I previously wrote about the Lacava case in my 2018 article: Late-Arriving Member To LLC Results In Fraudulent Transfer Finding And Punitive Damages In Lacava. At that time, it involved UBS’s attempt to claw back $196,963 in loans that it had made to Albert Lacava before terminating him in 2008 when UBS itself got into financial trouble during that year’s crash. To avoid UBS collecting against his new investment company (AIM), Albert transferred most of the ownership interest in that company to his wife, Mary Ellen, and then was hit for an additional $98,481 in punitive damages and $50,635 in attorney’s fees for making a fraudulent transfer.
After that decision, and my article, was published, the litigation between UBS and the Lacavas continued, with the Ohio court appointing a receiver at UBS’s request to effectively take over AIM — and also allowing the receiver to lease the Lacavas’ home (where AIM was co-located as Albert’s company) and to evict tenants. This resulted in yet another appeal, and the Lacavas lost this one as well, but the Court refused opine on whether the Lacavas could be forced from their home or whether they could take advantage of their $125,000 in their residence, because the receiver had not yet attempted those actions and there was no record upon those issues for the court to rule.
What this does illustrate is the dangers of those who work at home in co-locating their business at their personal address, since if a receiver is appointed to run the business, that means that the receiver can come into the home and, well, run the business — including leasing out the space occupied by the business (“desk in hallway of hostile family for rent, cheap”).
This case also illustrates that while the courts give lip-service to the idea that the appointment of a receiver is an “extraordinary remedy” and a “remedy of last resort”, the courts don’t actually mean that. Instead, the courts simply require that the creditor give it the good ol’ college try in collecting before asking for the appointment of a receiver. Which is not necessarily a good thing, since receivers can greatly exacerbate (with their own fees) the costs of collection, and here the judgments was peanuts compared to the must larger cases in where receivers are typically appointed.
UBS Financial Services, Inc. v. Assurance Investment Mgt., LLC (UBS v. Lacava), 2019 Ohio 3661, 2019 WL 4316807 (Sept. 12, 2019). Full opinion at