Berkley Insurance Company has filed a complaint alleging that a group of construction companies and their principals moved real estate, cash, and retirement funds to family members and trusts rather than pay a $14.45 million judgment the surety holds against them.
The complaint, filed September 14, 2026, in the US District Court for the Eastern District of New York, names four Queens-based corporate entities, five individual debtors, their adult children, two irrevocable trusts, and unnamed trustees and transferees.
According to the filing, Berkley obtained the judgment on March 27, 2025, in an earlier action in the same court. The award comprised $10.5 million in damages and roughly $3.95 million in prejudgment interest, arising from indemnity obligations - contractual promises to repay the surety for construction losses it covered - on bonded projects. The complaint states the debtors lost their appeal and the judgment remains entirely unpaid, with the debtors claiming insolvency.
The complaint alleges that in February 2020, two of the individual debtors - a married couple - transferred two adjacent Queens residential properties to their adult children for little or no payment. One property allegedly went to their daughter, the other to their son. According to the filing, the couple continued to live rent-free in the basement of one property while other floors were rented out. Their son allegedly received rental income from the second property.
The same couple allegedly transferred their interests in a separate Queens commercial property to two irrevocable trusts, again for little or no payment, with their children serving as co-trustees.
According to the filing, one of the debtors testified during an October 2025 deposition that he created a trust and moved assets because of "health problems and a desire to get assets off his name." The complaint characterizes this as "direct evidence that the transfers were designed to place assets beyond creditors' reach."
Among the more unusual allegations, the complaint details international transfers spanning 2019 to 2024 to a business entity or individual in Greece, allegedly connected to what the filing describes as "a since-abandoned business venture raising rabbits for their skins on an approximately 15-acre farm." The complaint states these payments continued for years after the business had shut down.
The same debtor allegedly transferred an apartment in Greece to his daughter without payment. According to the filing, his spouse sent roughly $20,000 or more to the daughter for education, marriage, and other expenses after Berkley's debt claims had already arisen.
A second couple among the debtors allegedly channeled funds to their two adult daughters for property purchases. The complaint states that one debtor withdrew approximately $109,520 from her IRA in October 2020 and transferred $108,000 of it to one daughter as a down payment on a roughly $300,000 apartment. The filing states the debtor described the payment as a "gift" and provided about $136,000 in total toward that purchase.
The same couple allegedly contributed roughly $87,000 toward another daughter's acquisition of a house - about $76,000 for the down payment and $11,000 for closing costs - plus payments for contractor repairs that were never repaid. The filing states the house cost about $600,000.
According to the complaint, transfers to both daughters continued after Berkley issued indemnity demands in March and April 2021 and after the judgment was entered, including payments for legal fees and school expenses.
The filing alleges one debtor transferred substantial sums to the Dominican Republic, including $40,000 in October 2023, while maintaining a joint bank account in Santo Domingo. The complaint alleges these transfers occurred while the debtors were unable to satisfy Berkley's claim. Berkley also flags what it describes as undocumented loans to a friend, allegedly made without promissory notes or interest.
The complaint alleges that approximately $2 million distributed by the owner of the project Berkley had bonded - the project that triggered the underlying lawsuit - went into an account controlled by one of the defendant companies instead of being used to pay Berkley. According to the filing, the debtors used those funds to invest in a commercial property in the Bronx. Berkley describes this interest as "the proceeds of a fraudulent transfer" and seeks its turnover.
According to the complaint, the debtors failed to produce complete financial records despite repeated demands. During October 2025 depositions, the filing states, the debtors "claimed not to remember material facts about transfers, accounts, sale proceeds, bank deposits, checks, and foreign property." One transferee who was served with a document subpoena allegedly never responded. Berkley says it could not have learned the full scope of the alleged transfers until the deposition testimony and belated document productions in late 2025 and early 2026.
The complaint brings six counts under the New York Debtor and Creditor Law. Berkley seeks to unwind the transfers, recover property including the Bronx real-estate interest, obtain money judgments against the transferees, freeze remaining assets, and compel an accounting. Berkley has also demanded a jury trial.
These are allegations in a civil complaint, and no court has made any findings or rulings on the merits.
