IN

 THE  UNITED  STATES  BANKRUPTCY  COURT  

FOR  THE  MIDDLE  DISTRICT  OF  PENNSYLVANIA  
 
IN  RE:     Chapter  11  
  Case  No.  5-­‐08-­‐bk-­‐50578  
TRANSCONTINENTAL  REFRIGERATED    
LINES,  INC.,    
   
Debtor  in  Possession.    
   
TRANSCONTINENTAL  REFRIGERATED   Adversary  No.    1-­‐10-­‐ap-­‐__________  
LINES,  INC.,  by  LAWRENCE  V.  YOUNG,    
ESQUIRE,  LIQUIDATING  AGENT,    
 
Plaintiff,  
 
versus  
 
NEW  PRIME,  INC.;  STEPHEN  P.  
HROBUCHAK;  JANIS  HROBUCHAK;  
NICOLE  HROBUCHAK;  STEPHEN  
HROBUCHAK;  DAVID  HROBUCHAK;  
LILY  LAKE  FAMILY  TRUST;  S&M  
LEASING,  INC.;  CHERRY  MARINE,  LLC;  
KEVIN  DAVIS;  JOHN  DOE,  ERIC  KALNIS;  
JAMES  DUGGAN;  HANDLER,  THAYER  &  
DUGGAN;  and  HANDLER  THAYER,  LLP;  
 
Defendants.  
 
 

ADVERSARY  COMPLAINT  
 

Comes  now  plaintiff,  debtor  Transcontinental  Refrigerated  Lines,  Inc.,  by  

Lawrence  V.  Young,  Esquire,  acting  in  his  capacity  as  appointed  Liquidating  Agent  
pursuant  to  the  First  Amended  Plan  of  Reorganization  of  Official  Unsecured  Creditors’  
Committee  of  Transcontinental  Refrigerated  Lines,  Inc.,  No.  5-­‐08-­‐bk-­‐50578  (July  22,  
2009),  which  was  confirmed  by  Order  entered  November  16,  2009,  and,  for  its  complaint  
against  defendants,  states  as  follows:  

 
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 Jurisdiction  &  Venue  
1. The  Court  has  jurisdiction  over  this  adversary  proceeding  pursuant  to  28  
U.S.C.  §§  157(a)  and  1334(b).  
2. This  matter  is  a  core  proceeding  pursuant  to  28  U.S.C.  §  157(b)(2).  
3. Venue  of  this  adversary  proceeding  is  proper  in  this  Bankruptcy  Court  
pursuant  to  28  U.S.C.  §  1409(a).  
The  Players  &  Their  Parts  
4. Plaintiff  Transcontinental  Refrigerated  Lines,  Inc.  (“Transcon”)  is  a  
corporation  organized  under  the  laws  of  Pennsylvania  and  debtor  in  possession  in  these  
Chapter  11  bankruptcy  proceedings.    Historically,  Transcon  participated  in  the  freight  
transportation  market  from  its  base  of  operations  in  Pittstown,  Pennsylvania.  
5. By  Order  entered  November  16,  2009,  this  Court  confirmed  the  First  
Amended  Plan  of  Reorganization  of  Official  Unsecured  Creditors’  Committee  of  
Transcontinental  Refrigerated  Lines,  Inc.,  filed  July  22,  2009  (“First  Amended  Plan”).    
Pursuant  to  Article  V.B  of  the  First  Amended  Plan,  Lawrence  V.  Young,  Esquire  was  
appointed  as  Liquidating  Agent  upon  the  December  28,  2009  effective  date  of  the  First  
Amended  Plan.    See  Exhibit  A  at  Art.  V.B.    
6. Pursuant  to  Article  IV  of  the  First  Amended  Plan,  all  property  of  the  

bankruptcy  estate  and  all  assets  of  Transcon  vested  in  the  liquidating  entity  under  the  
control  of  the  Liquidating  Agent.      Exhibit  A  at  Art.  IV.A.  
7. The  First  Amended  Plan  expressly  provides  that  “[a]ll  causes  of  action  under  
Chapter  5  of  the  Bankruptcy  Code,  all  Claims  against  third  parties,  and  all  other  causes  of  
action  and  rights  belonging  to  or  in  favor  of  [Transcon]  [are]  preserved  and  retained  for  
assertion  and  enforcement  solely  and  exclusively  by,  and  in  the  discretion  of,  the  
Liquidating  Agent.”    Exhibit  A  at  Art.  IV.A.  

 
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 8. Pursuant  to  the  First  Amended  Plan,  the  Liquidating  Agent  may,  in  his  “sole  
discretion,  determine  whether  to  .  .  .  initiate  any  litigation  on  behalf  of  the  Debtor  and  .  .  .  
the  manner  in  which  such  litigation  is  prosecuted.”    Exhibit  A  at  Art.  IV.D.  
9. Also  pursuant  to  the  First  Amended  Plan,  the  Liquidating  Trustee  may  
initiate  and  prosecute  all  such  litigation  “without  any  approval  of,  or  any  supervision  by,  
the  Bankruptcy  Court.”    Id.  
10. Accordingly,  Lawrence  V.  Young,  Esquire  exercises  the  authority  expressly  
conferred  in  the  First  Amended  Plan  and,  acting  in  his  capacity  as  court-­‐appointed  
Liquidating  Agent,  initiates  and  prosecutes  this  action  on  Transcon’s  behalf.  
11. The  claims  set  forth  in  this  action  each  arise  in  connection  with  the  
December  3,  2007  transaction  through  which  Transcon  transferred  the  bulk  of  its  assets  
to  defendant  New  Prime,  Inc.    See  Asset  Purchase  Agreement  (“APA”)  (Dec.  3,  2007)  
(Exhibit  B).    As  explained  below,  the  structuring  of  the  APA  and  its  related  transactions  
resulted  in  Transcon  receiving  no  consideration  whatsoever  for  many  of  its  assets,  
including  its  customer  lists,  vendor  lists,  trade  secrets,  pricing,  and  its  substantial  
goodwill  and  other  related  intangibles.  
12. After  learning  of  Transcon’s  asset  transfer—which  netted  Transcon  a  mere  
$29,000.00  in  cash  at  closing—certain  of  Transcon’s  numerous  creditors  filed  an  

involuntary  bankruptcy  petition  on  February  29,  2008.  

13. On  March  28,  2008,  the  Debtor  consented  to  the  entry  of  an  order  for  relief  
and,  on  March  31,  2008,  an  order  was  entered  converting  the  case  to  one  under  Chapter  11.  
14. Defendant  New  Prime,  Inc.  (“New  Prime”)  is  a  corporation  organized  
under  the  laws  of  Nebraska  that  maintains  a  principal  place  of  business  at  2740  North  
Mayfair,  P.O.  Box  4208,  Springfield,  Missouri  65808-­‐4208.  
15. On  December  3,  2007,  New  Prime  acquired  virtually  all  of  the  assets  of  
debtor  Transcon,  including  Transcon’s  valuable  customer  lists,  vendor  lists,  trade  secrets,  

pricing,  goodwill  and  other  intangible  property  pursuant  to  the  APA.  

 
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 16. At  the  same  time  it  acquired  Transcon’s  assets,  New  Prime  also  acquired  the  
Pittstown,  Pennsylvania  property  on  which  Transcon’s  facilities  were  located.    The  real  
estate  transaction  proceeded  according  to  a  separate  Agreement  to  Purchase  Real  Estate  
(“APRE”)  (Exhibit  C).      
17. The  real  estate  New  Prime  acquired  under  the  APRE  consisted  of  three  
separate  parcels,  one  of  which  was  conveyed  by  defendant  (and  Transcon  owner)  Stephen  
P.  Hrobuchak  (2.0  acres),  another  by  defendant  S&M  Leasing,  Inc.  (7.78  acres),  and  the  
third  by  domestic  trust,  Lily  Lake  Family  Trust  (“Lily  Lake”)1  (11.52  acres).  
18. In  exchange  for  the  three  parcels  aggregating  21.3  acres,  New  Prime  paid  
$5,902,000.00,  representing  a  per-­‐acre  price  in  excess  of  $275,000.00.  
19. In  addition  to  the  APA  and  APRE,  New  Prime  also  entered  into  a  Covenant  
Not  to  Compete  (“Covenant”)  with  defendant  Cherry  Marine,  LLC.    See  Exhibit  D.      
20. Like  the  APA  and  APRE,  the  Covenant  took  effect  on  December  3,  2007.      
Pursuant  to  the  Covenant,  New  Prime  paid  defendant  Cherry  Marine,  LLC  a  combined  
sum  of  $1,000,000.00,  $940,000.00  of  which  was  paid  in  exchange  for  the  promise  of  
Cherry  Marine  and  the  promise  of  Hrobuchak,  in  his  personal  capacity,  to  refrain  from  
competing  with  New  Prime  for  a  period  of  five  years  and  to  maintain  as  confidential  the  
valuable  business  information,  including  customer  lists,  vendor  lists,  trade  secrets,  

pricing,  employee  information,  and  other  vital  business  information  New  Prime  had  
acquired  from  Transcon.      
21. In  addition  to  serving  as  consideration  for  the  promises  described  above,  
the  remaining  $60,000.00  paid  to  Cherry  Marine,  LLC  served  as  consideration  for  New  
Prime’s  employment  of  Cherry  Marine,  LLC,  in  the  person  of  its  managing  member,  
defendant  Stephen  P.  Hrobuchak,  for  a  period  of  six  months  from  closing  of  the  APA.    

