168. The Debtors received less than reasonably equivalent value in exchange for each of the Cliff Barany Transfers. 169. The Debtors were insolvent at the times that the Cliff Barany Transfers were made or became insolvent as a result of the Cliff Barany Transfers. 170. At the times of the Cliff Barany Transfers, the Debtors were engaged in business or a transaction, or were about to engage in business or a transaction, for which any property remaining with the Debtors was unreasonably small capital. 171. At the times of the Cliff Barany Transfers, the Debtors intended to incur, or believed that the Debtors would incur, debts that would be beyond the ability of the Debtors to pay as such debts matured. 172. The Cliff Barany Transfers to Cliff Barany are avoidable pursuant to section 548(a)(1)(B) of the Bankruptcy Code and are recoverable by the Debtors pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXVII AVOIDANCE AND RECOVERY OF TRANSFERS PURSUANT TO SECTIONS 547(b) AND 550(a)(1) OF THE BANKRUPTCY CODE (Cliff Barany) 173. The Debtors incorporate by reference paragraphs 1 through 49 as if fully set forth herein. 174. In the alternative to the relief sought in Counts XXV and XXVI, and if Cliff Barany was, at the time the Cliff Barany Transfers were made, a creditor of one or more of the Debtors (which transfers in repayment of any such debt are hereafter referred to as the “Cliff Barany Preferential Transfers”): (a) The Cliff Barany Preferential Transfers that were made within 1 year prior to the Petition Date were transfers of interests in property of the Debtors. (b) The Cliff Barany Preferential Transfers were made to or for the benefit of Cliff Barany, a creditor of one or more of the Debtors. (c) The Cliff Barany Preferential Transfers were made for or on account of an antecedent debt owed by one or more of the Debtors to Cliff Barany before the Cliff Barany Preferential Transfers were made. (d) The Cliff Barany Preferential Transfers were made while the Debtors were insolvent within the meaning of section 547 and section 101(32) of the Bankruptcy Code. (e) The Cliff Barany Preferential Transfers enabled Cliff Barany to receive more than he would have received if the bankruptcy cases of the Debtors were cases under chapter 7 of the Bankruptcy Code, the Cliff Barany Preferential Transfers had not been made, and Cliff Barany received payment of his debt to the extent provided by the provisions of the Bankruptcy Code; and (f) The Cliff Barany Preferential Transfers constitute avoidable preferential transfers pursuant to the provisions of section 547(b) of the Bankruptcy Code and are recoverable by the Debtors from Cliff Barany pursuant to section 550(a)(1) of the Bankruptcy Code. COUNT XXVIII BREACH OF FIDUCIARY DUTY (Clayton & Trevor) 175. The Debtors incorporate by reference paragraphs 1 through 174 as if fully set forth herein. 176. As an officer, director and/or manager of the Debtors, Clayton owed a fiduciary duty to Debtors. 177. As an officer, director and/or manager of the Debtors, Trevor owed a fiduciary duty to Debtors. 178. The Insider Transfers were not in the best interests of the Debtors. 179. Clayton did not act with the care an ordinarily prudent person in a like position would exercise under similar circumstances. 180. Trevor did not act with the care an ordinarily prudent person in a like position would exercise under similar circumstances. 181. Clayton’s authorization and distribution of the Insider Transfers was not made in good faith. 182. Trevor’s authorization and distribution of the Insider Transfers was not made in good faith. 183. As a result of Clayton’s breach of his fiduciary duty owing to the Debtors, he is liable to the Debtors for the amount of the Insider Transfers. 184. As a result of Trevor’s breach of his fiduciary duty owing to the Debtors, he is liable to the Debtors for the amount of the Insider Transfers. 185. Based on the forgoing, Debtor is entitled to a judgment against Clayton and Trevor, jointly and severally, in the amount of the Insider Transfers. COUNT XXIX FRAUD (Clayton & Trevor) 186. The Debtors incorporate by reference paragraphs 1 through 185 as if fully set forth herein. 187. The Insider Transfers were part of the Scheme. 188. The Insider Transfers were made with the intention to hinder, delay and defraud Debtors creditors and investors. 