J-A10027-17


NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37

BROOKWORTH PARTNERS, L.P.                             IN THE SUPERIOR COURT OF
                                                            PENNSYLVANIA
                             Appellant

                       v.

FRANKFORD MACHINERY, INC.,
NICHOLAS KASHKASHIAN, JR., AND
RONALD KASHKASHIAN

                             Appellees                   No. 2967 EDA 2016


                 Appeal from the Order Dated August 23, 2016
               In the Court of Common Pleas of Delaware County
                       Civil Division at No(s): 2013-08010

BEFORE: DUBOW, J., SOLANO, J., and FORD ELLIOTT, P.J.E.

MEMORANDUM BY SOLANO, J.:                         FILED SEPTEMBER 26, 2017

      Appellant Brookworth Partners, L.P., appeals from the judgment

entered   in   favor    of    Appellees   Frankford    Machinery,   Inc.,   Nicholas

Kashkashian, Jr., and Ronald Kashkashian in Appellant’s action claiming a

fraudulent transfer in violation of the Pennsylvania Uniform Fraudulent

Transfer Act (“PUFTA”), 12 Pa.C.S. §§ 5101-5110. After careful review, we

affirm.

      Frankford Associates, Inc., though no longer an entity and not a party

to this litigation, is central to Brookworth’s claim. Frankford Associates was a

Pennsylvania corporation which began operating in 1966. Trial Ct. Op.,

11/29/16, at 4. It was a family business founded by Arson Kashkashian, who

was the sole shareholder until his death. N.T., 4/14/16, at 59. Arson had two
J-A10027-17


sons who became involved in the business, Ronald Kashkashian and Nicholas

Kashkashian, Sr. Id. Ronald was initially a salesman for Frankford

Associates; after Arson’s death in 2006, he became a shareholder, director,

and officer; and after Nicholas Sr.’s death in 2009, he became president. Id.

at 22, 59-60. Nicholas Sr. had two sons, Nicholas Kashkashian, Jr. and Eric

Kashkashian, who succeeded to his ownership interest in the company. Id.

at 60. By 2011, Nicholas Jr. was an employee, shareholder, director, and

officer of Frankford Associates. Id. at 60, 63-64.1

       Frankford Associates’ main business was servicing commercial dry-

cleaning equipment and selling replacement parts for such equipment. Trial

Ct. Op. at 5. It had four employees, including a parts manager, two service

technicians, and a receptionist. N.T. at 23, 63. By the 1990’s, Frankford

Associates had also begun selling turn-key dry-cleaning operations, for

which it would guarantee leases of rental properties. Id. at 23, 25, 62.2 This

aspect of its business accumulated significant debts. Id. at 43-45;

Brookworth’s Ex. 11 (bankruptcy schedules showing $938,068.31 of debt

was primarily comprised of commerical real estate leases).
____________________________________________
1
  Ronald testified that Nicholas Jr. was a 25% shareholder of Frankford
Associates at the time of trial. N.T. at 23. However, the 2011 federal income
tax return for Frankford Associates (covering the period July 1, 2011 through
June 30, 2012) shows that Ronald and Nicholas Jr. were both 50% owners of
Frankford Associates the year it went out of business. Brookworth’s Ex. 5.
2
  Ronald Kashkashian described this portion of the business as “industry
package plants where they would take a lease on a particular property, build
out the facilities, find a buyer.” N.T. at 23.


                                           -2-
J-A10027-17


       In 2002, Ronald and Nicholas Sr. opened defendant-Appellee Frankford

Machinery, Inc., another Pennsylvania corporation. N.T. at 24.3 Its main

area   of   business    was    selling   commercial   dry   cleaning   and   laundry

equipment, for which Ronald would solicit customers “door to door.” Id. at

24-25, 59, 78. Both Ronald and Nicholas Jr. are now employees, directors,

and officers of Frankford Machinery. Id. at 58, 82-83, 148. Ronald owns

50% of the company, and Nicholas Jr. owns 25%. Id. at 58.4 Ronald is

president. Id.

       Both businesses maintained their respective corporate offices and

warehouses at 4500 Torresdale Avenue in Philadelphia, where they shared

such common business resources as a telephone number, receptionist,

stationary, and computers. Trial Ct. Op. at 4-5; N.T. at 30. Both businesses

were insured by a single common property and casualty commercial

insurance policy. Trial Ct. Op. at 5. They filed separate tax returns, used

separate billing systems, and used separate letterheads. N.T. at 80-81. The

businesses served many of the same customers, Trial Ct. Op. at 5, and the

two companies would often refer customers to each other — for example,




____________________________________________
3
 At the time that it opened, Ronald and his brother were the only two
employees of Frankford Machinery. N.T. at 24. It is unclear how many
employees Frankford Machinery has subsequently employed.
4
  Eric Kashkashian, Nicholas Jr.’s brother, owns the remaining 25% of
Frankford Machinery, but is not active in the business. N.T. at 58.


                                           -3-
J-A10027-17


Frankford Machinery would refer customers who needed their equipment

repaired to Frankford Associates. N.T. at 79-80, 155-56.

     Brookworth is a landlord (or a successor in interest to a landlord)

under a commercial lease agreement for which Frankford Associates was

guarantor. Trial Ct. Op. at 2. After Brookworth’s tenant (Frankford

Associates’ customer) defaulted on the lease, Brookworth sued Frankford

Associates and obtained a judgment in the amount of $249,100 on June 5,

2011. Id.

     In mid-August 2011, Brookworth executed on a bank account

belonging to Frankford Associates and collected $117,422.60 against its

judgment. Trial Ct. Op. at 2. Frankford Associates then began borrowing

money from Frankford Machinery in order to continue operating. Id.

