Veil-Piercing Rejected Absent Proof of Domination/Wrongdoing, but Insider Truck Transfers Set Aside as Actually Fraudulent Under Former DCL § 276

1. Introduction

Parabit Realty, LLC v Levine (2026 NY Slip Op 02663 [App Div, 2d Dept Apr. 29, 2026]) arises out of a long-running effort to collect on a money judgment. The plaintiffs (Parabit Realty, LLC, et al.) previously obtained a default judgment against B & A Demolition and Removal, Inc. (“B & A Demo”) in litigation alleging property damage caused by demolition-related work at an adjacent site. A judgment was entered on April 22, 2016, in the principal sum of $820,375.

After B & A Demo dissolved, plaintiffs commenced this enforcement action (Index No. 603570/19) not only against B & A Demo, but also against its sole owner Charles Levine and two related companies: King Metal Corp. (formed by Levine in 2011) and B & A Commercial, Inc. (formed by Levine’s wife in 2015 but operated by Levine). Plaintiffs pursued two main theories:

  • Personal liability via veil piercing/alter ego (first and second causes of action), seeking to hold Levine and the affiliated entities liable for the judgment.
  • Fraudulent conveyance relief under former Debtor and Creditor Law (“DCL”) §§ 273, 273-a, 274, 275, and 276, plus attorneys’ fees under former DCL § 276-a, to unwind asset transfers allegedly made to hinder collection.

After a nonjury trial, the Supreme Court pierced the veil, entered a money judgment against defendants jointly and severally (including attorneys’ fees and costs), and broadly set aside “all transfers” among defendants to the extent necessary to satisfy the 2016 judgment. On appeal, the Second Department sharply narrowed the relief: it rejected veil piercing and limited avoidance to two specific truck transfers, while sustaining plaintiffs’ entitlement to fees tied to the actually fraudulent conveyance claim.

2. Summary of the Opinion

The Appellate Division:

  1. Dismissed the appeals from the intermediate orders as academic after entry of final judgment, applying Matter of Aho.
  2. Reversed on veil piercing/alter ego: the first and second causes of action were dismissed because plaintiffs failed to prove Levine’s complete domination and that such domination was used to commit a fraud or wrong.
  3. Affirmed fraudulent conveyance relief in part: the court upheld setting aside the transfer of two trucks (a white 2000 Mack truck and a green 2001 Peterbilt truck) transferred from B & A Demo to Levine and then to affiliated entities.
  4. Rejected the trial court’s broad “all transfers” remedy: the record did not warrant avoidance of additional transfers.
  5. Confirmed entitlement to attorneys’ fees under former DCL § 276-a because plaintiffs proved actual intent under former DCL § 276.

3. Analysis

A. Precedents Cited

1) Appellate review and appealability

  • Matter of Aho, 39 NY2d 241, 248: once a final judgment is entered, appeals from prior orders generally must be dismissed. The court relied on this to dismiss the separate appeals from the August 22, 2022 and March 29, 2023 orders.
  • Bonzcar v American Multi-Cinema, Inc., 38 NY3d 1023, 1025 and CPLR 5501(a)(1): an interlocutory order is “brought up” on appeal from a final judgment only if it “necessarily affect[ed]” the judgment. The August 22, 2022 order denying summary judgment did not, so its issues were not reviewable.
  • Americore Drilling & Cutting, Inc. v EMB Contr. Corp., 198 AD3d 941, 945-946; Northern Westchester Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499; Vivir of L I, Inc. v Ehrenkranz, 145 AD3d 834, 835: on appeal from a nonjury trial, the Appellate Division’s fact-review power is “as broad as that of the trial court,” while giving some deference where credibility is pivotal.

2) Veil piercing and alter ego standards

  • Bonanni v Horizons Invs. Corp., 179 AD3d 995, 1001 (quoting Sky-Track Tech. Co. Ltd. v HSS Dev., Inc., 167 AD3d 964, 964): reiterates the baseline rule of corporate separateness and limited liability.
  • Sterling Park Devs., LLC v China Perfect Constr. Corp., 185 AD3d 1082, 1083-1084: describes veil piercing as an exception allowing personal liability in certain circumstances.
  • Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 140-141: provides the canonical two-prong test: (1) complete domination as to the transaction attacked; and (2) use of that domination to commit a fraud or wrong causing injury.
  • Cortlandt St. Recovery Corp. v Bonderman, 31 NY3d 30, 47: veil piercing may be used to prevent fraud or achieve equity, but remains fact- and equity-driven.
  • Matter of DePetris v Traina, 211 AD3d 939, 941-942: applied for the “complete domination” requirement and as a comparator for evidence (or lack) of personal use of corporate funds and improper purpose.
  • Olivieri Constr. Corp. v WN Weaver St., LLC, 144 AD3d 765, 767 (quoted in Americore Drilling & Cutting, Inc. v EMB Contr. Corp., 198 AD3d at 946): recognizes “alter ego” veil piercing to achieve equity where the corporation primarily transacts the dominator’s business rather than its own.
  • Fantazia Intl. Corp. v CPL Furs N.Y., Inc., 67 AD3d 511, 512-513: cited as support that separate bank accounts, records, and tax filings weigh against veil piercing.

