The opinion of the court was delivered by: Kugler, United States District Judge:
NOT FOR PUBLICATION (Docket No. 13)
This matter arises out of the alleged fraudulent transfer of funds by a debtor. In this case, a corporate entity bearing the name Harry C. Wittmaier, Inc. entered into a collective bargaining agreement with Plaintiffs United Association, Local Union No. 322 Pension Fund et al.*fn1 After the two entities formed the agreement, Plaintiffs filed an involuntary bankruptcy petition against Harry C. Wittmaier, Inc. under Chapter 7 of the Bankruptcy Code, and the President of Harry C. Wittmaier, Inc. filed a voluntary bankruptcy petition under Chapter 7 of the Bankruptcy Code. Now, Plaintiffs seek payment pursuant to the collective bargaining agreement. Presently before the Court is the Motion to Dismiss filed by De
fendants Harry C. Wittmaier, Inc., Joseph P.
Schmidt, Sr., and Joseph P. Schmidt, Sr. Inc. for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). For the reasons discussed below, the motion is granted in part and denied in part.
A.Harry C. Wittmaier, Inc.
Harry C. Wittmaier, Inc. ("HCW") is a corporation formed in the State of New Jersey. (Compl. ¶ 11). HCW dissolved in December 1993. (Id.). Defendant Joseph P. Schmidt, Sr. ("Schmidt") was an owner and/or officer of HCW. (Compl. ¶ 9). The Complaint alleges that after 1993, "[t]he name 'Harry C. Wittmaier, Inc.' has . . . been used in the conduct of an unincorporated business by Schmidt, as a sole proprietor or general partner, from 1993 (or earlier) . . . [and] from 2002 to 2008 and beyond." (Compl. ¶ 11).
B.Schmidt's Sale to DeRitis
Schmidt is also the former owner of Joseph P. Schmidt, Sr., Inc. ("JPSS, Inc. t/a HCW, Inc.").*fn2 In June 2002, Schmidt sold ninety percent of his ownership interest in JPSS, Inc. t/a HCW, Inc. to Charles DeRitis, the President of JPSS, Inc. t/a HCW, Inc., for $1,100,000.00 and $338,000.00 of the profit earned by JPSS, Inc. t/a HCW, Inc. during 2002. At the time of the sale, Schmidt was an officer and/or director of JPSS, Inc. t/a HCW, Inc. Under the terms of the sales agreement, DeRitis was required to: (1) "keep in effect all life insurance policies on the life of [Schmidt]," (id. ¶ 15); (2) "keep in effect medical insurance for the benefit of [Schmidt] . . ." (id.); (3) "cause [JPSS, Inc. t/a HCW, Inc.] to employ Andrew Schmidt as General Manager", (id.); and (4) "cause [JPSS, Inc. t/a HCW, Inc.] to maintain and pay for the Nextel telephone . . .
In addition to the aforementioned terms, the sales agreement required DeRitis to provide Schmidt with the following forms of collateral. First, DeRitis agreed to maintain a life insurance policy for $1,185,000.00 with either Schmidt or JPSS, Inc. t/a HCW, Inc. as the named beneficiary. Second, DeRitis agreed to give as collateral all of the present and future property of JPSS, Inc. t/a HCW, Inc., including all receivables such as contracts, equipment, inventory, tangible and intangible property. Third, the agreement required DeRitis to grant a first security interest in all of the corporate stock of JPSS, Inc. t/a HCW, Inc., to include the shares sold to DeRitis plus ten percent of the corporate stock owned by Deritis, as well as all JPSS, Inc. t/a HCW, Inc. receivables. Fourth, DeRitis was required to give Schmidt a second security interest and mortgage in his personal residence.
After the parties entered into the sales agreement, Schmidt remained an officer or employee of JPSS, Inc. t/a HCW, Inc.
C.The Collective Bargaining Agreement
On March 1, 2005, DeRitis signed a collective bargaining agreement with the Union (the "Labor Contract"). The Complaint alleges that DeRitis signed the Labor Contract using the title "Harry C. Wittmaier, Inc." with the "actual or apparent authority of JPSS, Inc. [t/a HCW, Inc.] and/or Schmidt." (Compl. ¶ 18). The Complaint further alleges that HCW entered into agreements with Union representatives (the "Trust Agreements"). Under the terms of the Labor Contract and the Trust Agreements, HCW agreed to: (1) "make full and timely payments on a monthly basis to the Funds Committee and the Union," (Compl. ¶ 20); (2) "file monthly remittance reports with the Funds, IAF, PAC and Union detailing all employees or work for which contributions were required under the Labor Contract," (id.); (3) "produce, upon request by the Funds, IFA, PAC and Union individually or jointly, all books and records deemed necessary to conduct an audit of HCW's records concerning its obligations to the Funds, IAF, PAC and Union," (id.); and (4) "pay liquidated damages and all costs of litigation, including attorneys' fees, expended by the Funds, IAF, PAC and Union to collect any amounts due as a consequence of HCW, Inc.'s failure to comply with its contractual obligations," (id.).
D.The UCC Financing Agreement
The Complaint alleges that on November 14, 2007, DeRitis, acting as a representative of JPSS, Inc. t/a HCW, Inc., signed a security UCC Financing Statement (the "UCC Financing Statement"). The UCC Financing Statement stated that Schmidt owned a security interest in all of JPSS, Inc. t/a HCW, Inc.'s inventory, corporate stock, accounts receivables, and contracts. Prior to November 14, 2007, there was no public record of a transfer of JPSS, Inc. t/a HCW, Inc. property to Schmidt under the Sales Agreement, and the Complaint alleges that there is currently no public record or filing of any security interest in the assets of HCW. Moreover, the Complaint alleges that at the time DeRitis filed the UCC Financing Statement, Harry C. Wittmaier, Inc. and/or JPSS, Inc. t/a HCW, Inc. owed Plaintiffs $164,316.64 under the terms of the Labor Contract. The Complaint alleges that DeRitis was insolvent on November 14, 2007, and HCW was insolvent on or before November 14, 2007.
In February 2008, DeRitis discontinued his employment with JPSS, Inc. t/a HCW, Inc. After DeRitis's departure, Schmidt took control over all ...