A Rye Brook accountant who loaned hundreds of thousands of dollars to a local home builder has sued the borrower in bankruptcy court to get back more than $300,000.
Anthony Artabane’s ACCBA Holdings is asking the court to block Joseph J. Denn, owner of the defunct Cobble Creek Builders Inc., from using bankruptcy to clear his debts.
Denn purportedly claimed that he had no significant debts when he borrowed funds from Artabane, according to the complaint filed Oct. 11 in U.S. Bankruptcy Court, White Plains.
But Denn, also of Rye Brook, allegedly failed to disclose that Cobble Creek was delinquent on its American Express account; it was paying for cheerleading lessons for Denn’s daughter and for utilities for Denn’s home, and it was deducting the personal expenses as business expenses. Artabane also alleges that Denn took a small salary from Cobble Creek to reduce payroll taxes and instead took out cash that was not recorded as compensation.
“Mr. Denn denies the allegations of the complaint as stated as they are without merit,” his attorney, Jeffrey A. Reich, stated in an email. “He looks forward to being vindicated … by the Court.”
Artabane was a partner at PriceWaterhouseCoopers accounting firm until 2013, according to his LinkedIn profile, and has run his own accounting firm since then. He is a former chairman of the investment management committee of the New York State Society of CPAs.
He formed ACCBA Holdings in 2012 for “investments purposes,” the complaint states.
Artabane hired Denn in 1995 to build a house in Rye Brook and in 2012 to do more work on the house, according to the complaint, and over the years their wives became close friends and the families socialized with one another.
Denn began borrowing money from Artabane in 2015, beginning with $30,000 and then $100,000 loans to help finance construction projects. He continued borrowing through 2016, according to the complaint.
Denn repaid some of the debts or made interest payments, but by mid-2017 he had allegedly defaulted on several loans.
In 2019, Denn personally guaranteed a $200,000 debt, but defaulted on that obligation, according to the complaint.
ACCBA sued Denn in Westchester Supreme Court in 2019 and won a $286,511 judgment. In early 2020 the court scheduled a hearing on a proposed restraining order to direct Denn not to transfer funds from his financial accounts.
Two weeks later, Denn filed for Chapter 11 bankruptcy reorganization, automatically freezing the Westchester Supreme Court action.
Denn cited the restraining order and “significant loss of income resulting from the closing of … Cobble Creek Builders Inc. in 2018,” in an affidavit explaining why he needed bankruptcy protection.
He declared $1.4 million in assets, consisting mostly of his house in Rye Brook, and nearly $1.7 million in liabilities.
His monthly income totaled nearly $12,000 and his expenses totaled nearly $22,000 for a shortfall of $9,783 a month.
Artabane alleges that Denn got the ACCBA loans by false pretenses, false representations or fraud; that he transferred Cobble Creek assets to defraud ACCBA; and that he concealed or falsified business records, therefore he should not be allowed to discharge his debts.
ACCBA is represented by Manhattan attorneys David H. Wander and Alexander R. Tiktin.
