Marriott Hotels, Washington, DC

Bankruptcy Fraud

Judgment but no money to pay

This was a particularly detailed accounting investigation where Counsel was looking to establish evidence of fraud by the contractor who was attempting to avoid a $3 million judgment in a fraudulent conveyance action. Marriott terminated the contractor and filed a lawsuit and soon thereafter the typical reaction occurred: The contractor began to funnel new business to an otherwise dormant sister corporation. These projects had contract values of some $81 million and their transfer ultimately lead to the contractor’s insolvent position.

By analyzing the timing of the relevant transactions and comparing those to business in the normal course, it was determined that the only possible reason for the transfer of assets was to avoid the judgment, a financial analysis designed to prove a negative.