Case 18-06014-JMM Doc 1 Filed 04/19/18 Entered 04/19/18 17:10:33 Desc Main

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Matthew T. Christensen, ISB: 7213

ANGSTMAN JOHNSON
3649 N. Lakeharbor Lane
Boise, Idaho 83703
Phone: (208) 384-8588
Fax: (208) 853-0117
Email: mtc@angstman.com

Attorney for Trustee

UNITED STATES BANKRUPTCY COURT

DISTRICT OF IDAHO

In re: Case No. 17-01458-JDP

SHILOH MANAGEMENT SERVICES, INC.

COMPLAINT
Debtor,
______________________________________

NOAH G. HILLEN, solely in his capacity as

Chapter 7 Trustee of the above-referenced
bankruptcy estate,

v.

LAMON R. LOUCKS, an individual;

MATHEW W. THOMPSON, an individual;
and DOES 1-5.

The Plaintiff, Noah Hillen (the “Trustee”), by and through his counsel of record,

ANGSTMAN JOHNSON, complains and alleges as follows:

NATURE OF ACTION AND PARTIES

1. In this Adversary Proceeding, the Trustee seeks an order avoiding transfers and/or

sales of certain aircraft by the Debtor and/or the Defendants.

2. Plaintiff, Noah Hillen, is the duly-appointed Chapter 7 Trustee of the above-

referenced bankruptcy proceeding.

COMPLAINT – PAGE 1
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3. Upon information and belief, Defendant Lamon R. Loucks (“Loucks”) is an

individual residing in Canyon County, Idaho.

4. Upon information and belief, Defendant Mathew W. Thompson (“Thomson”) is

an individual residing in Canyon County, Idaho.

5. Defendants Does 1-5 are individuals or entities who may also claim an interest in

the aircraft (identified below). The exact identity of these parties is presently unknown. At such

time as the Trustee becomes aware of the identities of these parties (if any), the Trustee will

amend this Complaint to name those additional parties.

JURISDICTION AND VENUE

6. This Adversary Proceeding arises under Title 11 of the United States Code and

arises in or is related to the captioned Chapter 7 case now pending in the United States

Bankruptcy Court for the District of Idaho at Case Number 17-01458-JMM.

7. This Court has jurisdiction over this adversary proceeding pursuant to the

provisions of 11 U.S.C. § 105 and 28 U.S.C. §§ 157, 2201 and 1334, all pursuant to the standard

order of reference entered in this District.

8. The Trustee asserts the claims being pursued in this Adversary Proceeding are

“core proceedings” pursuant to 28 U.S.C. § 157 and related authority. To the extent the claims

pursued herein are not core proceedings, the Trustee expressly consents to the Bankruptcy Court

entering final orders and judgments on all claims in this proceeding.

9. To the extent not a core proceeding, this is a “related to” proceeding under 28

U.S.C. § 157(c). Venue is proper under 28 U.S.C. § 1409(a).

COMPLAINT – PAGE 2
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10. This proceeding is brought pursuant to 11 U.S.C. § 105, Rule 65 of the Federal

Rules of Civil Procedure, and Rules 7065 and 7001(7) of the Federal Rules of Bankruptcy

Procedure.

FACTUAL BACKGROUND

11. On or before April 1, 2017, Loucks loaned the Debtor approximately $80,000.00

(in either cash or services).

12. On or about April 1, 2017, the Debtor signed a Promissory Note obligating itself

to repay the $80,000.00 to Loucks.

13. Attached hereto as Exhibit A is a true and correct copy of the Promissory Note.

14. The Promissory Note was placed in escrow with Pioneer Title, with all payments

made under the Note done pursuant to an escrow agreement.

15. Attached hereto as Exhibit B is a true and correct copy of the Escrow Agreement.

16. The Debtor made regular payments on the Note, with all payments current

through the end of September 2017. After September 2017, no further payments were made on

the Note.

17. Attached hereto as Exhibit C is a true and correct copy of Pioneer Title’s payment

history, showing the payments made by the Debtor (which were subsequently paid to Loucks).

18. The Promissory Note was secured by two aircraft: a 1947 Beechcraft Bonanza,

serial number V-35 N602BH (the “Beechcraft”), and a 1964 Cessna 210 Centurion, serial

number N2346F (the “Cessna”).

19. Both the Beechcraft and Cessna are titled vehicles, requiring registration with the

Federal Aviation Administration.

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20. As titled vessels, any security interest in the Beechcraft or Cessna must also be

registered with the Federal Aviation Administration.

21. Loucks never registered his security interest in the Beechcraft or Cessna.

22. Upon information and belief, prior to default by the Debtor, Loucks did not have

possession of the Beechcraft or Cessna.

23. After the Debtor defaulted on payments, its principal Nathan Pyles instructed

Loucks to pick up the aircraft as payment of the amounts owed to Loucks. This instruction took

place after October 1, 2017, and was within 90 days of the filing of the bankruptcy petition in the

above-referenced bankruptcy proceeding.

24. After taking possession of the Beechcraft and Cessna, Loucks has attempted to

sell, or is in the process of selling, the Beechcraft airplane to Thompson.

25. Thompson is aware of the Debtor’s bankruptcy proceeding, and is aware of the

avoidability of the transfer of the aircraft from the Debtor to Loucks, and from Loucks to

Thompson.

COUNT I – AVOIDANCE OF FRAUDULENT TRANSFERS

As to Defendant Loucks and Thompson

26. The Trustee realleges all of the foregoing paragraphs as if fully set forth herein.

27. Within 90 days of the filing of the bankruptcy petition, the Debtor transferred the

two aircraft to Loucks.

