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Pharmerica Chicago, Inc v. David Meisels

February 16, 2011

PHARMERICA CHICAGO, INC., PLAINTIFF,
v.
DAVID MEISELS, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Nan R. Nolan

MEMORANDUM OPINION AND ORDER

Plaintiff PharMerica Chicago, Inc., f/k/a KPS Chicago, Inc. ("PharMerica") filed a Complaint against Defendants David Meisels ("Meisels"), Continental Care Center, Inc. ("Continental"), Ambassador Nursing and Rehabilitation Center, Inc., f/k/a Ambassador Nursing Center ("Ambassador"), Bloomingdale Pavilion, LLC ("Bloomingdale Pavilion"), BCDM, LLC ("BCDM"), Bloomingdale Terrace Realty, LLC ("Bloomingdale Terrace"), Meisels Family Limited Partnership ("Meisels Family LP"),*fn1 and Michael Filippo ("Filippo"), alleging a variety of state law claims arising from Plaintiff's inability to collect on a judgment obtained by PharMerica against West Suburban Care Center, LLC ("West Suburban").*fn2 In its Complaint, Plaintiff alleges fraud, breach of fiduciary duty, conspiracy to breach fiduciary duty, inducement of a breach of fiduciary duty, fraudulent transfer, unjust enrichment, and tortious interference with contract. Defendants now move to dismiss all of Plaintiff's claims for failure to meet the pleading standards under Federal Rules of Civil Procedure 8(a) and 9(b), and for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6). Defendants also move to strike certain portions of Plaintiff's response in opposition to the motion to dismiss.*fn3 The parties have consented to the limited jurisdiction of the United States Magistrate Judge, pursuant to 28 U.S.C. § 636(c), to conduct certain specific proceedings related to the motion to dismiss and the motion to strike. For the reasons stated below, the motion to dismiss is granted in part and denied in part.

I. BACKGROUND*fn4

Plaintiff PharMerica provides pharmaceuticals and pharmaceutical management and consulting services to its customers. (Compl. ¶ 1.) One of its customers was a nursing facility located at 311 Edgewater Drive, Bloomingdale, Illinois (the "Facility"). (Id. ¶ 18.) Defendant BCDM was at one time the licensed operator of the Facility. (Id. ¶ 33.) On May 4, 2006, BCDM transferred operations of the Facility to West Suburban ("2006 Facility Transfer"), which was owned and operated by Defendant Filippo. (Id. ¶ 34, Ex. 3.) On the same day, Defendant Bloomingdale Terrace, which owned the real property at 311 Edgewater Drive, entered into a lease with West Suburban. (Id. ¶ 36, Ex. 6.)

In May 2007, PharMerica sued BCDM, Bloomingdale Pavilion, Bloomingdale Terrace, and Meisels for outstanding amounts owed for unpaid goods and services provided to the Facility from June 1, 2004, to May 4, 2006 ("2007 Lawsuit"). (Compl.

¶¶ 41-42, Exs. 8-9); see KPS Chicago, Inc. v. Continental Care Center, Inc., et al., No. 07 C 2591 (N.D. Ill. filed May 8, 2007). PharMerica also sued two other Meisels-owned facilities, Continental and Ambassador (collectively and together with Bloomingdale Pavilion, Bloomingdale Terrace and Meisels, the "2007 Lawsuit Defendants"),*fn5 for outstanding amounts they owed. (Compl. ¶ 43.)

West Suburban was originally named as a defendant in the 2007 Lawsuit. (Compl. ¶ 47, Ex. 8.) However, soon after PharMerica filed the 2007 Lawsuit, West Suburban's counsel, Abraham Stern, contacted PharMerica and stated that West Suburban was improperly named in the lawsuit. (Id. ¶ 48.) Because PharMerica's claims were for goods and services provided to the Facility, before West Suburban purchased the Facility's operations, Stern stated that West Suburban was not liable for any of the amounts owed. (Id. ¶¶ 49-50.) Stern also represented that West Suburban and its owner Filippo were "completely unrelated" and "not affiliated in any way with" Meisels or the other 2007 Lawsuit Defendants. (Id. ¶ 51.) BCDM, Bloomingdale Terrace, Meisels, Ambassador and Continental also represented in writing that they were unrelated to West Suburban. (Id. ¶ 52.) Based on the operations transfer date and documentation provided by Stern, along with representations made by Stern, PharMerica dismissed West Suburban from the 2007 Lawsuit without prejudice and continued to provide pharmacy goods and services to West Suburban. (Id. ¶¶ 58-59, Ex. 13.) On May 12, 2008, the parties reached a settlement in the 2007 Lawsuit. (Id. ¶ 62.) In the settlement, Meisels, through his counsel, made repeated representations that he was "unrelated" and "unaffiliated" with West Suburban. (Id. ¶¶ 16, 57, 63.)