1
    Lily  Lake  Family  Trust,  which  is  referred  to  throughout  as  Lily  Lake,  no  longer  exists  and,  for  that  
reason,  is  not  a  defendant  in  this  matter.    Each  of  Lily  Lake’s  five  beneficiaries  are,  however,  named  as  
individual  defendants  based  on  the  nature  of  the  assets  Lily  Lake  distributed  upon  its  termination.    Also  
named  as  a  defendant  is  the  currently-­‐constituted  Lily  Lake  Family  Trust,  which,  being  organized  under  the  
laws  of  Cook  Island,  is  referenced  throughout  as  the  “Cook  Island  Trust.”  

 
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 22. Defendant  Stephen  P.  Hrobuchak  (“Hrobuchak”)  is  a  natural  person  
who  claims  as  his  principal  residence  an  ocean-­‐going  vessel  moored  at  various  and  sundry  
ports  of  call  throughout  the  year.    When  not  on  the  high  seas,  Hrobuchak  can  be  found  
either  in  Florida,  North  Carolina,  or  Pennsylvania.    When  in  Pennsylvania,  Hrobuchak  
stays  with  his  family  at  Box  180A,  Lily  Lake  Road,  Dalton,  Pennsylvania,  which  is  a  private  
residence  owned  by  nonparty  Stephen  P.  Hrobuchak  Family  Trust.  
23. At  all  times  material  to  this  complaint,  Hrobuchak  has  been  the  owner  of  
100%  of  Transcon’s  outstanding  stock.  
24. Hrobuchak  is  also  the  former  owner  of  the  2.0  acre  parcel  of  real  property  
New  Prime  acquired  under  the  APRE.  
25. Hrobuchak  initiated,  negotiated,  and  structured  the  transaction  through  
which  New  Prime  acquired  Transcon’s  assets  under  the  APA  and  the  real  property  
transferred  under  the  APRE.  
26. Hrobuchak  executed  the  APA  on  behalf  of  Transcon.  
27. Hrobuchak  executed  the  APRE  in  three  separate  capacities,  once  on  his  own  
individual  behalf,  again  in  his  capacity  as  President  of  S&M  Leasing,  Inc.,  and  a  third  time  
as  trustee  of  the  then-­‐United-­‐States-­‐based  Lily  Lake  Family  Trust  (“Lily  Lake”).  
28. In  addition  to  his  ownership  of  Transcon  and  the  2.0  acre  parcel  transferred  

under  the  APRE,  defendant  Hrobuchak,  as  described  more  fully  below,  maintains  
interests  in  each  of  the  three  other  entities  that  received  consideration  in  connection  with  
the  New  Prime  transaction,  including  fifty  percent  ownership  interests  in  Cherry  Marine,  
LLC  and  S&M  Leasing,  Inc.,  and  an  interest  as  a  beneficiary  of  Lily  Lake.  
29. Defendant  Janis  Hrobuchak  (“Mrs.  Hrobuchak”)  is  a  natural  person  
having,  on  information  and  belief,  an  address  of  Box  180A,  Lily  Lake  Road,  Dalton,  
Pennsylvania.      
30. Mrs.  Hrobuchak  is  the  wife  of  Hrobuchak  and,  as  explained  below,  

maintains  interests  in  each  of  the  three  entities  that  received  funds  in  connection  with  

 
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the  New  Prime  transaction,  i.e.,  fifty  percent  ownership  interests  in  Cherry  Marine,  LLC  
and  S&M  Leasing,  Inc.,  and  an  interest  as  a  beneficiary  of  Lily  Lake.  
31. Defendants  Nichole  Hrobuchak,  Stephen  Hrobuchak,  and  David  
Hrobuchak  (collectively,  with  Hrobuchak  and  Mrs.  Hrobuchak,  the  “Lily  Lake  
Beneficiaries”)  are  natural  persons  and  named  here  in  their  capacities  as  beneficiaries  of  
Lily  Lake,  which  received  value  in  connection  with  the  APRE  transaction  that  was  
subsequently  disbursed  to  the  Lily  Lake  Beneficiaries.    
32. On  information  and  belief,  Nichole  Hrobuchak  has  an  address  of  Box  180A,  
Lily  Lake  Road,  Dalton,  Pennsylvania.  
33. On  information  and  belief,  Stephen  Hrobuchak  has  an  address  of  Box  180A,  
Lily  Lake  Road,  Dalton,  Pennsylvania.  
34. On  information  and  belief,  David  Hrobuchak  has  an  address  of  Box  180A,  
Lily  Lake  Road,  Dalton,  Pennsylvania.  
35. Defendant  Lily  Lake  Family  Trust  (“Cook  Island  Trust”)  is  a  trust  
organized  under  the  laws  of  Cook  Island.    Mrs.  Hrobuchak  is  the  sole  beneficiary  of  the  
Cook  Island  Trust,  which  is  administered  by  a  foreign  entity  known  as  PacSouth.  
36. The  Cook  Island  Trust  was  created  upon  the  termination  of  Lily  Lake,  
which,  as  noted,  owned  the  third  piece  of  real  estate  transferred  to  New  Prime  pursuant  

to  the  APRE.      
37. On  information  and  belief,  the  Cook  Island  Trust  came  into  being  on  the  
APA’s  and  APRE’s  December  3,  2007  closing  date.    On  information  and  belief,  following  
distribution  to  the  Lily  Lakes  Beneficiaries,  Lily  Lake  dissolved  and  the  sums  attributable  
to  the  beneficial  interests  Hrobuchak  and  Mr.  Hrobuchak  held  in  Lily  Lake  were,  along  
with  other  unknown  assets,  ultimately  deposited  in  the  Cook  Island  Trust.  
38. Defendant  S&M  Leasing,  Inc.  (“S&M”)  is  a  corporation  organized  
pursuant  to  the  laws  of  Pennsylvania  having  a  principal  place  of  business  at  130  

Armstrong  Road,  Pittstown,  Pennsylvania  18640.  

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 39. Hrobuchak  and  Mrs.  Hrobuchak  each  own  50%  of  S&M’s  stock.  
40. S&M  was  the  owner  of  one  of  the  three  parcels  transferred  to  New  Prime  by  
means  of  the  December  3,  2007  APRE.      
41. Hrobuchak,  acting  in  his  capacity  as  President  of  the  corporation,  executed  
the  APRE  on  S&M’s  behalf.    
42. Defendant  Cherry  Marine,  LLC  (“Cherry  Marine”)  is  a  limited  liability  
company  organized  under  the  laws  of  Nevis  (a  36-­‐square-­‐mile  island  in  the  West  Indies).  
43. Hrobuchak  and  Mrs.  Hrobuchak,  each  own  an  equal  50%  interest  in  Cherry  
Marine.  
44. Hrobuchak  is  Cherry  Marine’s  managing  member.  
45. As  described  above,  in  connection  with  the  New  Prime  Transaction,  New  
Prime  employed  Cherry  Marine,  in  the  person  of  Hrobuchak,  for  a  period  of  six  months  in  
exchange  for  $60,000.00  in  compensation.      
46. In  exchange  for  that  employment,  and  an  additional  $940,000.00  payment,  
Cherry  Marine  and  Hrobuchak,  in  his  personal  capacity,  both  promised  New  Prime  to  
refrain  from  competing  with  New  Prime  for  a  period  of  five  years  and  to  maintain  as  
confidential  the  valuable  business  information  New  Prime  had  acquired  from  Transcon.  
47. At  the  December  3,  2007  closing,  New  Prime  disbursed  $940,000.00  for  the  

benefit  of  Cherry  Marine  pursuant  to  the  Covenant.    The  distribution  consisted  of  (1)  a  
$240,000.00  direct  deposit  into  Cherry  Marine’s  Swiss  bank  account,  and  (2)  a  
$700,000.00  deposit  into  escrow  for  subsequent  payment  to  Cherry  Marine.    All  or  
substantially  all  of  the  escrowed  $700,000.00  payment  was  subsequently  released  to  
Cherry  Marine.  
48. Defendant  Kevin  A.  Davis  (“Davis”)  is  a  natural  person  having  a  last-­‐
known  business  address  of  130  Armstrong  Road,  Pittstown,  Pennsylvania  18640.      
49. Davis  is  Transcon’s  former  Chief  Financial  Officer  (“CFO”).      

 
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 50. As  Transcon’s  CFO,  Davis  participated  in  negotiation  of  the  APA  and  was  
responsible  for  assuring  that  Transcon  received  consideration  for  the  transfer  of  its  
valuable  property,  which  included  Transcon’s  customer  lists,  vendor  lists,  trade  secrets,  
pricing,  goodwill  and  other  valuable  intangible  assets  to  which  the  APA  allocated  no  
value  whatsoever.  
51. Defendant  John  Doe  (“Doe”)  is  a  natural  person  having  a  place  of  
residence  and/or  business  in  Boston,  Massachusetts.  
52. Doe  is  an  accountant  who  advertises  and  provides  services  intended  to  
protect  the  personal  assets  of  high-­‐net-­‐worth  individuals.  
53. After  locating  Doe  by  means  of  an  internet  search,  Hrobuchak  contacted  
Doe  at  some  point  during  the  first  half  of  2007.  
54. On  information  and  belief,  Hrobuchak  contacted  Doe  for  the  purpose  of  
obtaining  advice  regarding  how  best  to  maximize  and  protect  his  personal  assets  in  
connection  with  his  efforts  to  market  Transcon  and/or  its  assets  to  interested  buyers.      
55. On  information  and  belief,  Doe  was  aware  that  Hrobuchak  was  seeking  to  
accumulate  and  protect  personal  assets  at  the  expense  of  Transcon’s  creditors.  
56. On  information  and  belief,  Doe  materially  assisted  Hrobuchak  in  the  
execution  of  that  scheme  by  referring  Hrobuchak  to  defendant  Handler,  Thayer  &  

Duggan.  
57. On  information  and  belief,  Doe  collected  a  monetary  fee  from  Hrobuchak  
as  remuneration  for  his  professional  services.      
58. On  information  and  belief,  defendant  Handler,  Thayer  &  Duggan  and/or  its  
individual  partners  compensated  Doe  for  referring  Hrobuchak  to  the  firm,  either  by  
making  a  monetary  payment  or  through  other  means.  
59. Defendant  Handler  Thayer  &  Duggan,  LLC  (“HTD”)  is  a  limited  liability  
company  organized  under  the  laws  of  Illinois,  having  a  principal  place  of  business  at  191  

North  Wacker  Drive  23rd  Floor  Chicago,  Illinois  60606.  