28. Loucks later then transferred, or attempted to transfer, the Beechcraft to

Thompson

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29. At the time of the Transfers, the Debtor had multiple creditors holding an

allowable unsecured claim, such as the Internal Revenue Service (“IRS”) that would have a right

under applicable nonbankruptcy law to avoid the transfers.

30. The transfers are avoidable pursuant to 11 U.S.C. §544(b)(1) and Idaho Code

§55-913) and §55-914.

31. Pursuant to 11 U.S.C. §550(a)(1) the Trustee may recover the transfers of the

aircraft, or the value of the aircraft, from Loucks as the initial transferee or the entity on whose

behalf the transfers were made.

32. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the transfers of the

aircraft, or the value of the aircraft, from Thompson as the immediate transferee of Loucks (the

initial transferee).

33. Because of Thompson’s knowledge of the bankruptcy case and the potential

avoidability of the transfer of the aircraft to Loucks, Thompson is not a transferee described in

11 U.S.C. §550(b)(1).

34. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the UFTA Transfers

from Does 1 through 5 as the immediate transferees of the initial transferee, U.S. Bank.

COUNT II - AVOIDANCE OF FRAUDULENT TRANSFERS

(11 U.S.C. §548(a)(1))
As to Defendant Loucks and Thompson

35. The Trustee realleges all of the foregoing paragraphs as if fully set forth herein.

36. Within 90 days of the filing of the bankruptcy petition, the Debtor transferred the

two aircraft to Loucks.

37. The Debtor, and by extension its creditors, did not receive reasonably equivalent

value for the transfers of the aircraft.

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38. Upon information and belief, the Debtor made the transfers with the actual intent

to hinder, delay or defraud its creditors.

39. Alternatively, at the time each of the aircraft transfers were made, (a) the Debtor

was insolvent, or became insolvent as a result of the transfers; (b) the Debtor was engaged in

business (or about to engage in business) for which its remaining assets were unreasonably small

in relation to the Debtor’s business and debts owed; or (c) the Debtor intended to incur, or

believed it would incur, debts that would be beyond its ability to pay as such debts matured.

40. The transfers are fraudulent and are avoidable by the Trustee pursuant to 11

U.S.C. §548.

41. Pursuant to 11 U.S.C. §550(a)(1) the Trustee may recover the transfers from

Loucks as the initial transferee or the entity on whose behalf the transfers were made.

42. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the transfers of the

aircraft, or the value of the aircraft, from Thompson as the immediate transferee of Loucks (the

initial transferee).

43. Because of Thompson’s knowledge of the bankruptcy case and the potential

avoidability of the transfer of the aircraft to Loucks, Thompson is not a transferee described in

11 U.S.C. §550(b)(1).

44. Pursuant to 11 U.S.C. §550(a)(2) the Trustee may recover the 548 Transfers from

Does 1 through 5 as the immediate transferees of the initial transferee, U.S. Bank.

COUNT III – AVOIDANCE OF PREFERENCE TRANSFER

As to Defendant Loucks

26. The Trustee reasserts all of the foregoing paragraphs as if fully set forth herein.

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27. The lien against the aircraft was never perfected, or was perfected by possession

after October 1, 2017, which is within ninety days prior to the Petition Date.

28. The lien created by the possession of the aircraft after October 1, 2017, was a

“transfer” within the meaning of 11 U.S.C. §§ 101(31) and 547(b) (the “Transfer”).

29. The Transfer consisted of property in which the Debtor had an interest.

30. The Transfer of the property interest to Defendant Loucks was made for or on

account of unsecured antecedent debts owed by the Debtor to Loucks before the Transfer was

made.

31. The Transfer was made while the Debtor was insolvent.

32. The Transfer enabled Defendant Loucks to receive (i) more than he would receive

under Chapter 7 of the Bankruptcy Code, (ii) if the Transfer had not been made, and (iii) had

Defendant Loucks received payment of such debts to the extent provided by Chapter 7 of the

Bankruptcy Code as an unsecured creditor.

33. As a direct and proximate result of the foregoing, the Trustee is entitled to an

order avoiding and preserving the Transfer as to Defendant Loucks for the benefit of the

Debtor’s bankruptcy estate, pursuant to 11 U.S.C. §§ 547, 550, and 551.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for relief against Defendants as follows:

1. On Count One, for an order avoiding the Transfers and returning the aircraft to the

estate, or, alternatively, awarding a money judgment against Loucks, Thompson and

Does 1-5, jointly and severally, in an amount according to proof, but no less than

$70,000.00.

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2. On Count Two, for an order avoiding the transfers and returning the aircraft to the

estate, or, alternatively, awarding a money judgment against Loucks, Thompson and

Does 1-5, jointly and severally, in an amount according to proof, but no less than

$70,000.00.

3. On Count Three, for an order, pursuant to 11 U.S.C. §§ 547 and 550, avoiding and

recovering for the bankruptcy estate the liens on the aircraft as preferential transfers

and preserving the lien for the benefit of the bankruptcy estate pursuant to 11 U.S.C.

§551;

4. For an award of costs and expenses, including attorney’s fees, associated with

bringing and prosecuting this adversary proceeding. In the event of a default

judgment, an award of attorney fees in the amount of $5,000.00 is reasonable.

5. For such other and further relief as the Court may deem just and equitable.

DATED this 19th day of April, 2018.

/s/ Matt Christensen

MATTHEW T. CHRISTENSEN
Attorney for Trustee

COMPLAINT – PAGE 8
Matter: 9812-094