In 2017, Rockland businessman Samuel Ehrenthal sold a $1 million Manhattan condominium for $20,000 to EEA Sterling Fund Ltd. That transfer, according to U.S. bankruptcy trustee Marianne T. O’Toole, was fraudulent.
On Aug. 3, O’Toole sued EEA Sterling in U.S. Bankruptcy Court, White Plains, to reverse the transaction for the benefit of creditors in Ehrenthal’s 2019 bankruptcy case.
Her complaint does not identify who owns EEA Sterling, nor does it name Ehrenthal as a defendant. But a pending lawsuit filed by a creditor last year accused Ehrenthal of fraudulently concealing the condo sale.
Ehrenthal, of Monsey, petitioned for Chapter 7 liquidation in 2019, declaring $1.8 million in assets and $14.6 million in liabilities.
He listed a $3 million debt to the Internal Revenue Service, for instance, though the IRS has since filed a claim for $5.2 million for unpaid personal income taxes from 2006 to 2014.
Ehrenthal owned Insured on Time Services Inc., an insurance agency in Spring Valley; a real estate holding company; and a financial adviser firm. EEA Sterling was not listed among his assets.
O’Toole’s complaint mirrors accusations made last year by Judith Gluck of Monsey. She sued Ehrenthal in bankruptcy court claiming that he owed her $1.6 million on a failed real estate deal with her late husband, Yitzchok Gluck.
Her complaint identified two Manhattan condominiums that Ehrenthal bought for $1.7 million in 2007, that were later appraised for more than $2 million, and that he sold to EEA Sterling for $35,000.
She claimed that EEA Sterling is a sham corporation formed to shield Ehrenthal’s assets.
Ehrenthal denied the accusations in his formal answer to the complaint. He said the condos were “transferred to a third party for fair consideration,” and with no intent to defraud. Any errors on his bankruptcy schedules, he said, were inadvertent.
O’Toole is concerned only with one of the Manhattan condos, at 325 Fifth Ave.
“There were numerous badges of fraud in connection with the property transfer,” the complaint states.
Ehrenthal transferred the condo to EEA Sterling when he was indebted to Gluck and other creditors, for instance. He was insolvent or became insolvent because of the transfer. The condo was transferred for less than fair value. Or, he “intended to incur … debts beyond his ability to pay as they matured.”
O’Toole, whose job is to protect the integrity of the bankruptcy process, is asking bankruptcy court to order New York City officials to strike the condo deed from the public record and order EEA Sterling to pay at least $1 million for the benefit of Ehrenthal’s creditors.
Ehrenthal’s bankruptcy attorney, J. Ted Donovan, did not respond to an email asking for comment on behalf of his client.
O’Toole is represented by Nassau County attorney Holly R. Holecek.