 
{00361715/1} 8  
 60. HTD  is  a  professional  service  firm  principally  engaged  in  the  practice  of  law.    
61. Defendant  Eric  Kalnis  is  a  natural  person  and  member  of  HTD  having  an  
office  address  of  191  North  Wacker  Drive  23rd  Floor  Chicago,  Illinois  60606.  
62. In  bankruptcy  proceedings,  Hrobuchak  has  testified  that  Kalnis  personally  
represented  Transcon  in  connection  with  the  New  Prime  transactions.  
63. Defendant  James  Duggan  is  a  natural  person  and  partner  of  HTD  having  
an  office  address  of  191  North  Wacker  Drive  23rd  Floor  Chicago,  Illinois  60606.  
64. In  bankruptcy  proceedings,  Hrobuchak  has  testified  that  Duggan  personally  
represented  Hrobuchak  on  asset  protection  matters  arising  in  connection  with  Transcon’s  
entry  into  the  APA,  Hrobuchak’s  entry  into  the  APRE  on  his  own  behalf,  in  his  capacity  as  
trustee  of  Lily  Lake  and  as  President  of  S&M,  Cherry  Marine’s  entry  into  the  Covenant,  
the  creation  of  off-­‐shore  asset  protection  entities  and  other  related  matters.  
65. Defendant  Handler  Thayer,  LLP  is  a  professional  services  firm  located  at  
191  N.  Wacker  Drive  23rd  Floor  Chicago,  Illinois  60606.      
66. Handler  Thayer  is,  on  information  and  belief,  a  successor  entity  to  HTD  and  
references  to  HTD  should  be  understood  to  include  Handler  Thayer  as  successor  entity.  
Statement  of  Facts  
67. In  early  2007,  Transcon  experienced  losses  running  into  the  millions  of  

dollars  and,  based  on  those  losses,  Hrobuchak  decided  that  it  had  come  time  to  sell.  
68. Once  he  decided  to  sell  the  business,  Hrobuchak  made  several  phone  calls  
to  contacts  he  had  within  the  freight  transportation  business,  including  New  Prime  and  at  
least  two  other  companies,  Navajo  Express  and  Priority.  
69. New  Prime,  in  the  person  of  its  owner,  Robert  Low,  expressed  interest  in  
acquiring  Transcon  and,  within  a  week,  Mr.  Low  visited  the  Transcon  facilities  to  discuss  
the  potential  acquisition.  

 
{00361715/1} 9  
 A. The  New  Prime  Transaction  
70. At  first,  the  proposed  transaction  called  for  the  sale  in  which  New  Prime  
would  acquire  all  of  Transcon’s  assets  and  debts.  
71. After  the  initial  negotiations,  however,  the  deal  “went  a  little  cool,”  and  a  
period  of  a  few  months  passed  without  any  activity  toward  a  transaction.  
72. At  some  point,  the  transaction  that  Transcon  and  New  Prime  contemplated  
moved  from  a  complete  sale  to  a  transfer  that  included  only  certain  assets.  
73. Throughout  the  negotiations  leading  up  to  the  December  2007  transaction,  
New  Prime  also  intended  to  acquire  the  property  on  which  Transcon’s  facilities  were  
located,  which,  as  described  above,  consisted  of  three  separate  parcels,  which  were  owned  
by  Hrobuchak  and  entities  that  he  controlled.  
74. At  some  point  in  the  month  to  month-­‐and-­‐a-­‐half  prior  to  the  December  3,  
2007  closing  date,  the  transaction  was  reduced  to  a  written  Asset  Purchase  Agreement.    
See  Exhibit  B.  
75. Despite  the  fact  that,  through  the  APA,  New  Prime  acquired  most  of  
Transcon’s  assets,  the  APA  obligated  New  Prime  to  pay  Transcon  only  an  unadjusted  
$886,273.00,  which  sum  was  allocated  only  among  the  specific  assets  identified  on  
Schedules  A  and  B  of  the  APA.    Schedule  A  included  assets  in  the  nature  of  licenses,  
permits,  insurance,  tires,  parts  and  fuel,  for  which  New  Prime  was  to  pay  an  unadjusted  

$786,273.00.    Schedule  B  included  assets  in  the  nature  of  office  equipment  for  which  New  
Prime  was  to  pay  Transcon  $100,000.00.  
76. In  addition  to  the  payments  attributable  to  the  Schedule  A  and  B  assets,  
New  Prime  also  purchased  the  four  equipment  leases  identified  on  Schedule  C,  for  which  
New  Prime  paid  $29,080.69.      
77. The  total  unadjusted  price  Transcon  was  to  receive  for  all  assets  it  was  
transferring  to  New  Prime  was  $915,353.00.  

78. At  closing,  the  sales  price  was  subjected  to  adjustments  for  (1)  increased  
debt  in  the  amount  of  $4,094.69;  (2)  a  $50,000.00  earnest  money  deposit;  (3)  a  “tire  

 
{00361715/1} 10  
adjustment”  of  $37,468.43;  (4)  a  “parts  adjustment”  of  $111,507.30;  (5)  a  $147,520.35  
adjustment  for  existing  owner/operator  liabilities;  (6)  existing  driver  payables  in  the  
amount  of  $38,325.00;  and  (7)  existing  employee  payables  in  the  amount  of  $196,718.48.  
79. In  addition  to  the  adjustments  that  deducted  money  from  the  closing  price,  
$300,000.00  of  the  purchase  price  was  to  be  escrowed.  
80. After  being  subjected  to  the  various  adjustments,  the  total  amount  due  
Transcon  at  closing  was  reduced  to  $29,018.75.  
81. Most  significantly,  the  transaction  between  Transcon  and  New  Prime  
allocated  no  value  whatsoever  to  many  of  the  assets  being  transferred,  including  the  most  
valuable  property  in  Transcon  possession—it’s  customer  lists,  vendor  lists,  trade  secrets,  
pricing,  goodwill  and  other  intangible  property.  
82. Despite  allocating  no  value  to  Transcon’s  intangible  property,  New  Prime’s  
owner,  Bob  Low,  made  it  clear  in  an  interview  that  New  Prime  was  not  merely  acquiring  
Transcon’s  assets,  but  acquiring  Transcon’s  customers  and  existing  business,  i.e.,  
acquiring  Transcon’s  goodwill:  

This   is   a   promising   opportunity   for   us   in   a   region   of   the  

country   that   compliments   our   freight   network   and   driver  
base.    .  .  .    We  appreciate  Mr.  Hrobuchak’s  confidence  in  us  to  
maintain   the   strong   customer   service   for   the   customers   that  
TRL  have  been  serving.  TRL  was  a  good  company  focused  on  
service,  and  I  am  confident  that  all  customers  and  the  drivers  
will  see  positive  benefits  from  this  transaction.  
Interview  printed  at  HiringTruckDrivers.com,  January  3,  2008  (Exhibit  D).  
83. Although  the  APA  allocated  no  value  to  the  goodwill  and  other  intangible  
assets  New  Prime  was  acquiring  from  Transcon,  New  Prime  nevertheless  recognized  that  
those  assets  possessed  considerable  value.  
84. Indeed,  New  Prime  considered  those  assets  to  be  so  valuable  that  it  paid  
Cherry  Marine  $1,000,000.00  to  protect  those  assets  from  disclosure  and  competition  for  a  

five  year  period.  

 
{00361715/1} 11  
 85. Of  the  $1,000,000.00  payment  New  Prime  made  to  Cherry  Marine,  fully  
$940,000.00  was  dedicated  solely  to  the  protection  and  preservation  of  assets  for  which,  
by  reference  to  the  APA,  New  Prime  paid  not  a  single  penny.  
86. Because  Transcon’s  goodwill  and  other  valuable  intangible  property  was  
transferred  without  consideration  in  an  intentional  effort  to  hinder,  delay,  or  defraud  
Transcon’s  creditors,  the  transaction  is  avoidable  as  fraudulent  to  Transcon’s  creditors.  
87. Alternatively,  because  Transcon’s  goodwill  and  other  valuable  intangible  
property  was  transferred  without  consideration  and  left  Transcon  insolvent,  the  
transaction  is  avoidable  as  fraudulent  to  Transcon’s  creditors.  
88. Alternatively,  because  Transcon’s  goodwill  and  other  valuable  intangible  
property  was  transferred  without  consideration  and  left  Transcon  with  unreasonably  
small  capital,  the  transaction  is  avoidable  as  fraudulent  to  Transcon’s  creditors.  

B. The  Value  Attributable  to  Transcon’s  Intangibles  

89. As  a  practical  matter,  however,  New  Prime  did  pay  for  the  goodwill  and  
other  valuable  intangible  property  it  acquired  from  Transcon,  it  just  didn’t  pay  Transcon.  
90. Instead  of  paying  Transcon  for  its  valuable  intangible  property,  Hrobuchak,  
with  New  Prime’s  agreement  and  acquiescence,  funneled  that  substantial  payment  to  
himself  and  his  family  members  through  two  different  means.  

