A bankruptcy trustee is suing a Rockland real estate investor for allegedly making illegal transfers to companies he controlled in the year before he filed for bankruptcy protection.
Marianne T. O’Toole is seeking more than $1.4 million from Yehoishiah Rubin, of Spring Valley, and several companies he allegedly managed, in a complaint filed on Jan. 9 in U.S. Bankruptcy Court, White Plains.
Ruben’s Diamond Elite Park LLC allegedly transferred funds to affiliates, the complaint states, “with the actual intent to hinder, delay, or defraud one or more of its creditors.”
Diamond Elite Park, Spring Valley, is described in court records as a group of New York investors led by Ruben. In 2002, the company bought a vacant office building in Phoenix, Arizona  for $l0 million, to convert to an apartment building.
A Utah company that loaned $6.8 million for the project foreclosed on the property in 2023, claiming that the loan was in default.
Diamond Elite Park filed for Chapter 11 bankruptcy protection, to stop the foreclosure and in the hope of refinancing the project or selling the building. It declared $10 million in assets and $15.4 million in liabilities.
U.S. Bankruptcy Trustee William Harrington asked the court to dismiss the case or convert it to Chapter 7 liquidation, in the best interest of creditors. The property was in a state of extreme disrepair and was not generating revenue, he argued, and Diamond Elite Park had failed to pay bankruptcy fees or file monthly reports.
Last year, U.S. Bankruptcy Judge Sean H. Lane converted the case to Chapter 7 liquidation.
O’Toole’s role as Chapter 7 trustee is to collect and sell assets and distribute the proceeds to creditors.
She identified five companies that she characterized as insiders or affiliates of Diamond Elite Park controlled or managed by Rubin: Diamond Equity Ventures, Diamond Elite HHI, Kosher Palace, Pinal County Holdings, and Title Security Agency.
In the year before Diamond Elite Park filed for bankruptcy protection, O’Toole claims, Diamond Elite Park owed six creditors $674,163, yet transferred $1,316,576 to the affiliates.
O’Toole argues that the transactions were fraudulent because Diamond Elite Park knew that creditors held valid claims; it received nothing of equivalent value for the payments; it was not paying debts as they became due; its assets were unreasonably small compared to the transactions; and the company was insolvent or rendered insolvent by the transfers.
She also accused Ruben of breach of fiduciary duty for allegedly authorizing transfers to affiliates he managed.
O’Toole is demanding $895,689 from the Diamond Elite Park affiliates and $509,762 from Ruben.
