Kal
Liebowitz’s messy legal situation just got a lot messier.
In December of last year, the Trustee for the KSL Media Estate, David Gottlieb, sued Liebowitz, the media shop’s founder,
for a minimum of $6 million, charging him with gross negligence and breach of his fiduciary duties while running the agency, which filed for bankruptcy in September 2013.
Now another Trustee
— Sandra McBeth, who is overseeing Liebowitz’s separate personal bankruptcy — has sued him for trying to hide assets totaling $200,000 in the Trust of his disabled son, Keith, and
for trying to cover up what she termed was a “fraudulent transfer” by lying about the circumstances concerning the maneuver under oath at a hearing in February.
After shifting the
money to his son’s Trust, Liebowitz later “borrowed” nearly $50,000 from it — borrowings that McBeth asserted were “sham loans,” suggesting there was no intent to
repay them.
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In a March 30 filing, McBeth told the U.S. Bankruptcy Court hearing the case that she wants to recover the $200,000 (plus interest) so that the funds can be dispersed to
Liebowitz’s personal creditors.
Liebowitz filed for personal
bankruptcy in October 2014, a little more than a year after KSL Media went belly up. In her complaint, McBeth alleged that Liebowitz began plotting to protect his personal assets from creditors in
early 2012, when he wrote to an attorney that “an outside third party is going after my company, KSL Media, and me personally, for a monetary settlement.”
Liebowitz continued to
consult with attorneys and accountants about protecting his assets throughout the next year and on or about April 25, 2013 transferred $200,000 of his own money to the Keith Liebowitz 2001Trust. Less
than a month later, KSL hired a law firm specializing in bankruptcy proceedings. Two months later, McBeth asserts, as he was considering a personal bankruptcy filing, Liebowitz was advised that the
$200,000 transfer to his son’s Trust was likely fraudulent.
“Mr. Liebowitz transferred the $200,000 to the Keith Liebowitz Trust, with the intent to hinder, defraud or delay his
existing [and future] creditors,” McBeth charged in her complaint. Between July and September of last year, Liebowitz “borrowed” the nearly $50,000 from the Keith Liebowitz
Trust.
Asked at a hearing on Feb. 9 if he knew when he made the Trust transfer that KSL was in financial trouble and might go bankrupt, which it did about five months later, Liebowitz replied,
“No, there was no thought on, at that time, when I [transferred the $200,000], that KSL nor myself would go bankrupt.”
That was a lie, McBeth contended in court papers. “The
true facts are that at least by April 18, 2013, when the KSL Entities lost Bacardi as a client, Mr. Liebowitz participated in discussions and decisions regarding” a possible bankruptcy filing by
the company. Liebowitz lied, McBeth added, in an attempt to hide facts that would lead her and his creditors to conclude that the transfer was fraudulent.
Liebowitz also denied at the February
hearing that he had consulted with attorneys and accountants as far back as January 2012 about protecting personal assets, despite the fact that many of the conversations had a paper trail, McBeth
asserted.