Third Circuit disposition — 063630np-pdf

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
__________
No. 06-3630
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JOYCE P. CHANG, ELAINE Y. CHANG
a/k/a ELAINE Y. DARER, MICHAEL T. CHANG,
and CHERYL A. CHERNE,
Defendants - Appellants,
vs.
UNITED STATES OF AMERICA,
Plaintiff - Appellee.
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On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 02-4834)
District Judge: Honorable Garrett E. Brown, Jr.
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Submitted Under Third Circuit L.A.R. 34.1(a)
September 20, 2007
Before: SLOVITER, SMITH, and GARTH, Circuit Judges.
(Opinion Filed: September 21, 2007)
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OPINION
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-1-
Re: GARTH, Circuit Judge
This appeal essentially involved a fraudulent transfer of monies where no
consideration was paid by the recipients. The facts, which are somewhat convoluted, are
taken primarily from the District Court’s opinion, inasmuch as the briefs of the parties
were not helpful in this respect. However, inasmuch as we write only for the parties, we
will not describe the facts in detail but only in summary fashion.
The defendant, David Chang, the father of the three Chang children, and a close
friend, Cheryl Cherne, received a total of $525,000 from David Chang through his two
alter ego corporations, “Saska Corporation” and “Dakota Management, Inc.”
The defendant, David Chang, through his alter ego company, “River Road Realty
Development Corp.,” had generated over $17 million from the sale of a property. After
the payment of various costs, liens and expenses, the defendant, David Chang, paid
$441,750 into “Dakota”and $1,630,832.99 into “Saska.” Thereafter, “Saska” sent
$150,000 to Joyce Chang and $120,000 to Michael Chang. Later “Saska” paid $120,000
to Elaine Chang and “Dakota” paid $75,000 to Cheryl Cherne. “Dakota” also paid
$60,000 to Elaine Chang. No consideration was given for any of these transfers which
total the sum of $525,000 noted above. At the time of the transfers, David Chang was
insolvent.

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-2-
The Small Business Administration holds two judgments against the defendant,
David Chang. One in the amount of 2.1 million dollars and the second in the aggregate
amount of approximately $995,000. The government, on behalf of the Small Business
Administration to whom David Chang owed monies, sought to recover the $525,000 as
fraudulent transfers under New Jersey law. Various defenses were raised by the
defendants, largely centered on the fact that David Chang was not the alter ego of his
entities; that David Chang’s payments were to satisfy financial obligations to his
children; that David Chang had a debt obligation to Cheryl Cherne, that David Chang
was not insolvent; etc., etc.
In a reasoned and well crafted opinion the District Court rejected all of David
Chang’s defenses and granted summary judgment in favor of the United States. In our
review, we applied the same plenary standard that the District Court applied. Having
independently examined the record and the briefs, we are satisfied that the District
Court’s opinion and Judgment should be affirmed substantially for the reasons stated in
the District Court’s opinion.
The Order granting summary judgment in favor of the United States will be
affirmed.

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