91. First,  Hrobuchak,  with  New  Prime’s  agreement  and  acquiescence,  funneled  
a  portion  of  the  funds  that  New  Prime  was  willing  to  pay  to  acquire  Transcon’s  intangible  
property  through  the  APRE  by  radically  over-­‐valuing  the  real  estate  assets  to  be  conveyed  
in  that  agreement.      
92. With  New  Prime’s  agreement  and  acquiescence,  Hrobuchak  inflated  the  
portion  of  the  purchase  price  attributable  to  real  estate  value  and  depressed  that  portion  
attributable  to  the  assets  New  Prime  acquired  through  the  APA.  
93. Second,  in  addition  to  the  intentional  misallocation  of  purchase  price  

between  the  APA  and  APRE,  Hrobuchak  also  funneled  value  attributable  to  Transcon’s  

 
{00361715/1} 12  
goodwill  and  other  intangible  assets  into  the  Covenant  such  that  Cherry  Marine  received  
a  considerable  portion  of  the  value  attributable  to  those  assets  at  Transcon’s  expense.  

1. The  Scheme  to  Shift  Value  from  the  APA  to  the  APRE  
94. Hrobuchak  was  personally  responsible  for  the  decisions  regarding  the  
manner  in  which  the  total  purchase  price  was  allocated  among  the  assets  transferred  in  
the  APA  and  the  real  estate  transferred  under  the  APRE.  
95. Prior  to  allocating  the  value  of  $5,902,000.00  to  the  three  parcels  conveyed  
in  the  APRE,  Hrobuchak  did  not  have  the  property  appraised  for  the  purpose  of  
determining  fair  market  value.  
96. Although  Hrobuchak  purports  to  have  discussed  appraised  values  with  New  
Prime,  Hrobuchak  did  not  know  the  appraised  value  of  any  of  the  three  properties.  
97. Hrobuchak  did  not  conduct  any  investigation  to  determine  the  fair  market  
value  of  the  physical  assets  that  were  being  transferred  under  the  APA.    Instead,  
Hrobuchak  took  a  paper  and  pencil,  figured  out  what  he  wanted  for  the  property,  and  put  
a  number  on  it.  
98. In  allocating  the  total  price  New  Prime  was  willing  to  pay  for  the  Transcon  
assets  and  the  real  property,  Hrobuchak  radically  over-­‐valued  the  real  estate  in  which  he  
and  his  family  maintained  personal  interests.  

99. In  allocating  the  total  price  New  Prime  was  willing  to  pay  for  the  Transcon  
assets  and  the  real  property,  Hrobuchak  radically  under-­‐valued  the  assets  in  which  
Transcon  and  its  creditors  maintained  interests  and,  indeed,  did  not  place  any  value  at  all  
on  considerable  goodwill  and  other  intangible  property  being  conveyed  to  New  Prime.  
100. By  over-­‐allocating  value  to  the  real  property  in  which  Hrobuchak  and  his  
family  maintained  personal  interests,  Hrobuchak  defrauded  Transcon  and  its  creditors  by  
conveying  property  of  the  estate,  in  the  form  of  funds  New  Prime  paid  for  purposes  of  
acquiring  Transcon’s  goodwill  and  other  intangibles,  to  himself  and  his  family  members.  

 
{00361715/1} 13  
 101. At  closing,  Hrobuchak  received  property  of  the  estate,  in  the  form  of  value  
properly  attributable  to  Transcon  assets,  e.g.,  its  goodwill  and  other  intangible  property,  
in  exchange  for  the  sale  of  his  parcel  of  real  property  to  New  Prime.  
102. Hrobuchak  did  not  provide  Transcon  with  any  consideration,  let  alone  
reasonably  equivalent  consideration,  in  exchange  for  that  property  of  the  estate.  
103. At  closing,  S&M  received  property  of  the  estate,  in  the  form  of  value  
properly  attributable  to  Transcon  assets,  e.g.,  its  goodwill  and  other  intangible  property,  
in  exchange  for  the  sale  of  his  parcel  of  real  property  to  New  Prime.  
104. S&M  did  not  provide  Transcon  with  any  consideration,  let  alone  reasonably  
equivalent  consideration,  in  exchange  for  that  property  of  the  estate.  
105. At  closing,  Lily  Lake  received  property  of  the  estate,  in  the  form  of  value  
properly  attributable  to  Transcon  assets,  e.g.,  its  goodwill  and  other  intangible  property,  
in  exchange  for  the  sale  of  his  parcel  of  real  property  to  New  Prime.  
106. Lily  Lake  did  not  provide  Transcon  with  any  consideration,  let  alone  
reasonably  equivalent  consideration,  in  exchange  for  that  property  of  the  estate.  
107. The  property  of  the  estate  that  was  conveyed  without  consideration  to  
Hrobuchak,  S&M,  and  Lily  Lake  by  means  of  the  over-­‐allocation  of  value  to  real  property  
was  conveyed  with  the  specific  intent  to  hinder,  delay,  or  defraud  Transcon’s  creditors  

and  thereby  enrich  Hrobuchak  and  his  family  at  the  expense  of  those  creditors.  
108. Alternatively,  the  property  of  the  estate  that  was  conveyed  without  
consideration  to  Hrobuchak,  S&M,  and  Lily  Lake  by  means  of  the  over-­‐allocation  of  value  
to  real  property  left  Transcon  insolvent.      
109. Alternatively,  the  property  of  the  estate  that  was  conveyed  without  
consideration  to  Hrobuchak,  S&M,  and  Lily  Lake  by  means  of  the  over-­‐allocation  of  value  
to  real  property  left  Transcon  with  unreasonably  small  capital  such  that  Transcon  would  
be  obviously  unable  to  satisfy  the  claims  of  its  creditors.  

 
{00361715/1} 14  
 110. Following  Lily  Lake’s  receipt  of  its  portion  of  the  closing  price  under  the  
APRE,  Lily  Lake  made  a  final  distribution  of  trust  assets  among  the  Lily  Lake  Beneficiaries  
and  terminated.  
111. Thus,  property  of  the  estate  that  was  conveyed  without  consideration  to  
Lily  Lake  by  means  of  the  fraudulent  over-­‐allocation  of  value  to  real  property  was  
subsequently  transferred  to  the  Lily  Lake  Beneficiaries,  i.e.,  Hrobuchak,  Mrs.  Hrobuchak,  
Nichole  Hrobuchak,  Stephen  Hrobuchak,  and  David  Hrobuchak.  
112. Following  that  distribution,  certain  Lily  Lake  Beneficiaries  settled  the  Cook  
Island  Trust  with  property  of  the  estate  Lily  Lake  had  received  by  means  of  the  fraudulent  
over-­‐allocation  of  value  to  real  property.  
113. Accordingly,  whether  as  initial  transferees  or  as  subsequent  transferees,  
Hrobuchak,  S&M,  the  Lily  Lake  Beneficiaries,  and  the  Cook  Island  Trust  are  each  in  
possession  of  property  of  the  estate  subject  to  recovery  as  a  fraudulent  conveyance.  

2. The  Scheme  to  Funnel  Value  to  Cherry  Marine  

114. As  explained  above,  at  the  same  time  it  closed  on  the  APA  and  APRE,  New  
Prime  paid  $940,000.00  in  connection  with  the  Cherry  Marine  Covenant,  through  which  
New  Prime  received  the  promise  of  Cherry  Marine  and  the  promise  of  Hrobuchak,  in  his  
personal  capacity,  to  refrain  from  competing  with  New  Prime  for  a  period  of  five  years  

and  to  maintain  as  confidential  the  valuable  business  information,  including  customer  
lists,  vendor  lists,  trade  secrets,  pricing,  employee  information,  and  other  vital  business  
information  New  Prime  had  acquired  from  Transcon.  
115. New  Prime  paid  Cherry  Marine  an  additional  $60,000.00  as  consideration  
both  for  the  promises  Cherry  Marine  and  Hrobuchak  provided  in  the  Covenant  and  as  
compensation  for  its  employment  of  Cherry  Marine,  in  the  person  of  Hrobuchak,  for  a  
six-­‐month  period.  
116. The  $1,000,000.00  sum  that  New  Prime  paid  Cherry  Marine  was  paid  in  

connection  with  property  that,  as  far  as  the  APA  was  concerned,  had  no  value,  i.e.,  

 
{00361715/1} 15  
Transcon’s  customer  lists,  vendor  lists,  trade  secrets,  pricing,  goodwill  and  other  
intangible  property.  
117. As  also  explained  above,  however,  shortly  after  the  transaction,  New  Prime  
specifically  noted  its  acquisition  of  Transcon’s  goodwill  and  other  intangible  property.  
118. It  is  therefore  believed  and  alleged  that  the  value  New  Prime  transferred  to  
Cherry  Marine  was  transferred  in  consideration  of  Transcon’s  goodwill  and  other  
intangible  property.  
119. It  is  further  believed,  and  therefore  alleged,  that  Hrobuchak  extended  the  
promises  in  the  Covenant  through  Cherry  Marine  for  fraudulent  purposes.  
120. It  is  further  believed,  and  therefore  alleged,  that,  with  the  knowing  
assistance  of  asset  protection  professionals  as  described  below,  Hrobuchak  schemed  to  
funnel  the  proceeds  of  Transcon’s  sale  of  assets  including  goodwill  and  other  intangible  
property  to  Cherry  Marine,  such  that  Hrobuchak  and  the  entities  he  controlled  would  
profit  at  the  expense  of  Transcon  and  its  creditors.  
121. It  is  further  believed,  and  therefore  alleged,  that  New  Prime  was  a  knowing  
participant  in  Hrobuchak’s  fraudulent  scheme  to  funnel  value  attributable  to  Transcon  
assets  to  Cherry  Marine  such  that  Hrobuchak  and  the  entities  he  controlled  would  profit  
at  the  expense  of  Transcon  and  its  creditors.  

