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Allways East scion Edward Koller ordered to pay $342,000 to bankrupt bus company

Edward Koller has been ordered to pay $341,654 to Allways East Transportation Inc., his mother’s bankrupt bus company, for funds he received for doing nothing.

U.S. Bankruptcy Judge Robert D. Drain approved a default judgment Nov. 7 after Koller, who has addresses in Greenwich and Stamford, Connecticut, failed to defend himself against accusations of fraud and unjust enrichment.

Allways East insiders used the company as a “personal piggy bank,” according to an adversary proceeding filed last year against Koller, “funneling money out of the debtor’s estate that could have been used to pay … legitimate creditors.”

Allways EastThe Yonkers-based company operated a fleet of 300 school buses and employed 400 drivers, bus matrons, shop workers and administrators.

Founder and owner Judith Koller filed for Chapter 11 bankruptcy protection in 2016, declaring $3.1 million in assets and nearly $9 million in liabilities. Creditors claim they are owed more than $23 million.

“The debtor’s books and records grossly understated the true financial woes,” U.S. Trustee Howard P. Magaliff stated in the complaint against Edward Koller.

Magaliff was appointed trustee when the case was converted to Chapter 7 liquidation in 2017. He has since filed 38 adversary proceedings against family members and other recipients of company funds.

The bus company was essentially insolvent by 2013, according to Magaliff, but payments continued to flow for more than three years to family members, casinos, a cemetery, restaurants and other entities that had no legitimate business connections to Allways East. There also were large cash withdrawals for which no documentation has been found.

Edward Koller received $181,910 in payroll payments in 2013 and $66,059 in 2016, according to the complaint, when he lived in Atlanta and did no work for the company.

He received checks totaling $56,840 in 2014 and 2015 for no apparent services. Another $36,495 was transferred on his behalf to pay his personal attorney and for numerous online purchases.

The transfers were made, according to Magaliff, “because he was a family member and not because of any goods or services performed for the debtor.”

The trustee also has accused Marlaina Koller, Edward’s sister who assumed control in 2012, of diverting $24.2 million. Marlaina claims that the charges are barred by the statute of limitations and must be dismissed for lack of documentary evidence. The case is pending.

The trustee is seeking a default judgment against Judith Koller for more than $1.8 million.

As of Nov. 7, Magaliff’s representative, Jeffrey Traurig, states in a motion to recover the money, “no response or answer has been filed.”

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