In November 2007, West Suburban transferred operations of the Facility to the current operator, West Suburban Nursing and Rehabilitation Center, LLC, which is owned by Moishe Gubin ("2007 Facility Transfer"). (Compl. ¶ 67.) At the same time, Bloomingdale Terrace transferred the Facility's real estate to West Suburban Nursing Realty, LLC, which is also owned by Gubin. (Id. ¶ 68, Ex. 14.)

On July 2, 2008, PharMerica sued West Suburban for amounts due and owing for goods and services provided after May 2006 ("2008 Lawsuit"). (Compl. ¶¶ 71-73); see PharMerica Chicago, Inc. v. West Suburban Care Center, LLC, No. 08 C 3775 (N.D. Ill. filed July 2, 2008). West Suburban failed to answer the complaint and PharMerica obtained a $249,373.16 default judgment on September 9, 2008 ("Default Judgment"). (Compl. ¶¶ 13, 74, Ex. 1.) Because of West Suburban's insolvency, PharMerica has been unable to satisfy the Default Judgment. (Id. ¶¶ 101-02.)

West Suburban became insolvent as early as May 2007 when it was unable to pay its debts as they became due, including the debt owed to PharMerica. (Compl.¶¶ 101-02, 104-05, 132-34). During the time that West Suburban was insolvent, it transferred assets to Meisels via excessive lease payments to Bloomingdale Terrace. (Id. ¶¶ 124, 133.) Filippo-named owner and manager of West Suburban-and Meisels-West Suburban's de facto owner and manager-used West Suburban's assets to pay Meisels and his related entities before paying creditors like PharMerica. (Id. ¶¶ 135-36, 138-40.) Further, Meisels and Filippo unlawfully transferred West Suburban's assets by loading the consideration for the 2007 Facility Transfer into the sale proceeds for the real estate, thus avoiding West Suburban's liability to its creditors, such as PharMerica. (Id. ¶¶ 67-70, 98-99.) It was not until PharMerica conducted post-Default Judgment discovery after the 2008 Lawsuit that it learned that the lease payments made by West Suburban were not only a way for Meisels to hide the operations transfer proceeds, but also a way for Meisels to continue to pull out the proceeds from the Facility until he could sell both the Facility and the real property to Gubin. (Id. ¶¶ 67-70, 88-90.)

On May 3, 2010, Plaintiff filed the instant lawsuit. The Complaint alleges that Defendants and their agents made numerous misrepresentations to PharMerica and participated in fraudulent transfers, which resulted in West Suburban being unable to pay for goods and services provided by PharMerica or pay the Default Judgment. (Compl. ¶¶ 2-8, 13, 18-24, 41, 47-70, 85-97.) Plaintiff contends that the 2006 Facility Transfer was a sham transaction and a fraudulent transfer designed to thwart creditors of the Facility and siphon off money in excessive rent payments. (Id. ¶ 88.) Despite representations to the contrary by Defendants and their agents, Plaintiff asserts that Meisels was the real party in interest of West Suburban during the period giving rise to the Default Judgment. (Id. ¶ 89.) Plaintiff's Complaint alleges fraud against all Defendants except Meisels Family LP (Count I); breach of fiduciary duty against Meisels and Filippo (Count II); conspiracy to breach fiduciary duty against all Defendants (Count III); inducement of a breach of fiduciary duty against Meisels, Filippo, Continental and Bloomingdale Terrace (Count IV); fraudulent transfer against Meisels, Filippo and Bloomingdale Terrace (Count V); unjust enrichment against all Defendants (Count VI); and tortious interference with contract against Meisels, Filippo and Bloomingdale Terrace (Count VII). (Id. ¶¶ 116-80.)