122. It  is  further  believed,  and  therefore  alleged,  that,  in  exchange  for  its  
knowing  participation  in  Hrobuchak’s  scheme,  New  Prime  acquired  certain  of  Transcon’s  
assets,  including  its  goodwill  and  other  intangible  property,  at  a  substantial  discount  to  
their  actual  value.  
123. It  is  further  believed,  and  therefore  alleged,  that  Cherry  Marine  was  a  
knowing  participant  in  Hrobuchak’s  scheme  to  funnel  value  attributable  to  Transcon  
assets  to  Cherry  Marine  such  that  Hrobuchak  and  the  entities  he  controlled  would  profit  
at  the  expense  of  Transcon  and  its  creditors.  

 
{00361715/1} 16  
 124. It  is  further  believed,  and  therefore  alleged,  that,  in  his  capacity  as  
Transcon’s  CEO,  defendant  Davis  was  a  knowing  participant  in  Hrobuchak’s  scheme  to  
funnel  value  attributable  to  Transcon  assets  to  Cherry  Marine  such  that  Hrobuchak  and  
the  entities  he  controlled  would  profit  at  the  expense  of  Transcon  and  its  creditors.  
125. It  is  further  believed,  and  therefore  alleged,  that  defendant  Davis  received  
some  form  of  remuneration  for  his  cooperation  in  Hrobuchak’s  scheme  to  funnel  value  
attributable  to  Transcon  assets  to  Cherry  Marine  such  that  Hrobuchak  and  the  entities  he  
controlled  would  profit  at  the  expense  of  Transcon  and  its  creditors.  

C. The  Role  of  the  Professionals  

126. As  Hrobuchak  testified  during  his  deposition,  HTD  provided  legal  services  
in  connection  with  the  New  Prime  Transaction.  
127. Hrobuchak  testified  that  defendant  Kalnis  ostensibly  represented  the  
interests  of  Transcon  in  connection  with  the  New  Prime  transaction.  
128. Hrobuchak  testified  that  defendant  Duggan  represented  the  interests  of  
Hrobuchak  in  connection  with  the  New  Prime  transaction.  
129. Accordingly,  HTD  simultaneously  provided  legal  counsel  to  Transcon  and  
Hrobuchak  with  regard  to  the  New  Prime  transaction.  
130. Transcon’s  interest  in  the  New  Prime  transaction  was  to  maximize  the  value  

it  received  in  exchange  for  the  assets  being  sold  under  the  APA.  
131. Hrobuchak’s  interest  in  the  New  Prime  transaction  was  to  (a)  maximize  the  
value  received  in  exchange  for  the  real  estate  being  sold  under  the  APRE;  (b)  maximize  
the  value  he  could  divert  from  Transcon  to  himself  and  entities  he  controlled;  and  (c)  
protect  personal  assets  from  the  risk  they  would  be  sought  by  creditors  of  Transcon  in  the  
wake  of  a  transaction  that  left  Transcon  insolvent.  
132. In  short,  the  interests  of  Transcon  and  Hrobuchak  were,  as  far  as  the  New  
Prime  transaction  was  concerned,  directly  adverse.  

 
{00361715/1} 17  
 133. Despite  the  obvious  adversity  between  Hrobuchak  and  Transcon  as  regards  
the  New  Prime  transactions,  Hrobuchak  testified  that  neither  Kalnis  nor  Duggan  ever  
advised  him  (or,  necessarily,  Transcon)  of  the  risks  attending  HTD’s  dual  representation  
of  Hrobuchak  and  Transcon.  
134. Based  on  Hrobuchak’s  testimony  and  the  manner  in  which  the  New  Prime  
transaction  was  structured,  it  is  believed,  and  therefore,  alleged  that  Kalnis,  Duggan,  and  
HDR  failed  to  protect  the  interests  of  their  client,  Transcon,  in  connection  with  the  New  
Prime  transaction.  
135. It  is  further  believed  and  alleged  that  the  failure  of  Kalnis,  Duggan,  and  
HDR  to  protect  Transcon’s  interest  in  the  New  Prime  transaction  was  intentional  and  
undertaken  for  purposes  of  maximizing  Hrobuchak’s  gain  and  their  own  fee.  
136. Based  on  Hrobuchak’s  testimony  and  the  manner  in  which  the  New  Prime  
transaction  was  structured,  it  is  believed,  and  therefore,  alleged  that  Kalnis,  Duggan,  and  
HTD  knowingly  assisted  in  the  development  of  a  fraudulent  scheme  to  funnel  value  
attributable  to  Transcon  assets  away  from  Transcon  and  its  creditors  and  to  Hrobuchak,  
his  family,  and  other  entities  in  which  Hrobuchak  maintained  a  financial  interest.  
137. It  is  further  believed,  and  therefore  alleged,  that  Kalnis,  Duggan,  and  HDR  
affirmatively  worked  with  Hrobuchak,  New  Prime  and  New  Prime’s  counsel  to  funnel  

assets  away  from  Transcon  and  its  creditors  despite  the  facts  that  HDR  represented  
Transcon  in  a  transaction  adverse  to  Hrobuchak  and  New  Prime.  
138. Based  on  Hrobuchak’s  testimony  and  the  manner  in  which  the  New  Prime  
transaction  was  structured,  it  is  believed,  and  therefore,  alleged  that  Kalnis,  Duggan,  and  
HTD  knowingly  assisted  in  the  execution  of  a  fraudulent  scheme  to  funnel  value  
attributable  to  Transcon  assets  away  from  Transcon  and  its  creditors  and  to  Hrobuchak,  
his  family,  and  other  entities  in  which  Hrobuchak  maintained  a  financial  interest.  
139. It  is  further  believed,  and  therefore  alleged,  that,  in  exchange  for  their  

knowing  assistance  in  the  development  and  execution  of  Hrobuchak’s  fraudulent  scheme,  

 
{00361715/1} 18  
Kalnis,  Duggan,  and  HTD  received  remuneration  in  the  form  of  a  fee  for  services,  the  
amount  and  form  of  which  is  currently  unknown.  
140. Hrobuchak  has  also  testified  that  he  was  referred  to  HTD  by  a  Boston  
accountant  he  located  during  the  course  of  an  internet  search.    The  identity  of  that  
accountant  being  the  subject  of  uncertainty  despite  Hrobuchak’s  promise  to  provide  the  
information,  the  accountant  is  joined  here  as  John  Doe.  
141. It  is  believed,  and  therefore  alleged,  that  Hrobuchak  sought  John  Doe’s  
advice  for  purposes  of  developing  and  executing  a  fraudulent  scheme  to  funnel  value  
attributable  to  Transcon  assets  away  from  Transcon  and  its  creditors  and  to  Hrobuchak,  
his  family,  and  other  entities  in  which  Hrobuchak  maintained  a  financial  interest.  
142. It  is  further  believed,  and  therefore  alleged,  that  John  Doe  knowingly  
participated  in  Hrobuchak’s  fraudulent  scheme  by  referring  Hrobuchak  to  HTD  for  
purposes  of  developing  and  executing  a  plan  to  funnel  value  attributable  to  Transcon  
assets  away  from  Transcon  and  its  creditors  and  to  Hrobuchak,  his  family,  and  other  
entities  in  which  Hrobuchak  maintained  a  financial  interest.  
143. It  is  further  believed,  and  therefore  alleged,  that,  in  exchange  for  his  
knowing  assistance  in  the  development  and  execution  of  Hrobuchak’s  fraudulent  scheme,  
John  Doe  received,  from  Hrobuchak  and/or  HTD,  remuneration  in  the  form  of  a  fee  for  

services,  the  amount  and  form  of  which  is  currently  unknown.  

COUNT  I  –  COMMON  LAW  FRAUD  

(versus  New  Prime,  Hrobuchak,  S&M    &  Cherry  Marine)  

144. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
145. New  Prime,  Hrobuchak,  and  S&M  intentionally  misrepresented  the  value  of  
the  real  estate  New  Prime  was  acquiring  through  the  APRE  by  allocating  an  amount  of  
the  total  purchase  price  to  the  real  estate  that  significantly  exceeded  its  market  value.  

