Appellate court affirms judgment in Hurricane Deck Holding fraud case

By Sam Knef | Apr 11, 2018

SPRINGFIELD – The Missouri Court of Appeals, Southern District has affirmed a bench trial finding in favor of investment-related defendants accused of fraudulent transfer of assets.

In a March 28 ruling, the panel of judges found that Hurricane Deck Holding Co. did not prove that Daniel Spanburg and his wife, Karen Sellers, of Spanburg Investments had intent to defraud.

The appeals court noted that Hurricane Deck's evidence on “intent” required Camden County Circuit Court Judge Stanley Moore to make a credibility determination and he was not persuaded following a two-day bench trial.

"After reviewing the record, we do not have a firm belief that the judgment was wrong," wrote Justice Jeffrey W. Bates.

Justices Nancy Steffen Rahmeyer and William W. Francis Jr. concurred in the opinion.

According to background information in the ruling, Spanburg Investments had acquired four lots from Hurricane Deck in 2005, a transaction financed by Hurricane Deck.

Later that year, Spanburg Investments then borrowed $200,000 from the Bank of Versailles, secured by one of the four lots purchased from Hurricane. The purpose was to construct a spec home and develop infrastructure to the four lots.

Spanburg Investments made all of its interest payments but then defaulted on a balloon payment when the loan from Hurricane Deck matured on Jan. 1, 2010, the ruling states.

Thereafter, the Bank of Versailles foreclosed on the one lot with an unfinished house and Hurricane Deck then foreclosed on the other three lots and sued Spanburg Investments. It obtained judgment against Spanburg Investments in two separate amounts - $15,000 and $116,512.48.

At this point, Spanburg Investments was insolvent, the ruling states

Hurricane Deck then filed suit against all defendants alleging violation of Missouri’s Uniform Fraudulent Transfer Act (UFTA) and sought to pierce the corporate veil of Spanburg Investments to Spanburg and Sellers individually.

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