RAIT Financial shareholder asks court to undo sale, reconsider ruling

By Caroline Salls

Pittsburgh, Feb. 28 – RAIT Financial Trust shareholder Michael Ekberg asked the U.S. Bankruptcy Court for the District of Delaware to reconsider its order confirming the trust’s Chapter 11 plan, according to a motion filed Friday.

Ekberg said the trust made fraudulent transfer to buyer and insider Fortress Investments, LLC “to the detriment of all other of debtor’s preferred stockholders.”

As a result, Ekberg said the court should cause the assets and funds held by the buyer and third-party beneficiaries of the allegedly fraudulent transfers unwind the transaction, rule that all RAIT series D preferred share redemptions are detrimental to series A, B and C preferred shareholders and distribute affected assets and funds to all preferred shareholders.

In addition, Ekberg said Fortress got inside information about RAIT during the transaction process that led to the trust’s bankruptcy.

“Claimant respectfully requests that the court cancel the buyer’s bid, and appoint a neutral party to take receivership of RAIT assets, and either seek a new buyer or just run off the assets to pay off shareholders,” the motion said.

The real estate investment trust is based in Philadelphia. It filed bankruptcy on Aug. 30, 2019 under Chapter 11 case number 19-11915.

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