146. New  Prime  and  Hrobuchak  intentionally  misrepresented  the  value  of  the  
Transcon  assets  New  Prime  was  acquiring  pursuant  to  the  APA  by  (1)  intentionally  

 
{00361715/1} 19  
excluding  Transcon’s  valuable  goodwill  and  other  intangible  assets  from  the  APA’s  
schedules  even  though  New  Prime  was,  in  fact,  acquiring  those  assets  and  (2)  allocating  a  
significantly  lower  portion  of  the  purchase  price  to  the  assets  transferred  under  the  APA  
than  warranted  by  reference  to  the  value  of  the  assets  actually  transferred.  
147. New  Prime,  Hrobuchak,  and  Cherry  Marine  intentionally  misrepresented  
the  purpose  of  the  Covenant’s  $1,000,000.00  payment  as  being  to  protect  New  Prime  from  
competition  and  to  protect  the  confidential  information,  goodwill  and  other  intangible  
property  New  Prime  had  acquired  from  Transcon.  
148. In  reality,  the  $1,000,000.00  payment  New  Prime  made  to  Cherry  Marine  
pursuant  to  the  Covenant  was  a  payment  made  on  account  of  New  Prime’s  acquisition  of  
Transcon’s  goodwill  and  other  intangible  property.      
149. Each  of  the  misrepresentations  made  by  New  Prime,  Hrobuchak,  S&M  
and/or  Cherry  Marine  was  memorialized  and  uttered  in  written  documents  prepared  in  
connection  with  the  New  Prime  transaction.  
150. In  addition  to  the  forgoing  affirmative  misrepresentations,  New  Prime,  
Hrobuchak,  S&M  and  Cherry  Marine  all  concealed  material  facts,  including  the  actual  
value  of  the  real  estate  being  transferred  under  the  APRE  and  the  reality  that  the  value  
New  Prime  was  paying  for  Transcon’s  goodwill  and  other  intangible  property  was  being  

diverted  to  Cherry  Marine  for  the  personal  benefit  of  Hrobuchak  and  Mrs.  Hrobuchak.  
151. New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine  intended  that  Transcon  
rely  on  the  foregoing  misrepresentations  as  accurately  reflecting  the  nature  of  the  
Transcon  assets  transferred  to  New  Prime,  the  value  properly  attributable  to  those  assets,  
the  value  properly  attributable  to  the  real  estate  New  Prime  was  acquiring,  and  the  
purpose  of  the  Cherry  Marine  Covenant.  
152. Transcon  did  rely  on  the  foregoing  misrepresentations  accurately  reflecting  
the  nature  of  the  Transcon  assets  transferred  to  New  Prime,  the  value  properly  

 
{00361715/1} 20  
attributable  to  those  assets,  the  value  properly  attributable  to  the  real  estate  New  Prime  
was  acquiring,  and  the  purpose  of  the  Cherry  Marine  Covenant.  
153. Because  the  New  Prime  transaction  resulted  in  Transcon  failing  to  receive  
any  value  in  connection  with  the  transfer  of  perhaps  its  most  valuable  assets,  i.e.,  its  
goodwill  and  other  intangible  property,  Transcon  incurred  damages  in  an  amount  to  be  
proven  at  trial  (but  in  no  event  less  than  the  full  value,  as  of  December  3,  2007,  of  the  
assets  transferred),  as  a  proximate  result  of  its  reliance  on  the  forgoing  
misrepresentations  of  New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine.  
154. New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine  each  profited  as  a  direct  
result  of  the  foregoing  misrepresentations,  which  were  specifically  intended  to  enrich  
New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine  at  the  expense  of  Transcon  and  its  
creditors.  
155. The  conduct  of  New  Prime,  Hrobuchak,  S&M  and  Cherry  Marine  was  
intentional  and  outrageous  such  as  supports  an  award  of  exemplary  damages.  
WHEREFORE  plaintiff  requests  that  the  Court  enter  a  judgment  in  Transcon’s  
favor  finding  New  Prime,  Hrobuchak,  S&M  and  Cherry  Marine  liable  for  their  fraudulent  
misrepresentation  and  awarding  Transcon  actual  damages  in  an  amount  to  be  proven  at  
trial,  punitive  damages,  and  all  such  other  relief  as  the  Court  deems  just  and  proper.  

COUNT  II  –  CIVIL  CONSPIRACY  

(versus  New  Prime,  Hrobuchak,  S&M,  Cherry  Marine,    
Davis,  Doe,  Kalnis,  Duggan,  &  HTD)  

156. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
157. As  set  forth  above,  New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine  made  
fraudulent  misrepresentations  on  which  Transcon  relied  to  its  detriment  when  it  
executed  the  APA.  
158. New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine  combined  with  a  

common  purpose  to  perform  the  unlawful  act  of  defrauding  Transcon  and,  by  extension,  

 
{00361715/1} 21  
its  creditors,  out  of  value  properly  attributable  to  Transcon  assets,  including  its  goodwill  
and  other  intangible  assets.  
159. The  misrepresentations  contained  in  the  APA,  the  APRE,  and  the  Covenant  
constitute  overt  acts  committed  in  pursuit  of  the  common  unlawful  purpose.  
160. As  explained  above,  as  a  result  of  its  reliance  on  the  misrepresentations  of  
New  Prime,  Hrobuchak,  S&M,  and  Cherry  Marine,  Transcon  has  suffered  actual  damages  
in  an  amount  to  be  proven  at  trial  but  in  no  event  less  than  the  full  value,  as  of  December  
3,  2007,  of  the  assets  transferred,  including  the  full  value  of  its  goodwill  and  other  
valuable  intangible  property.  
161. On  information  and  belief,  defendants  Doe,  Davis,  Kalnis,  Duggan,  and  
HTD  combined  with  New  Prime,  Hrobuchak,  and/or  Cherry  Marine  in  furtherance  of  the  
scheme  to  defraud  Transcon  and,  by  extension,  its  creditors,  out  of  value  properly  
attributable  to  Transcon  assets,  including  its  goodwill  and  other  intangible  assets.  
162. On  information  and  belief,  defendant  Doe  committed  an  overt  act  in  
furtherance  of  the  conspiracy  when,  after  learning  of  Hrobuchak’s  fraudulent  intent,  Doe  
referred  Hrobuchak  to  HDR  for  legal  assistance  with  his  scheme.  
163. On  information  and  belief,  defendant  Davis  committed  an  overt  act  in  
furtherance  of  the  conspiracy  when  Davis  assisted  New  Prime  and  Hrobuchak  in  their  

efforts  to  misallocate  value  between  the  APA  and  APRE  and  thereby  funnel  value  properly  
attributable  to  Transcon  assets  to  Hrobuchak,  his  family,  and  entities  in  which  he  
maintained  a  financial  interest.  
164. On  information  and  belief,  defendants  Kalnis,  Duggan,  and  HTD  
committed  overt  acts  in  furtherance  of  the  conspiracy  when  they  agreed  to  represent  both  
Transcon  and  Hrobuchak,  as  well  as  the  entities  he  controlled,  for  purposes  of  benefiting  
Hrobuchak  (and  themselves)  at  the  expense  of  Transcon  and  its  creditors.      
165. On  information  and  belief,  Kalnis,  Duggan,  and  HTD  committed  additional  

overt  acts  by  advising  Hrobuchak  with  respect  to  the  misallocation  of  value  between  the  

 
{00361715/1} 22  
APA  and  APRE,  the  creation  of  and  entry  into  the  Covenant  between  New  Prime  and  
Cherry  Marine,  the  post-­‐closing  dissolution  of  Lily  Lake,  the  creation  and  funding  of  the  
Cook  Island  Trust,  and  numerous  other  legal  strategies  designed  to  protect  assets  
siphoned  out  of  Transcon  in  connection  with  the  New  Prime  transaction.  
166. Transcon  suffered  actual  damages  in  an  amount  to  be  proven  at  trial  (but  in  
no  event  less  than  the  full  value,  as  of  December  3,  2007,  of  the  assets  transferred)  as  a  
proximate  result  of  defendants’  conspiracy  to  defraud  Transcon.  
167. The  conspiratorial  conduct  of  New  Prime,  Hrobuchak,  S&M,  Cherry  Marine,  
Davis,  Doe,  Kalnis,  Duggan,  and  HTD  was  intentional  and  outrageous  such  as  supports  an  
award  of  exemplary  damages.  
WHEREFORE  plaintiff  requests  that  the  Court  enter  a  judgment  in  Transcon’s  
favor  finding  New  Prime,  Hrobuchak,  S&M,  Cherry  Marine,  Davis,  Doe,  Kalnis,  Duggan,  
and  HTD  liable  for  conspiracy  to  defraud  and  awarding  Transcon  actual  damages  in  an  
amount  to  be  proven  at  trial,  punitive  damages,  and  all  such  other  relief  as  the  Court  
deems  just  and  proper.  

COUNT  III  –  FRAUDULENT  TRANSFER  PURSUANT  TO  11  U.S.C.  §  548(a)(1)(A)  

(versus  New  Prime)  

168. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  

169. Transcon  received  far  less  than  reasonably  equivalent  value  in  connection  
with  the  transfer  of  its  assets.      
170. Indeed,  Transcon  received  no  consideration  at  all  in  connection  with  the  
transfer  of  its  goodwill  and  other  intangible  property  to  New  Prime.  
171. The  transaction  with  New  Prime  was  made  with  the  specific  intent  to  
hinder,  delay  or  defraud  Transcon’s  existing  creditors  and,  in  so  doing,  enrich  Hrobuchak  
and  his  family  at  the  expense  of  those  creditors.  

172. Accordingly,  the  transfer  of  Transcon’s  assets,  including  the  transfer  of  its  
goodwill  and  other  intangible  property,  was  constructively  fraudulent  as  to  Transcon’s  

 
{00361715/1} 23  
creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  recover  the  value  of  the  
transfers  for  the  benefit  of  the  Transcon  estate.  
WHEREFORE  plaintiff  respectfully  requests  that  this  Court  enter  a  judgment  
ordering  that  New  Prime  turn  over,  for  the  benefit  of  the  estate,  the  full  value  of  assets,  
including  goodwill  and  other  intangible  property,  New  Prime  received  without  payment  
of  consideration,  together  with  all  such  other  relief  as  the  Court  deems  just  and  proper.  