189. Based on the forgoing, and in the alternative to Count XXVIII, Debtor is entitled to a judgment against Clayton and Trevor, jointly and severally, in the amount of the Insider Transfers. WHEREFORE, the Debtors respectfully request that the Court enter judgment in their favor as follows: a. Pursuant to Counts I and II, that the Clayton Transfers be avoided and recovered from Clayton pursuant to sections 548 and 550 of the Bankruptcy Code; b. Pursuant to Count III, in the alternative to Counts I and II, that the Clayton Preferential Transfers be avoided and recovered from Clayton pursuant to section 547 and 550 of the Bankruptcy Code; c. Pursuant to Counts IV and V, that the G. Kimbrell Transfers be avoided and recovered from G. Kimbrell pursuant to sections 548 and 550 of the Bankruptcy Code; d. Pursuant to Count VI, in the alternative to Counts IV and V, that the G. Kimbrell Preferential Transfers be avoided and recovered from G. Kimbrell pursuant to section 547 and 550 of the Bankruptcy Code; e. Pursuant to Counts VII and VIII, that the Trevor Transfers be avoided and recovered from Trevor pursuant to sections 548 and 550 of the Bankruptcy Code; f. Pursuant to Count IX, in the alternative to Counts VII and VIII, that the Trevor Preferential Transfers be avoided and recovered from Trevor pursuant to section 547 and 550 of the Bankruptcy Code; g. Pursuant to Counts X and XI, that the E. Reed Transfers be avoided and recovered from E. Reed pursuant to sections 548 and 550 of the Bankruptcy Code; h. Pursuant to Count XII, in the alternative to Counts X and XI, that the E. Reed Preferential Transfers be avoided and recovered from E. Reed pursuant to section 547 and 550 of the Bankruptcy Code; i. Pursuant to Counts XIII and XIV, that the G. Reed Transfers be avoided and recovered from G. Reed pursuant to sections 548 and 550 of the Bankruptcy Code; j. Pursuant to Count XV, in the alternative to Counts XIII and XIV, that the G. Reed Preferential Transfers be avoided and recovered from G. Reed pursuant to section 547 and 550 of the Bankruptcy Code; k. Pursuant to Counts XVI and XVII, that the R. Phillips Transfers be avoided and recovered from R. Phillips pursuant to sections 548 and 550 of the Bankruptcy Code; l. Pursuant to Count XVIII, in the alternative to Counts XVI and XVII, that the R. Phillips Preferential Transfers be avoided and recovered from R. Phillips pursuant to section 547 and 550 of the Bankruptcy Code; m. Pursuant to Counts XIX and XX, that the J. Phillips Transfers be avoided and recovered from J. Phillips pursuant to sections 548 and 550 of the Bankruptcy Code; n. Pursuant to Counts XXI, in the alternative to Counts XIX and XX, that the J. Phillips Preferential Transfers be avoided and recovered from J. Phillips pursuant to section 547 and 550 of the Bankruptcy Code; o. Pursuant to Counts XXII and XXIII, that the Chris Barany Transfers be avoided and recovered from Chris Barany pursuant to sections 548 and 550 of the Bankruptcy Code; p. Pursuant to Count XXIV, in the alternative to Counts XXII and XXIII, that the Chris Barany Preferential Transfers be avoided and recovered from Chris Barany pursuant to section 547 and 550 of the Bankruptcy Code; q. Pursuant to Counts XXV and XXVI, that the Cliff Barany Transfers be avoided and recovered from Cliff Barany pursuant to sections 548 and 550 of the Bankruptcy Code; r. Pursuant to Count XXVII, in the alternative to Counts XV and XVI, that the Cliff Barany Preferential Transfers be avoided and recovered from Cliff Barany pursuant to section 547 and 550 of the Bankruptcy Code; s. Pursuant to Count XXVIII, in the amount of the Insider Transfers against Clayton and Trevor, jointly and severally, for their breaches of fiduciary duty; t. Pursuant to Count XXIX, and in the alternative to Count XXVIII, in the amount of [The remainder of this page has been left intentionally blank] the Insider Transfers against Clayton and Trevor, jointly and severally, for fraud; u. Providing that the Debtors recover prejudgment interest on the amount of the judgment at the legal rate allowed under 28 U.S.C. § 1961 from the date hereof; v. Providing for an award of costs to the Debtors; and w. Providing for such other and further relief as this Court may deem necessary and proper. Respectfully submitted, this 2nd day of August, 2007. GREENBERG TRAURIG, LLP /s/ James R. Sacca James R. Sacca Georgia Bar No. 621843 John D. Elrod Georgia Bar No. 246604 3290 Northside Parkway, N.W. Suite 400 Atlanta, Georgia 30327 Telephone: (678) 553-2100 Telecopier: (678) 553-2269 PROPOSED COUNSEL FOR THE DEBTORS