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SULLIVAN, HILL, LEWIN, REZ & ENGEL Electronically Filed: September 4, 2012 A Professional Law Corporation James P. Hill, CA SBN 90478 (Pro Hac Vice) John R. Heisner, CA SBN 55716 (Pro Hac Vice) Elizabeth E. Stephens, NV SBN 5788 228 South Fourth Street, First Floor Las Vegas, NV 89101 Telephone: (702) 382-6440 Fax Number: (702) 384-9102 Attorneys for Plaintiff, William A. Leonard, Jr., Chapter 7 Trustee UNITED STATES BANKRUPTCY COURT DISTRICT OF NEVADA In re DIPAK DESAI, Debtor. WILLIAM A. LEONARD, JR., Chapter 7 Trustee, Plaintiff, v. Kusum Desai, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. BK-S-10-13050-MKN Chapter 7

ADV. NO. TRUSTEES COMPLAINT: (1) FOR DECLARATORY RELIEF; (2) FOR TURN OVER AND ACCOUNTING OF ESTATE ASSETS; (3) TO AVOID AND RECOVER FRAUDULENT TRANSFERS; AND DEMAND FOR JURY TRIAL Ctrm: MKN - Courtroom 2 Foley Federal Building 300 Las Vegas Blvd. South Las Vegas, NV 89101 Judge: Hon. Mike K. Nakagawa

Trustee William A. Leonard, Jr. (Plaintiff), the Chapter 7 Trustee of the bankruptcy estate of Dr. Dipak Desai (Debtor), hereby files this complaint against Kusum Desai (Defendant) for declaratory relief; for turnover and accounting of estate assets; and to avoid and recover fraudulent transfers. Plaintiff demands a trial by jury on all claims for relief. In support of this complaint, Plaintiff respectfully alleges as follows:
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I. JURISDICTION This Court and the District Court for the District of Nevada have jurisdiction over this

adversary proceeding pursuant to 28 U.S.C. 157 and 1334. This action is commenced pursuant to sections 105, 541, 542, 548 and 550 of the Bankruptcy Code (11 U.S.C. 101 et seq.) and Federal Rule of Bankruptcy Procedure 7001. 2. This action (1) relates to the underlying bankruptcy case of In re Dipak Desai, Case

No. BK-S-10-13050-MKN, presently pending in the United States Bankruptcy Court for the District of Nevada, and (2) is a core proceeding as set forth in 28 U.S.C. 157(b)(2)(A), (E), (H) and (O) in that it seeks the determination, avoidance, and recovery of fraudulent transfers and turnover of property of the estate. This Court may hear and determine the instant proceeding and enter appropriate orders pursuant to 28 U.S.C. 157(b)(1) and (2); provided, however, that the District Court for this District may be required to hear and determine final judgment following a jury trial as requested by Plaintiff and all matters related to and leading to entry of a final judgment. II. PARTIES Plaintiff is informed and believes and thereon alleges that Debtor is an individual who

at all times relevant hereto resided in Clark County, Nevada. 4. Plaintiff is informed and believes and thereon alleges that Defendant is the wife of the

Debtor and, at all times relevant hereto, resided in Clark County, Nevada. 5. On or about February 26, 2010 (Petition Date), Debtor, acting through Defendant,

who exercised ostensible authority pursuant to a Springing Durable Power of Attorney on behalf of the Debtor, filed and signed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. 6. On April 6, 2011, this Court converted the case to a case under Chapter 7 of the

Bankruptcy Code. On April 7, 2011, Plaintiff was duly appointed and is currently acting as the Chapter 7 Trustee of the Dipak Desai bankruptcy estate. /// ///
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III. ALLEGATIONS Unscheduled Independent Retirement Accounts and Pension Plans. 7. Plaintiff is informed and believes, and based thereon alleges, that prior to the Petition

