Owners of a Rockland travel service must return $67,500 from bowlers who had paid for victory vacations.
U.S. Bankruptcy Judge Kyu Young Paek ruled on Jan. 6 that most of the payments that the owners of Fun Bowl Vacations Inc. received from bowling leagues in 2020 and 2021, in the midst of the Covid-19 pandemic, must be cancelled.
The notion that the transfers were payments for earned income, the judge stated, “is devoid of evidentiary support and based solely on the defendants’ self-serving and conclusory statements.”
Bowlers paid Fun Bowl, of New City, to arrange for vacations for winners in each league. Fun Bowl booked airfare, hotels and other accommodations.
But when the Covid-19 epidemic began in early 2020, cruise lines, hotels, airlines and bowling alleys were shuttered. Yet, Fun Bowl continued to collect payments.
Several bowlers complained, and in 2021 Â New York Attorney General Letitia James demanded that Fun Bowl refund the bowlers. In August 2021, Fun Bowl returned $10,240.
The following month, the business petitioned for Chapter 7 liquidation, declaring $30,000 in assets and $0 in liabilities.
Bankruptcy trustee Marianne T. O’Toole sued the owners in 2023. Linda Heinemann, of Congers; Myrna Raboy, of Congers; and Josephine Mundy, of Haverstraw had received monthly cash payments for what they claimed were salaries and profits.
But Fun Bowl was “hopelessly insolvent, and grew more insolvent over the passage of the time,” O’Toole argued, while the owners “continued to collect payments from bowlers when it was impossible to provide the bowling vacations.”
The trustee accused the owners of transferring assets with the intent to defraud creditors and of providing nothing of value in exchange for the money.
Judge Paek granted summary judgment on the trustee’s motion to cancel $45,000 that was transferred to the owners in 2021, and for half of the $49,000 transferred in 2020.
But the owners established a genuine dispute about the value of their work in 2020, the judge noted. They had worked to keep the business afloat: answering calls and emails, cancelling bookings, trying to re-book trips, and paying business expenses.
Whether they provided reasonably equivalent value for the money they received, “is an issue for trial.”