II. STANDARD OF REVIEW

The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the sufficiency of the complaint, not to decide its merits. Gibson v. City of Chicago, 910 F.2d 1510, 1520 (7th Cir. 1990). A Rule 12(b)(6) motion to dismiss must be considered in light of the liberal pleading standard of Rule 8(a)(2), which requires only "a short and plain statement of the claim showing that the pleader is entitled to relief." "Specific facts are not necessary; the statement need only give the defendant fair notice of what the claim is and the grounds upon which it rests." Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (internal citations and alterations omitted). Determination of the sufficiency of a claim must be made "on the assumption that all allegations in the complaint are true (even if doubtful in fact)." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (emphasis omitted).

Nevertheless, a motion to dismiss should be granted if the plaintiff fails to make allegations that are "enough to raise a right to relief above the speculative level" and are sufficient to show "a plausible entitlement" to recovery under a viable legal theory. Twombly, 550 U.S. at 555, 559 (While the court must accept factual allegations as true, it need not credit mere labels, conclusions or "formulaic recitation of the elements of a cause of action."); EEOC v. Concentra Health Svcs., Inc., 496 F.3d 773, 776 (7th Cir. 2007) (The complaint's "allegations must plausibly suggest that the plaintiff has a right to relief, raising that possibility above a 'speculative level;' if they do not, the plaintiff pleads itself out of court."). However, "a plaintiff need not put all of the essential facts in the complaint," Hrubec v. Nat'l R.R. Passenger Corp., 981 F.2d 962, 963 (7th Cir. 1992); instead, the plaintiff "may add them by affidavit or brief in order to defeat a motion to dismiss if the facts are consistent with the allegations of the complaint," Help at Home Inc. v. Medical Capital, LLC, 260 F.3d 748, 752-53 (7th Cir. 2001); see Cruz v. Cross, 2010 WL 3655992, at *2 (N.D. Ill. 2010).

While "detailed factual allegations" are not required, the plaintiff must allege facts that, when "accepted as true, . . . state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (internal citation and quotation marks omitted). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. "Once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint." Twombly, 550 U.S. at 563.

III. MATERIALS OUTSIDE COMPLAINT

On a Rule 12(b)(6) motion to dismiss, the court generally must confine its inquiry to the factual allegations set forth within the four corners of the operative complaint. See Rosenblum v. Travelbyus.com, 299 F.3d 657, 661 (7th Cir. 2002); Hostway Corp. v. JPMorgan Chase Bank, N.A., 2009 WL 2601359, at *5 (N.D. Ill. 2009). Therefore, in the usual case, if a motion to dismiss includes additional materials, the court must either ignore the documents or convert the motion to one for summary judgment. See Fed. R. Civ. Pro. 12(d); Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993); Hostway, 2009 WL 2601359, at*5. However, in the Seventh Circuit, a narrow exception exists: "the court can consider documents attached to a motion to dismiss if the document is part of the pleadings that are referred to in the plaintiff's complaint, are central to his claim, and are properly authenticated (or authenticity is conceded)." Markin v. Chebemma, Inc., 2010 WL 1191868, at *5 (N.D. Ill. 2010); see Tierney v. Vahle, 304 F.3d 734, 738-39 (7th Cir. 2002). The Seventh Circuit "has been relatively liberal in its approach to the rule articulated in Tierney and other cases." Hecker v. Deere & Co., 556 F.3d 575, 582 (7th Cir. 2009); e.g., Wright v. Associated Ins. Cos., 29 F.3d 1244, 1248 (7th Cir. 1994) (upholding consideration of an agreement quoted in the complaint and central to the question whether a property interest existed for purposes of 42 U.S.C. § 1983); Venture Assocs., 987 F.2d at 431 (admitting letters, to which the complaint referred, that established the parties' contractual relationship); Ed Miniat, Inc. v. Globe Life Ins. Group, Inc., 805 F.2d 732, 739 (7th Cir. 1986) (permitting reference to a welfare plan referred to in the complaint in order to decide whether the plan qualifies under ERISA). Further, "in ruling on a 12(b)(6) motion, a district court may take judicial notice of matters of public record without converting the 12(b)(6) motion into a motion for summary judgment." Anderson v. Simon, 217 F.3d 472, 474-75 (7th Cir. 2000).