COUNT  IV  –  FRAUDULENT  TRANSFER  PURSUANT  TO  11  U.S.C.  §  548(a)(1)(B)  

(versus  New  Prime)  

173. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
174. Transcon  received  far  less  than  reasonably  equivalent  value  in  connection  
with  the  transfer  of  its  assets.  
175. Indeed,  Transcon  received  no  consideration  at  all  in  connection  with  the  
transfer  of  its  goodwill  and  other  intangible  property  to  New  Prime.  
176. The  transaction  with  New  Prime  resulted  in  Transcon’s  insolvency,  i.e.,  left  
Transcon  in  a  financial  condition  such  that  the  sum  of  its  debts  exceeded  all  of  Transcon’s  
remaining  property  at  a  fair  valuation.  
177. Alternatively,  the  transaction  with  New  Prime  left  Transcon  with  
unreasonably  small  capital  such  that  Transcon  would  be  obviously  unable  to  satisfy  the  

claims  of  its  creditors.  

178. Accordingly,  the  transfer  of  Transcon’s  assets,  including  the  transfer  of  its  
goodwill  and  other  intangible  property,  was  constructively  fraudulent  as  to  Transcon’s  
creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  recover  the  value  of  the  
transfers  for  the  benefit  of  the  Transcon  estate.  
WHEREFORE,  plaintiff  respectfully  requests  that  this  Court  enter  a  judgment  
ordering  that  New  Prime  turn  over,  for  the  benefit  of  the  estate,  the  full  value  of  assets,  

including  goodwill  and  other  intangible  property,  New  Prime  received  without  payment  
of  consideration,  together  with  all  such  other  relief  as  the  Court  deems  just  and  proper.  

 
{00361715/1} 24  
 COUNT  V  –  FRAUDULENT  TRANSFER  PURSUANT  TO  11  U.S.C.  §  548(a)(1)(A)  
(versus  Hrobuchak,  S&M,  Lily  Lake  Beneficiaries,  Cook  Island  Trust)  

179. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
180. Upon  closing  of  the  APRE,  Hrobuchak,  S&M,  and  Lily  Lake  received  
property  of  the  estate,  in  the  form  of  value  properly  attributable  to  Transcon  assets  
including  goodwill  and  other  intangible  property,  in  exchange  for  the  sale  of  real  property  
to  New  Prime.  
181. Neither  Hrobuchak,  S&M,  nor  Lily  Lake  provided  Transcon  with  any  
consideration,  let  alone  reasonably  equivalent  consideration,  in  exchange  for  the  property  
of  the  estate  they  received  in  connection  with  the  APRE.  
182. The  property  of  the  estate  that  was  conveyed  without  consideration  to  
Hrobuchak,  S&M,  and  Lily  Lake  by  means  of  the  over-­‐allocation  of  value  to  real  property  
was  conveyed  with  the  specific  intent  to  hinder,  delay,  or  defraud  Transcon’s  creditors  
and  thereby  enrich  Hrobuchak  and  his  family  at  the  expense  of  those  creditors.  
183. Accordingly,  Hrobuchak,  S&M,  and  Lily  Lake’s  receipt  of  property  of  the  
estate  was  the  product  of  a  transfer  that  was  intentionally  fraudulent  as  to  Transcon’s  
creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  recover  the  value  of  the  
transfer  for  the  benefit  of  the  Transcon  estate.  

184. Through  a  distribution,  Lily  Lake  subsequently  transferred  to  the  Lily  Lake  
Beneficiaries  the  property  of  the  estate  it  received  in  connection  with  the  APRE.  
185. Lily  Lake  received  no  consideration  for  the  property  of  the  estate  it  
transferred  to  the  Lily  Lake  Beneficiaries.  
186. Nor  did  the  Lily  Lake  Beneficiaries  receive  the  transfer  in  good  faith  without  
knowledge  of  the  voidability  of  the  transfer.    
187. Accordingly,  the  Lily  Lake  Beneficiaries’  received  property  of  the  estate  that  
the  initial  transferees  received  as  the  result  of  product  of  a  transfer  that  was  intentionally  

fraudulent  as  to  Transcon’s  creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  

 
{00361715/1} 25  
recover  the  value  of  the  property  of  the  estate  that  Lily  Lake  distributed  to  the  Lily  Lake  
Beneficiaries  for  the  benefit  of  the  Transcon  estate.  
188. On  information  and  belief,  certain  Lily  Lake  Beneficiaries,  including,  at  
least,  Hrobuchak  and  Mrs.  Hrobuchak,  subsequently  transferred  all  or  a  portion  of  the  
property  of  the  estate  they  received  from  Lily  Lake  to  the  Cook  Island  Trust.  
189. The  Lily  Lake  Beneficiaries  who  transferred  property  of  the  estate  to  the  
Cook  Island  Trust  received  no  consideration  for  the  property  of  the  estate.  
190. Nor  did  the  Cook  Island  Trust  receive  the  property  of  the  estate  in  good  
faith  without  knowledge  of  the  voidability  of  the  transfer.    
191. Accordingly,  the  Cook  Island  Trust  received  property  of  the  estate  that  the  
initial  and  mediate  transferees  received  as  the  result  of  a  transfer  that  was  intentionally  
fraudulent  as  to  Transcon’s  creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  
recover,  for  the  benefit  of  the  Transcon  estate,  the  value  of  the  property  of  the  estate  that  
Lily  Lake  transferred  to  the  Lily  Lake  Beneficiaries.  
WHEREFORE  plaintiff  respectfully  requests  that  this  Court  enter  a  judgment  
requiring  Hrobuchak,  S&M,  the  Lily  Lake  Beneficiaries,  and  the  Cook  Island  Trust  to  turn  
over  for  the  benefit  of  the  estate  the  full  value  of  the  assets,  goodwill  and  other  intangible  
property  they  received  as  a  result  of  the  intentional  over-­‐allocation  of  value  to  the  APRE,  

together  with  all  such  other  relief  as  the  Court  deems  just  and  proper.  

COUNT  VI  –  FRAUDULENT  TRANSFER  PURSUANT  TO  11  U.S.C.  §  548(a)(1)(B)  

(versus  Hrobuchak,  S&M,  Lily  Lake  Beneficiaries,  Cook  Island  Trust)  

192. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
193. Upon  closing  of  the  APRE,  Hrobuchak,  S&M,  and  Lily  Lake  received  
property  of  the  estate,  in  the  form  of  value  properly  attributable  to  Transcon’s  assets  
including  goodwill  and  other  intangible  property,  in  exchange  for  the  sale  of  real  property  

to  New  Prime.  

 
{00361715/1} 26  
 194. Neither  Hrobuchak,  S&M,  nor  Lily  Lake  provided  Transcon  with  any  
consideration,  let  alone  reasonably  equivalent  consideration,  in  exchange  for  the  property  
of  the  estate  they  received  in  connection  with  the  APRE.  
195. The  transaction  through  which  property  of  the  estate  was  conveyed  without  
consideration  to  Hrobuchak,  S&M,  and  Lily  Lake  by  means  of  the  over-­‐allocation  of  value  
to  real  property  left  Transcon  insolvent,  i.e.,  left  Transcon  in  a  financial  condition  such  
that  the  sum  of  its  debts  exceeded  all  of  Transcon’s  remaining  property  at  a  fair  valuation.  
196. Alternatively,  the  transaction  through  which  property  of  the  estate  was  
conveyed  without  consideration  to  Hrobuchak,  S&M,  and  Lily  Lake  by  means  of  the  over-­‐
allocation  of  value  to  real  property  left  Transcon  with  unreasonably  small  capital  such  
that  Transcon  would  be  obviously  unable  to  satisfy  the  claims  of  its  creditors.  
197. Accordingly,  Hrobuchak,  S&M,  and  Lily  Lake’s  receipt  of  property  of  the  
estate  was  the  product  of  a  transfer  that  was  constructively  fraudulent  as  to  Transcon’s  
creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  recover  the  value  of  the  
transfer  for  the  benefit  of  the  Transcon  estate.  
198. Through  a  distribution,  Lily  Lake  subsequently  transferred  to  the  Lily  Lake  
Beneficiaries  the  property  of  the  estate  it  received  in  connection  with  the  APRE.  
199. Lily  Lake  received  no  consideration  for  the  property  of  the  estate  it  

transferred  to  the  Lily  Lake  Beneficiaries.  

200. Nor  did  the  Lily  Lake  Beneficiaries  receive  the  transfer  in  good  faith  without  
knowledge  of  the  voidability  of  the  transfer.    
201. Accordingly,  the  Lily  Lake  Beneficiaries’  received  property  of  the  estate  that  
the  initial  transferees  received  as  the  result  of  product  of  a  transfer  that  was  intentionally  
fraudulent  as  to  Transcon’s  creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  
recover  the  value  of  the  property  of  the  estate  that  Lily  Lake  distributed  to  the  Lily  Lake  
Beneficiaries  for  the  benefit  of  the  Transcon  estate.  

 
{00361715/1} 27  
 202. On  information  and  belief,  certain  Lily  Lake  Beneficiaries,  including,  at  
least,  Hrobuchak  and  Mrs.  Hrobuchak,  subsequently  transferred  all  or  a  portion  of  the  
property  of  the  estate  they  received  from  Lily  Lake  to  the  Cook  Island  Trust.  
203. The  Cook  Island  Trust  paid  no  consideration  for  the  property  of  the  estate  it  
received  from  certain  Lily  Lake  Beneficiaries.  
204. Nor  did  the  Cook  Island  Trust  receive  the  property  of  the  estate  in  good  
faith  without  knowledge  of  the  voidability  of  the  transfer.    
205. Accordingly,  the  Cook  Island  Trust  received  property  of  the  estate  that  the  
initial  and/or  mediate  transferees  received  in  connection  with  a  transfer  intentionally  
fraudulent  as  to  Transcon’s  creditors  and,  as  such,  the  Liquidating  Agent  is  entitled  to  
recover,  for  the  benefit  of  the  Transcon  estate,  the  value  of  the  property  of  the  estate  that  
certain  Lily  Lake  Beneficiaries  transferred  to  the  Cook  Island  Trust.      
WHEREFORE  plaintiff  respectfully  requests  that  this  Court  enter  a  judgment  
requiring  Hrobuchak,  S&M,  the  Lily  Lake  Beneficiaries,  and  the  Cook  Island  Trust  to  turn  
over  for  the  benefit  of  the  estate  the  full  value  of  the  goodwill  and  other  intangible  
property  they  received  as  a  result  of  the  intentional  over-­‐allocation  of  value  to  the  APRE,  
together  with  all  such  other  relief  as  the  Court  deems  just  and  proper.  