3) Constructive fraudulent conveyance (former DCL §§ 273, 273-a, 274, 275) and “fair consideration”

  • Cheek v Brooks, 188 AD3d 785, 786: applied to former DCL § 273(a) (insolvency + lack of fair consideration = fraudulent regardless of intent).
  • Palmerone v Staples, 195 AD3d 736, 737-738: applied to former DCL § 274 (unreasonably small capital + lack of fair consideration).
  • JDI Display America, Inc. v Jaco Elecs., Inc., 188 AD3d 844, 845: applied to former DCL § 275 and also quoted for the “good faith” component of fair consideration.
  • American Panel Tec v Hyrise, Inc., 31 AD3d 586, 587-588: preferential transfers to insiders of insolvent corporations fail the good-faith requirement.
  • Matter of CIT Group/Commercial Servs., Inc. v 160-09 Jamaica Ave. Ltd. Partnership, 25 AD3d 301, 303: transfers to controlling insiders are presumptively fraudulent/lacking in good faith.
  • Corning Fed. Credit Union v Georgilis, 217 AD3d 828, 830: “fair consideration” may include satisfaction of an antecedent debt.
  • Bridgehampton Natl. Bank v D & G Partners, L.P., 186 AD3d 1301, 1311-1312 and Bridgehampton National Bank v D & G Partners, L.P., 186 AD3d at 1312: cited for antecedent debt and for former DCL § 276’s “actual intent” standard.

4) Actual fraudulent conveyance (former DCL § 276), badges of fraud, and proof by inference

  • JDI Display America, Inc. v Jaco Elecs., Inc., 188 AD3d at 845-846 (quoting Matter of Steinberg v Levine, 6 AD3d 620, 621): actual intent need not be direct; it may be inferred from circumstances.
  • Goldenberg v Friedman, 191 AD3d 641, 643-644 (quoting Wall St. Assoc. v Brodsky, 257 AD2d 526, 529): enumerates classic “badges of fraud” (close relationship, unusual transfer, inadequate consideration, knowledge of claim and inability to pay, and retention of control).
  • Matter of Setters v AI Props. & Devs. (USA) Corp., 139 AD3d 492, 493-494 and Prudential Farms of Nassau County v Morris, 286 AD2d 323, 324: used as comparators for inferring actual intent from insider relationships and control/retention.
  • Joslin v Lopez, 309 AD2d 837, 838 and Prudential Farms of Nassau County v Morris, 286 AD2d at 323: cited regarding failure to establish value/consideration supporting the conveyance.
  • Matter of CIT Group/Commercial Servs., Inc. v 160-09 Jamaica Ave. Ltd. Partnership, 25 AD3d at 303: relied upon to reject the notion that an asserted external “approval” (here, alleged IRS approval) automatically negates an inference of fraudulent intent.

B. Legal Reasoning

1) Why veil piercing failed

The Second Department applied the Matter of Morris v New York State Dept. of Taxation & Fin. framework and held that plaintiffs did not meet the threshold “complete domination” showing—despite Levine’s common ownership and operational involvement across entities. The court emphasized concrete indicia of separateness and legitimate enterprise activity:

  • Each entity operated “real businesses” with employees and customers.
  • No proof that Levine used corporate funds for personal use (a frequent domination indicator).
  • Separate bank accounts, books and records, and separate tax returns.
  • Different incorporation times and “legitimate business purposes.”

Just as importantly, plaintiffs failed to connect corporate restructuring (dissolution of B & A Demo; formation of King Metal) to an intent “to perpetrate a wrong” against plaintiffs. In other words, the record did not show the “domination” was used as an instrument to injure the judgment creditor, as required by Matter of DePetris v Traina and Americore Drilling & Cutting, Inc. v EMB Contr. Corp..

The practical takeaway is that common ownership, shared workspace, and shared employees—even paired with a judgment creditor’s suspicion—does not substitute for proof that the corporations were mere shells used to conduct the owner’s personal business or to commit a wrong.

2) Why the truck transfers were properly set aside

Although the court rejected veil piercing, it separately scrutinized asset transfers under former DCL fraudulent conveyance provisions. It affirmed avoidance of the transfers involving the two trucks, focusing on two interlocking findings:

  1. Lack of proven fair consideration: the evidence did not establish fair market value of the trucks or that their value was properly offset against Levine’s claimed officer loan to B & A Demo (citing Joslin v Lopez and Prudential Farms of Nassau County v Morris).
  2. Insider preference / bad faith: even if the transfers satisfied an antecedent debt, preferential repayment to the corporation’s sole shareholder while insolvent fails the “good faith” element of fair consideration under American Panel Tec v Hyrise, Inc. and is “presumptively fraudulent” under Matter of CIT Group/Commercial Servs., Inc. v 160-09 Jamaica Ave. Ltd. Partnership.