A. Defendants' Additional Materials

Defendants attached two additional documents to their Motion to Dismiss ("Motion"): (1) an Affidavit of Berard Tomassetti, Senior Vice President and Chief Accounting Officer of PharMerica ("Tomassetti Affidavit"), which was filed in the 2008 Lawsuit (Mot. to Dismiss ("Mot.") Ex. A); and (2) a May 2008 Settlement Agreement ("Settlement Agreement") between PharMerica and most of the Defendants (Mot. Ex. C).*fn6 In its Response to the Motion ("Response"), Plaintiff contends that because Defendants attached "additional evidence" to their Motion, it must be converted into a motion for summary judgment. (Resp. to Mot. ("Resp.") 2.) The Court disagrees.

First, the Court may take judicial notice of public records, including public court documents filed in other lawsuits, without converting a motion to dismiss pursuant to Rule 12(b)(6) to a motion for summary judgment. Henson v. CSC Credit Svcs., 29 F.3d 280, 284 (7th Cir. 1994); see Blazquez v. Bd. of Educ. of City of Chicago, 2006 WL 3320538, at *3 (N.D. Ill. 2006) (in ruling on motion to dismiss, court may consider facts alleged in related actions). Thus, in ruling on the Motion, the Court may consider the Tomassetti Affidavit without converting the Motion to one for summary judgment.

Second, "documents that a defendant attaches to a motion to dismiss are considered part of the pleadings if they are referred to in the plaintiff's complaint and are central to her claim." Venture Assocs., 987 F.2d at 431. Here, Plaintiff makes numerous references to the Settlement Agreement in its Complaint. (E.g., Compl. ¶¶ 58-60, 62-65, 95, 119-21.) Moreover, the Settlement Agreement is central to Plaintiff's fraud claims. (See id. ¶¶ 65 ("Based on the earlier misrepresentations . . . , PharMerica was fraudulently induced to enter into the [S]ettlement [A]greement."), 119 ("All Defendants except Meisels Family LP, directly and/or through their agents . . . , misrepresented to PharMerica, through its agents, that Meisels and all of his entities, including the Corporate Defendants were unrelated to Filippo and West Suburban, with the intent of inducing PharMerica to enter into a settlement of the 2007 Lawsuit, to the benefit of all of the Defendants."), 121 ("PharMerica would not have agreed to that provision in the[S]ettlement [A]greement for the 2007 Lawsuit but for all of the Defendants, except Meisels Family LP, [making] fraudulent misrepresentations to PharMerica . . . .").) Finally, Plaintiff does not dispute the Settlement Agreement's authenticity.

Accordingly, for purposes of the Motion, the Settlement Agreement is considered part of the pleadings. See Powe v. City of Chicago, 1996 WL 99711, at *3 (N.D. Ill. 1996) (because settlement agreement is central to plaintiff's claims, the court may consider it in ruling on defendant's motion to dismiss); Kingsley v. Huf N. Am. Auto. Parts Mfg. Corp., 2009 WL 1444136, at *2 (E.D. Wis. 2009) ("The settlement agreement is referred to in plaintiff's complaint and is central to plaintiff's claim, thus it constitutes part of the pleadings, and the court may consider it within the context of defendant's Rule 12(b)(6) motion."); see also Spight v. Safer Found., 1999 WL 184198, at *1 n.1 (N.D. Ill. 1999) (because employee handbook is central to several of plaintiff's claims and portions were attached to complaint, the entire handbook, which was attached to the motion to dismiss, is considered part of the pleadings); Stern v. James H. Anderson, Inc., 1995 WL 609329, at *3 (N.D. Ill. 1995) (finding documents attached to motion to dismiss central to Plaintiff's claims and referenced in the complaint; thus motion to dismiss not converted to one for summary judgment).

B. Plaintiff's Additional Materials

In their Motion to Strike, Defendants contend that Plaintiff's Response to Defendants' Motion is "filled with additional factual matters and exhibits which are found nowhere in Plaintiff's Complaint." (Mot. to Strike 1.) Specifically, Defendants assert that "Exhibits 1-6 and 8-9, and pages 4 through 9 of Plaintiff's Response consist of or are entirely reliant on outside facts and are subject to being stricken." (Id. 2.) Plaintiff argues that the Motion to Strike should be denied because: (1) the "additional facts" are taken from, or referenced in, the Complaint; (2) the exhibits attached to Plaintiff's Response to the Motion to Dismiss should be considered because they prove that Plaintiff alleged fraud with specificity pursuant to Federal Rule of Civil Procedure 9(b); and (3) Defendants "filed a Motion to Dismiss that included facts and documents . . . outside of [the] Complaint," such that "the Motion to Dismiss was essentially a Motion for Summary Judgment." (Resp. to Mot. to Strike 1-2.)