COUNT  VII  –  FRAUDULENT  TRANSFER  PURSUANT  TO  11  U.S.C.  §  548(a)(1)(A)  

(versus  Cherry  Marine,  Hrobuchak  &  Mrs.  Hrobuchak)  

206. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
207. Upon  receipt  of  the  $1,000,000.00  payment  made  under  the  Covenant,  
Cherry  Marine  received  property  of  the  estate,  in  the  form  of  value  properly  attributable  
to,  and,  on  information  and  belief,  paid  on  account  of,  Transcon’s  assets  including  
goodwill  and  other  intangible  property,  in  exchange  for  promises  made  by  Cherry  Marine  
and  Hrobuchak  in  his  individual  capacity.  

 
{00361715/1} 28  
 208. Cherry  Marine  did  not  provide  Transcon  with  any  consideration,  let  alone  
reasonably  equivalent  consideration,  in  exchange  for  the  property  of  the  estate  it  received  
in  connection  with  the  Covenant.  
209. The  property  of  the  estate  that  was  conveyed  without  consideration  to  
Cherry  Marine,  in  the  form  of  value  properly  attributable  to,  and,  on  information  and  
belief,  paid  on  account  of,  Transcon’s  assets  including  goodwill  and  other  intangible  
property,  was  conveyed  to  Cherry  Marine  with  the  specific  intent  to  hinder,  delay,  or  
defraud  Transcon’s  creditors  and  thereby  enrich  Cherry  Marine  and  its  ownership  at  the  
expense  of  those  creditors.  
210. Accordingly,  Cherry  Marine’s  receipt  of  property  of  the  estate  was  the  
product  of  a  transfer  that  was  intentionally  fraudulent  as  to  Transcon’s  creditors  and,  as  
such,  the  Liquidating  Agent  is  entitled  to  recover  the  value  of  the  transfer  for  the  benefit  
of  the  Transcon  estate.  
211. Hrobuchak  and  Mrs.  Hrobuchak  each  own  50%  of  the  interests  of  Cherry  
Marine  and  are  liable  for  the  recovery  and  return  of  any  of  the  property  each  may  have  
received  from  Cherry  Marine.  
WHEREFORE  plaintiff  respectfully  requests  that  this  Court  enter  a  judgment  
against  Cherry  Marine,  Hrobuchak  and  Mrs.  Hrobuchak  awarding  plaintiff  the  

$1,000,000.00  Cherry  Marine  received  as  payment  for  Transcon’s  assets  including  goodwill  
and  other  intangible  property,  without  consideration,  together  with  any  and  all  such  
other  relief  as  the  Court  deems  just  and  proper.  

COUNT  VIII  –  FRAUDULENT  TRANSFER  PURSUANT  TO  11  U.S.C.  §  548(a)(1)(B)  

(versus  Cherry  Marine,  Hrobuchak  &  Mrs.  Hrobuchak)  

212. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  
213. Upon  receipt  of  the  $1,000,000.00  payment  made  under  the  Covenant,  

Cherry  Marine  received  property  of  the  estate,  in  the  form  of  value  properly  attributable  
to,  and,  on  information  and  belief,  paid  on  account  of,  Transcon’s  assets  including  

 
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goodwill  and  other  intangible  property,  in  exchange  for  promises  made  by  Cherry  Marine  
and  Hrobuchak  in  his  individual  capacity.  
214. Cherry  Marine  did  not  provide  Transcon  with  any  consideration,  let  alone  
reasonably  equivalent  consideration,  in  exchange  for  the  property  of  the  estate  it  received  
in  connection  with  the  Covenant.  
215. The  payment  Cherry  Marine  received  in  connection  with  the  New  Prime  
transaction,  resulted  in  Transcon’s  insolvency,  i.e.,  left  Transcon  in  a  financial  condition  
such  that  the  sum  of  its  debts  exceeded  all  of  Transcon’s  remaining  property  at  a  fair  
valuation.  
216. Alternatively,  the  payment  Cherry  Marine  received  in  connection  with  the  
New  Prime  transaction,  left  Transcon  with  unreasonably  small  capital  such  that  Transcon  
would  be  obviously  unable  to  satisfy  the  claims  of  its  creditors.  
217. Accordingly,  the  payment  Cherry  Marine  received  in  connection  with  the  
New  Prime  transaction,  was  constructively  fraudulent  as  to  Transcon’s  creditors  and,  as  
such,  the  Liquidating  Agent  is  entitled  to  recover  the  value  of  the  transfers  for  the  benefit  
of  the  Transcon  estate.  
218. Hrobuchak  and  Mrs.  Hrobuchak  each  own  50%  of  the  interests  of  Cherry  
Marine  and  are  liable  for  the  recovery  and  return  of  any  of  the  property  each  may  have  

received  from  Cherry  Marine.  

WHEREFORE  plaintiff  respectfully  requests  that  this  Court  enter  a  judgment  
against  Cherry  Marine,  Hrobuchak  and  Mrs.  Hrobuchak  awarding  plaintiff  the  
$1,000,000.00  Cherry  Marine  received  as  payment  for  Transcon’s  assets  including  goodwill  
and  other  intangible  property,  without  consideration,  together  with  any  and  all  such  
other  relief  as  the  Court  deems  just  and  proper.  

COUNT  IX  –  PROFESSIONAL  NEGLIGENCE/MALPRACTICE  

(versus  Kalnis,  Duggan  &  HDR)  

219. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  

 
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 220. Transcon  employed  Kalnis  and  HTD  as  counsel  in  connection  with  the  New  
Prime  transaction.  
221. By  virtue  of  that  employment,  Kalnis  and  HTD  owed  Transcon  a  duty  to  
exercise  the  ordinary  skill  and  knowledge  with  which  an  attorney  is  charged.  
222. By  undertaking  the  representation  of  Hrobuchak  and  the  entities  he  
controlled  in  the  same  transaction  and  actively  promoting  Hrobuchak’s  interests  at  the  
expense  of  Transcon’s  interests,  Kalnis  and  HTD  failed  to  exercise  the  ordinary  skill  and  
knowledge  with  which  an  attorney  is  charged.  
223. Indeed,  by  undertaking  the  representation  of  Hrobuchak  and  the  entities  he  
controlled  in  the  same  transaction  and  actively  promoting  Hrobuchak’s  interests  at  the  
expense  of  Transcon’s  interests,  Kalnis  and  HTD  intentionally  harmed  Transcon’s  
interests.  
224. As  a  proximate  result  of  the  negligence  of  Kalnis  and  HTD,  Transcon  was  
damaged  by  not  receiving  any  fair  value  for  its  assets,  including  the  goodwill  and  other  
intangible  property  that  Kalnis,  Duggan,  and  HTD  assisted  Hrobuchak  in  funneling  to  
himself  and  other  entities  in  which  he  maintained  a  financial  interest.  
225. Not  only  was  the  conduct  of  Kalnis  and  HTD  negligent,  that  conduct  was  
intentional  and  outrageous  such  that  exemplary  damages  are  warranted.  

WHEREFORE  plaintiff  requests  that  the  Court  enter  a  judgment  in  Transcon’s  
favor  finding  Kalnis,  Duggan,  and  HTD  liable  for  professional  negligence/legal  
malpractice  and  awarding  Transcon  actual  damages  in  an  amount  to  be  proven  at  trial,  
punitive  damages,  and  all  such  other  relief  as  the  Court  deems  just  and  proper.  

COUNT  X  –  BREACH  OF  FIDUCIARY  DUTY  

(versus  Hrobuchak  &  Davis)  

226. Plaintiff  incorporates  all  the  foregoing  paragraphs  of  its  complaint  as  
though  fully  set  forth  herein.  

227. Hrobuchak  and  Davis  were  each  officers  and/or  directors  of  Transcon.  

 
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 228. As  officers  and/or  directors,  Hrobuchak  and  Davis  each  owed  Transcon  a  
fiduciary  duty  to  protect  the  interests  of  Transcon  were  protected  by  realizing  the  full  and  
fair  value  for  the  assets  Transcon  sold  to  New  Prime.  
229. Hrobuchak  and  Davis  each  breached  their  fiduciary  duties  to  Transcon  in  
connection  with  the  New  Prime  transaction  by  participating  in  the  misallocation  of  value  
and  the  diversion  of  assets  as  set  forth  above.  
230. The  conduct  of  Hrobuchak  and  Davis  was  intentional  and  outrageous  such  
that  exemplary  damages  are  warranted.  
WHEREFORE,  plaintiff  requests  that  the  Court  enter  a  judgment  in  Transcon’s  
favor  finding  Hrobuchak  and  Davis  liable  for  breach  of  fiduciary  duty  and  awarding  
Transcon  actual  damages  in  an  amount  to  be  proven  at  trial,  punitive  damages,  and  all  
such  other  relief  as  the  Court  deems  just  and  proper.  
Jury  Demand  
231. Plaintiff  demands  a  trial  by  jury  of  all  issues  in  this  case  so  triable.  
 
Dated:    February  26,  2010  
 
 

 
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