The court also upheld liability under former DCL § 276 (actual intent) by identifying multiple “badges of fraud”: close relationship (Levine as sole shareholder), knowledge of the underlying litigation when transfers occurred, and retention of control of the trucks after transfer. Those circumstances supported an inference of intent under JDI Display America, Inc. v Jaco Elecs., Inc. and Goldenberg v Friedman.

Notably, the accountant’s testimony that the IRS approved the transfer did not, “by itself,” defeat the inference of fraudulent intent given the badges present, consistent with Matter of CIT Group/Commercial Servs., Inc. v 160-09 Jamaica Ave. Ltd. Partnership.

3) Why the “all transfers” remedy was too broad

The trial court ordered that “all transfers made between the Defendants be set aside” to satisfy the judgment. The Second Department held that the record did not warrant avoidance beyond the specific truck transfers. Citing the broad fact-review standard (including Northern Westchester Professional Park Assoc. v Town of Bedford), the court effectively required transaction-by-transaction proof—particularly where the remedy would unwind unspecified additional transfers.

4) Attorneys’ fees under former DCL § 276-a

Because plaintiffs succeeded on an actual-intent fraudulent conveyance claim under former DCL § 276, the court held they also established entitlement to fees under former DCL § 276-a, citing Corning Fed. Credit Union v Georgilis and Goldenberg v Friedman. The decision thus reinforces the linkage: prove § 276 actual intent, and fee-shifting becomes available under § 276-a (subject to proper proof and scope).

C. Impact

  • Sharper separation between veil piercing and fraudulent transfer remedies: the opinion underscores that failure to pierce the veil does not foreclose targeted fraudulent conveyance relief. Judgment creditors should plead and prove both tracks distinctly.
  • Evidentiary discipline for veil piercing: corporate formalities (separate accounts/records/returns), legitimate business operations, and absence of personal-use evidence can defeat veil piercing even amid dissolution and related-entity formation.
  • Insider transfers remain high-risk: preferential repayment to a controlling shareholder of an insolvent corporation is treated as lacking good faith, and combined with badges of fraud can support actual intent findings—particularly when the debtor knows of pending claims.
  • Remedial restraint: trial courts should tailor avoidance decrees to proven conveyances. Broad “all transfers” language is vulnerable on appeal absent a record supporting each transfer’s fraudulent character.
  • Legacy former-DCL litigation: although New York has moved to the Uniform Voidable Transactions Act for later transfers, the decision is significant for the still-substantial inventory of cases governed by the former DCL, especially regarding insider “good faith” and badges-of-fraud analysis.

4. Complex Concepts Simplified

Piercing the corporate veil
A doctrine allowing courts to disregard the corporation’s separate legal personality and hold owners personally liable—typically requiring proof of (1) complete domination and (2) use of that domination to commit a wrong causing injury.
Alter ego
A shorthand for situations where the corporation functions as the owner’s “other self,” transacting the owner’s business rather than its own. It is not proven merely by ownership/control; courts look for misuse of the corporate form.
Fraudulent conveyance / fraudulent transfer
A transfer of assets that the law treats as improper as to creditors. Under the former DCL, a transfer could be fraudulent either constructively (based on insolvency/lack of fair consideration) or by actual intent to hinder, delay, or defraud.
Fair consideration (former DCL)
Roughly, a fair exchange. It can include paying an existing (“antecedent”) debt, but it also requires good faith. Transfers favoring controlling insiders when the corporation is insolvent are often treated as lacking that good faith.
Badges of fraud
Common circumstantial indicators of fraudulent intent—like insider relationships, inadequate consideration, unusual timing, knowledge of claims, inability to pay, and retaining control after transfer.
Former DCL § 276-a attorneys’ fees
A fee-shifting provision that can award attorneys’ fees where the creditor proves an actually fraudulent conveyance under former DCL § 276.

5. Conclusion

Parabit Realty, LLC v Levine delivers a dual lesson for post-judgment enforcement in New York: (1) veil piercing remains a demanding, fact-intensive remedy that is not established by common ownership and operational overlap when corporations observe separateness and operate legitimate businesses; but (2) targeted avoidance of insider transfers remains available—and potent—where the record shows inadequate consideration, insider preference, and classic badges of fraud supporting an inference of actual intent under former DCL § 276.

The opinion’s most practical contribution is its insistence on precision: precision in proving domination and wrongdoing for veil piercing, and precision in proving and tailoring fraudulent-transfer relief to specific transactions rather than sweeping “all transfers” orders.