Plaintiff attached twelve exhibits to its Response. Exhibit 7 is a copy of the Settlement Agreement, which the Court has ruled is part of the pleadings. See supra § III.A. Exhibits 10, 11 and 12, to which Defendants do not object, are public records from this lawsuit and the 2008 Lawsuit. The Court will take judicial notice of these records without converting the Motion to Dismiss to one for summary judgment. See Henson, 29 F.3d at 284; Blazquez, 2006 WL 3320538, at *3. In regards to the remaining exhibits, the Court rules as follows:

 Exhibit 1 is a newspaper article analyzing nursing home investment trends. The article is neither referred to in the Complaint, nor consistent with its claims. Exhibit 1 is stricken.

 Exhibit 2 is an email which references the exchange of documents made prior to the execution of the Settlement Agreement. The Complaint makes reference to these documents (e.g., Compl. ¶¶ 54-55); therefore, the email is consistent with allegations made in the Complaint. Exhibit 2 is allowed.

 Exhibits 3-6 are drafts of the Settlement Agreement and email correspondence related thereto. Facts and correspondence related to the negotiation of the Settlement Agreement are consistent with allegations in the Complaint that Defendants made repeated representations that they were unrelated and unaffiliated with West Suburban. (See, e.g., Compl. ¶¶ 63-66, 81, 89, 95, 119, 122.) Exhibits 3-6 are allowed.

 Exhibits 8-9 are billing records from Defendants' counsel. The Complaint makes reference to these documents. (Compl. ¶¶ 85, 91-96.) Further, the records are consistent with allegations in the Complaint that West Suburban and the Corporate Defendants were alter egos of Meisels and each other. (Id. ¶¶ 15, 89, 97, 106, 109-12, 115.) Exhibits 8-9 are allowed.*fn7

Defendants also request that pages 4-9 of Plaintiff's Response be stricken. (Mot. to Strike 2.) Defendants contend that "almost the entirety of [Plaintiff's] 'Background and Allegations' section in its Response consists of 'facts' that were not contained anywhere in the Complaint." (Reply in Supp. of Mot. ("Reply") 3.) While Plaintiff's citations to the record are sparse, the "Background and Allegations" section does make reference to the Complaint, its Exhibits, and the Exhibits attached to the Response that have been allowed. Nevertheless, to the extent the "Background and Allegations" section references facts inconsistent with the Complaint, its Exhibits, or the Exhibits attached to the Response that have been allowed, they are stricken.

In sum, for the reasons stated above, Defendants' Motion to Strike is granted in part and denied in part.

IV. DISCUSSION

A. The 2007 Lawsuit

In May 2007, based on the purported misrepresentations by the 2007 Lawsuit Defendants, PharMerica dismissed West Suburban from the 2007 Lawsuit and continued to provide it with goods and services. (Mot. 9; see Compl. ¶¶ 51-52, 58-59.) In its Complaint, Plaintiff alleges that "had [it] known that Meisels was still affiliated with West Suburban, it would not have continued to provide goods and services" to West Suburban, and it would not have "enter[ed] into the settlement agreement for the 2007 Lawsuit." (Compl. ¶¶ 60, 66.)

Defendants contend that PharMerica believed in 2007 before settling the 2007 Lawsuit that West Suburban and Meisels had conspired to enter into a sham transaction, so that Plaintiff cannot now claim Defendants made any misrepresentations. (Mot. 10-11.) Defendants assert that "the very 'scheme' and 'sham transaction' about which PharMerica complains that it learned about only after obtaining a judgment against West Suburban in September 2009 and had engaged in post-judgment discovery sometime thereafter, PharMerica had actually alleged in 2007-and continued to do business with West Suburban nonetheless!" (Id. 10.) Specifically, Defendants point to allegations made in the 2007 Lawsuit after West Suburban was dismissed:

In May 2006, West Suburban Care Center, LLC f/k/a Bloomingdale Terrace II, LLC ("West Suburban") assumed the operations of Bloomingdale from BCDM pursuant to an Operations Transfer Agreement ("OTA"). The consideration flowing to Bloomingdale and BCDM in return for the transfer from Bloomingdale and BCDM under the OTA was nominal at best, and may prove to be nothing. However, West Suburban leases the real property on which it operated from [Bloomingdale Terrace Realty, LLC ("BTR")], and transferred funds to BTR purportedly as rent payments. In actuality, the lease payments were greater than the value of the leased premises and were made to transfer funds to Mr. Meisels to the detriment of Bloomingdale's creditors, including [PharMerica]. Ultimately, the OTA and lease agreement were nothing more than a sham transaction designed to prefer Mr. Meisels to the detriment of [PharMerica] and other creditors. (Compl. Ex. 9 ("2007 Lawsuit Amended Complaint") ¶ 17.) Defendants contend that these allegations are "sadly and shockingly similar" to those in the instant Complaint:

In a document dated May 4, 2006, BCDM (owned and operated by Meisels) transferred operations of the Facility to West Suburban (purportedly owned and operated by Filippo), which was originally named Bloomingdale Terrace, II, LLC. The Operations Transfer Agreement shows that West Suburban paid virtually nothing for the operations of the Facility. However, in another document dated May 4, 2006, the entity owing the [Facility's real property](owned and operated by Meisels), entered into a Lease with West Suburban, the "new" owner of the operations. . . . The Lease shifted the amount West Suburban should have paid BCDM for the sale of the operations of the Facility into lease payments to a related real estate entity, Bloomingdale Terrace, as well as set up a way to siphon off funds from the operations after that date to Meisels. . . . Upon information and belief, the May 4, 2006 Operations Transfer was a sham and fraudulent transfer. In addition to shifting consideration to lease payments to thwart the creditors of the operations at that time, it also created a way for Meisels to siphon off money after the transaction in excessive rent payments. (Compl. ¶¶ 34-36, 38, 88) (internal citations omitted). Thus, Defendants argue that by attaching a copy of the 2007 Lawsuit Amended Complaint, Plaintiff has pled itself out of court. (Mot. 8-10); see Tamayo v. Blagojevich, 526 F.3d 1074, 1086 (7th Cir. 2008) ("Our case law recognizes that a party may plead itself out of court by pleading facts that establish an impenetrable defense to its claims. A plaintiff pleads himself out of court when it would be necessary to contradict the complaint in order to prevail on the merits. If the plaintiff voluntarily provides unnecessary facts in her complaint, the defendant may use those facts to demonstrate that she is not entitled to relief.") (internal citations omitted).

Plaintiff argues that Defendants mischaracterize the two pleadings. (Resp. 10.) "At the time PharMerica filed its Amended Complaint in the 2007 Lawsuit, it believed the sham was the structure of the [2006 Facility Transfer], and to whom the lease payments were being made (Meisels and his related entities), not who made them (West Suburban and Filippo)." (Id.) The Court agrees.

The 2007 Lawsuit alleged that all the consideration for the 2006 Facility Transfer was loaded into the lease payments to Bloomingdale Terrace with only nominal consideration to BCDM, all of which was designed to prefer Meisels at the detriment of BCDM's creditors. (2007 Lawsuit Amended Complaint ¶ 17.) The 2007 Lawsuit, however, does not allege that West Suburban or Filippo was a part of this fraud. Nor does it allege that PharMerica knew that Meisels was the real party in interest for West Suburban.

On the other hand, the instant Complaint alleges that the fraud was perpetuated when Meisels represented to the creditors of BCDM that the operations had been transferred to an unrelated entity, and that the insolvent BCDM could not pay PharMerica for the outstanding amounts owed, when in reality, Meisels remained in control of the Facility through his alter ego West Suburban. (Compl. ¶¶ 89-91, 97, 104.) Thus, in the instant Complaint, the structure of the 2006 Facility Transfer was not the sham; instead, the transfer itself was the sham transaction. (Id. ¶ 88.) It was not until PharMerica conducted post-Default Judgment discovery that it learned that the lease payments made by West Suburban were not only a way for Meisels to hide the operations ...


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