Date, Debtor and Defendant became vested beneficiaries of several independent retirement accounts and pension plans (collectively Plans). 8. Plaintiff is informed and believes, and based thereon alleges, that the Plans include,

but are not limited to, the following: a. Debtor has a vested interest of approximately $18,700 in an independent

retirement account with Wells Fargo Advisors, Account Number 1579-5782; b. Defendant has a vested interest of approximately $26,400 in an independent

retirement account with Wells Fargo Advisors, Account Number 2461-8820; c. Defendant has a vested interest of approximately $413,500 in a profit sharing

plan for the benefit of Defendant with Wells Fargo Advisors, Account Number 6844-9327; and d. Defendant has a vested interest of approximately $3,500,000 in a money

purchase plan (Money Purchase Plan) with Kusum Desai, M.D. Chartered, a Nevada professional corporation administered by Lebenson Actuarial Services, Inc. 9. On February 26, 2010, in an attachment to Schedule B.12, Debtor disclosed his and

Defendants respective interests in the profit sharing plan and independent retirement accounts in which Wells Fargo Advisors serves as the trustee. [See Dkt. # 1, p. 22]. However, Debtor did not list these accounts as estate assets, claiming they are ERISA qualified accounts and are excluded from Debtors bankruptcy estate. [See Dkt. # 1, p. 22]. 10. Debtor and Defendant, the Debtors ostensible attorney-in-fact, failed to disclose

Defendants interest in the Money Purchase Plan in Debtors bankruptcy schedules and statement of financial affairs. Plaintiff discovered the Money Purchase Plan and confronted Defendant as to why she failed to disclose her interest in the Money Purchase Plan in the bankruptcy schedules. Defendant claimed she was advised that what she asserts is an ERISA qualified pension plan is
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excluded from the bankruptcy estate and need not have been reported. She was advised that the Money Purchase Plan was either excludable pursuant to 11 U.S.C. 541(c), or exemptible under state law and the Internal Revenue Code. [Dkt. #1043-2]. She was not advised to fail to disclose her Money Purchase Plan. B. Unscheduled Independent Retirement Accounts and Pension Plans Fail to Qualify under ERISA. 11. Plaintiff is informed and believes, and based thereon alleges, that the Plans are not

ERISA qualified. 12. Plaintiff is informed and believes, and based thereon alleges, that the assets of the

Money Purchase Plan were originally part of a pension plan established in the 1980s for Gastroenterology Center of Nevada, LLC (Gastroenterology Center). 13. Plaintiff is informed and believes, and based thereon alleges, that during the period of

time in which Defendants interest in the assets of Money Purchase Plan was part of the Gastroenterology Center pension plan, Defendant was not an employee of the Gastroenterology Center. Accordingly, she was not a qualified participant of the Gastroenterology Centers pension plan within the meaning of ERISA. 14. Plaintiff is informed and believes, and based thereon alleges, that in or about 2009,

Defendant rolled her interest in the Gastroenterology Centers pension plan into the Money Purchase Plan under Kusum Desai, M.D. Chartered for the purpose of protecting her assets from existing and potential creditors of Debtor and the Gastroenterology Center. 15. Plaintiff is informed and believes, and based thereon alleges, that the

Gastroenterology Centers pension plan and the Money Purchase Plan may have been top heavy plans, thereby in violation of ERISA. 16. Plaintiff is informed and believes, and based thereon alleges, that the only qualified

participants of the Money Purchase Plan, if any, were employers, owners and/or spouses of employers or owners of Kusum Desai, M.D. Chartered on the Petition Date, thereby disqualifying the Money Purchase Plan under ERISA. ///
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C.

