A failed Las Vegas casino project has resulted in hundreds of millions on contractor claims against the title insurer.According to the story, Fidelity National leads a group of insurers in defending the title, and is countersuing associated corporations. The basis for the suit is that the parent corporation should be held liable for the losses of the subsidiary. While the lawyers for Soffer, the parent corporation claim that the Las Vegas venture is a separate entity, the attorneys for Fidelity see it differently.

“These corporate and partnership entities are a fiction created to deceive lenders, title companies and members of the public, and to hide assets and avoid liabilities,” it says in their suit. While corporate entities normally shield principals and other entities from liabilities, this case appears to have factors which could threaten the corporate veil.

 The Miami judge in the underlying bankruptcy case learned that the Vegas casino project transferred nearly $5 million to lenders on the eve of filing for bankruptcy protection. “It certainly smacks to me of a fraudulent transfer,” Judge A. Jay Cristol said.

Regardless, it is an interesting case to watch, as it has several important subjects; a large title claim, corporate protection issues, and bankruptcy issues.

Dave Pelligrinelli

TitleSearchBlog.com