Unscheduled Retirement Accounts, Pension Plans, and other Community Property are Estate Property. 17. Plaintiff is informed and believes, and based thereon alleges, that any and all interests

held by Defendant and/or Debtor in the Plans were community property of the Debtor on the Petition Date, pursuant to Nev. Rev. Stat. 123.220. 18. Plaintiff is informed and believes, and based thereon alleges, that any and all interests

held by Defendant and/or Debtor in the Plans were under the sole, equal, or joint management and control of the Debtor on the Petition Date. 19. Plaintiff is informed and believes, and based thereon alleges, that any and all interests

held by Defendant and/or Debtor in the Plans were liable for an allowable claim against the Debtor, or for both an allowable claim against the Debtor and an allowable claim against Defendant. 20. By reason of the forgoing facts, any and all interests held by Debtor and/or Defendant

in the Plans are property of the Debtors bankruptcy estate pursuant to 11 U.S.C. 541(a)(2). 21. Plaintiff is informed and believes, and based thereon alleges, that Debtor has also

failed to list other community property (together with the Plans, Community Property) of the Debtor that was (1) under the sole, equal, or joint management and control of the Debtor on the Petition Date; or (2) liable for an allowable claim against the Debtor, or for both an allowable claim against the Debtor and an allowable claim against Defendant. 22. By reason of the forgoing facts, any and all interests held by Debtor and/or Defendant

in the Community Property are property of the Debtors bankruptcy estate pursuant to 11 U.S.C. 541(a)(2). 23. Plaintiff is informed and believes, and based thereon alleges, that the Community

Property, including the Plans, is in Defendants possession or under her dominion and control. IV. FIRST CLAIM FOR RELIEF (For Declaratory Relief) 24. Plaintiff incorporates herein by reference the allegations in paragraphs 1 through 23,

inclusive, as though fully set forth herein.

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25.

A dispute currently exists between Plaintiff and Defendant as to the rights and

interests of Plaintiff to administer the Community Property, including but not limited to the Plans, free and clear of any rights, claims or interests of Defendant. Plaintiff requests this Court enter a judgment declaring that all of the Community Property, including but not limited to the Plans, is property of the Debtors estate and may be administered by Plaintiff free and clear of any rights, interest and/or claims of Defendant. V. SECOND CLAIM FOR RELIEF (To Compel Turn Over of the Assets of the Plans and other Community Property and for Accounting) [11 U.S.C. 542(a)] 26. Plaintiff incorporates herein by reference the allegations in paragraphs 1 through 23,

inclusive, and paragraph 25 as though fully set forth herein. 27. Defendant is in possession of property of the Debtors bankruptcy estate in the form

of the Community Property described herein. 28. Pursuant to section 542(a) of the Bankruptcy Code, an entity in possession of estate

property must deliver to the trustee, and account for, such property or the value of such property.... 11 U.S.C. 542(a). 29. Accordingly, Defendant must deliver to Plaintiff, and account for, the Community

Property, including but not limited to the Plans, or the value of such property. VI. THIRD CLAIM FOR RELIEF (To Avoid and Recover Fraudulent Transfers) [11 U.S.C. 548(a)(1)] 30. Plaintiff incorporates herein by reference the allegations in paragraphs 1 through 23,

inclusive, as though fully set forth herein. 31. In the alternative to claims one and two, Plaintiff is informed and believes, and based

thereon alleges, that any and all interests held by Defendant and/or the Debtor in the
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Gastroenterology Center pension plan have always been community property of the Debtor, pursuant to Nev. Rev. Stat. 123.220. 32. In the alternative to claims one and two, Plaintiff is informed and believes and

thereon alleges that, during the period between February 26, 2008 to the Petition Date, Debtor or Defendant, while acting on behalf of Debtor as his agent or attorney-in-fact, transferred community property Debtor held in the Gastroenterology Center pension plan to the Money Purchase Plan with the intent to actual intent to hinder, delay, or defraud individuals whom the Debtor was or became, on or after the date that such transfer was made, indebted. 33. In the alternative to claims one and two, Plaintiff is informed and believes, and based

thereon alleges, that when Debtor or Defendant, while acting on behalf of Debtor as his agent or attorney-in-fact, transferred community property Debtor held in the Gastroenterology Center pension plan to the Money Purchase Plan, Debtor received less than a reasonably equivalent value in exchange for such transfer and Debtor was insolvent, or became insolvent as a result of such transfer. 34. In the alternative to claims one and two, Plaintiff is informed and believes, and based

thereon alleges, that when Debtor or Defendant, while acting on behalf of Debtor as his agent or attorney-in-fact, transferred community property Debtor held in the Gastroenterology Center pension plan to the Money Purchase Plan, any and all interests held by Defendant and/or Debtor in the Gastroenterology Center pension plan were under the sole, equal, or joint management and control of the Debtor. 35. In the alternative to claims one and two, Plaintiff is informed and believes, and based

thereon alleges, that when Debtor or Defendant, while acting on behalf of Debtor as his agent or attorney-in-fact, transferred community property Debtor held in the Gastroenterology Center pension plan to the Money Purchase Plan, the Gastroenterology Center pension plan was not ERISA qualified and was liable for an allowable claim against the Debtor, or for both an allowable claim against the Debtor and an allowable claim against Defendant. /// ///
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36.

By reason of the foregoing facts, the transfer of community property Debtor held in

the Gastroenterology Center pension plan to the Money Purchase Plan constituted a fraudulent transfer avoidable by Plaintiff under 11 U.S.C 548(a)(1). 37. Pursuant to 11 U.S.C. 548 and 550, Plaintiff may avoid the transfer of interests in

property Debtor and/or Defendant held in the Gastroenterology Center pension plan to the Money Purchase Plan and may recover such property or its value from Defendant or her immediate or mediate transferees, plus interest thereon at the maximum rate provided by law. VII. FOURTH CLAIM FOR RELIEF (For Declaratory Relief) 38. Plaintiff incorporates herein by reference the allegations in paragraphs 1 through 23,

inclusive, and paragraphs 31 through 37, inclusive, as though fully set forth herein. 39. In the alternative to claims one and two, Plaintiff is informed and believes, and based

thereon alleges that, had the Debtor or Defendant not transferred the interests in property Debtor and/or Defendant held in the Gastroenterology Center pension plan to the Money Purchase Plan, Debtor would not be able to exempt such property under 11 U.S.C. 522(b). 40. Plaintiff requests this Court enter a judgment, pursuant to 11 U.S.C. 522(g),

declaring that the property held by Debtor or Defendant in the Money Purchase Plan is non-exempt property of the Debtors bankruptcy estate and may be administered by Plaintiff free and clear of any rights, interest and/or claims of Defendant. VIII. DEMAND FOR JURY TRIAL Plaintiff hereby demands a jury trial as to all claims for relief. IX. PRAYER FOR RELIEF WHEREFORE, the Plaintiff prays for judgment against the Defendant as follows: 1. On the First Claim for Relief, a. For a determination by the Court that the Community Property, including but -8-

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not limited to the Plans, is property of the Debtors bankruptcy estate free and clear of any rights, claims and/or interests of Defendant; 2. On the Second Claim for Relief, a. For an order by the Court requiring and directing Defendant to turn over the

Community Property, including but not limited to the Plans, and to account for the value of the Community Property; 3. On the Third Claim for Relief, a. For a determination by the Court that the transfer of the community property

held by the Debtor in the Gastroenterology Center pension plan to the Money Purchase Plan may be avoided and for recovery from Defendant, or any immediate or mediate transferee of Defendant, of the property transferred or the value of such property, subject to proof at trial, together with interest as allowed by law from the date of the transfer; 4. On the Fourth Claim for Relief, a. For a determination by the Court that the Money Purchase Plan is non-exempt

property of the Debtors bankruptcy estate free and clear of any rights, claims and/or interests of Defendant; and 5. On all Claims for Relief, a. For an award of interest on the principal amount at the maximum legal rate

and as allowed by law, together with costs of suit; and b. circumstances. Dated: September 4, 2012 SULLIVAN, HILL, LEWIN, REZ & ENGEL A Professional Law Corporation By: /s/ Elizabeth E. Stephens Elizabeth E. Stephens James P. Hill John R. Heisner Attorneys for Plaintiff, William A. Leonard, Jr., Chapter 7 Trustee For such other relief as the court deems just and equitable under the

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