     On December 31, 2011, Frankford Associates closed. Trial Ct. Op. at 3

At that point, it owed Frankford Machinery $133,000. Id. Frankford

Associates transferred its remaining physical property, including office

furniture and fixtures, a van, a truck, office computers, and old or used dry

cleaning or laundry equipment, to Frankford Machinery for a loan reduction

of $83,000. Id.; N.T. at 65-69. After December 31, 2011, Frankford

Machinery began to service commercial laundry and dry-cleaning equipment

and sell replacement parts (the business in which Frankford Associates had

engaged). Id. at 81.




                                    -4-
J-A10027-17


       On February 25, 2013, Frankford Associates filed for bankruptcy. Trial

Ct. Op. at 3. Brookworth was listed in the proceeding as one of Frankford

Associates’ unsecured creditors, as was Frankford Machinery. Id. The

bankruptcy schedules listed one asset: receivables due from “Premier

Cleaners” in the amount of $13,207.33, which was indicated to be in

litigation; they listed liabilities of $938,068.31. Brookworth’s Ex. 11. On

May 21, 2013, the appointed bankruptcy trustee filed his final report with

the bankruptcy court. Trial Ct. Op. at 4. The report confirmed that there was

no property available for distribution to creditors, id.; the amount due from

Premier Cleaners was described as an abandoned asset. Defendants’ Ex. 2.

The trustee’s report was adopted by the court, and on June 3, 2013, the

bankruptcy proceedings were concluded. Trial Ct. Op. at 4.

       On July 15, 2014, Brookworth filed the complaint in the instant case.5

In the complaint, Brookworth claimed that Frankford Associates violated the

PUFTA when it transferred “assets” to Frankford Machinery after Frankford

Associates was insolvent (or was rendered insolvent by the transfer), at a

time when Brookworth was a creditor of Frankford Associates, and without

receiving reasonably equivalent value from Frankford Machinery. Compl.,

7/15/14, at ¶¶ 25-28. Brookworth alleged that the assets were transferred

“to insulate Franklin [sic] Associates from the claims of creditors such as

____________________________________________
5
  Brookworth initiated the case on August 14, 2013, and conducted pre-
complaint discovery.


                                           -5-
J-A10027-17


Brookworth” and “to give Franklin [sic] Machinery the control and benefit of

the assets, property and business of Franklin [sic] Associates.” Id. at ¶¶ 29,

33. The complaint did not specifically describe what assets were transferred,

except to specify that Frankford Machinery succeeded in the use of the

website “frankfordonline.com.” Id. at ¶ 20.6 The complaint also did not give

a specific timeframe for the alleged transfer of assets. The complaint claimed

that Ronald and Nicholas Jr., as shareholders, officers, and directors of both

companies, acted “with intent to hinder, delay and defraud Brookworth and

other creditors.” Id. at ¶ 38.

       Frankford Machinery and the Kashkashians responded on July 31,

2014. They denied that any assets had been transferred from Frankford

Associates to Frankford Machinery except those tangible assets listed on the

bill of sale from December 31, 2011. Response, 7/31/14, at ¶ 28. They also

asserted that the website frankfordonline.com had always served both

companies, although the companies are separate and distinct. Id. at ¶ 20.

       A non-jury trial was held on April 14, 2016. In Brookworth’s opening

statement, its counsel stated that Brookworth intended to prove that on

December 31, 2011, Frankford Associates possessed intangible assets which

“stayed in the room” after its business closed, and were thus fraudulently

transferred to Frankford Machinery in violation of the PUFTA. N.T. at 9, 13-

____________________________________________
6
  Other allegations included in the complaint which were abandoned at the
time of trial or appeal have not been included here.


                                           -6-
J-A10027-17


14. In his opening statement, counsel for Frankford Machinery and the

Kashkashians argued that the evidence would show that no intangible assets

changed hands on December 31, 2011, or at any other time; that the two

companies were separate and distinct; and that neither Frankford Machinery

nor Ronald or Nicholas Jr., as principals of Frankford Machinery, are liable for

the debts of Frankford Associates. Id. at 16-19.

       At trial, Ronald Kashkashian testified that after Brookworth executed

on the Frankford Associates bank account on August 15, 2011, that

company was financially depleted and forced to borrow money from

Frankford Machinery in order to keep operating. N.T. at 61. He agreed that

by December 31, 2011, Frankford Associates was no longer able to pay its

financial obligations and owed more than the company “had available to use

to make payments.” Id. at 32. When asked whether Frankford Associates

was insolvent as of December 31, 2011, Ronald responded “yes.” Id. at 31.

Ronald was not asked on what date Frankford Associates first became

insolvent.7

       Ronald denied that Frankford Associates transferred any intangible

assets to Frankford Machinery, including good will8 or a customer list, and

____________________________________________
7
  Ronald testified that Frankford Associates never received the money it was
owed from Premier Cleaners (the sole asset listed on its bankruptcy
schedules), as that company also went into bankruptcy. N.T. at 71.
8
  Brookworth’s expert later defined “good will” as “time in business,
reputation in the marketplace and so forth.” N.T. at 104.


                                           -7-
J-A10027-17


stated that because the customer lists for the two companies had been

virtually identical, the Frankford Associates customer list had no value for

Frankford Machinery. N.T. at 76, 80, 84-87. Ronald testified that after

December 31, 2011, Frankford Machinery did begin to sell replacement parts

for commercial dry-cleaning equipment, as Frankford Associates had done.

Id. at 81. He said that it was a small component of Frankford Machinery’s

business, and that “because Frankford Associates was no longer in business,

it almost became something that we had to do because Frankford Associates

was no longer there.” Id. When asked whether Frankford Machinery was

selling parts to the same customers that had been Frankford Associates’

customers before it went out of business, Ronald testified, “Well that would

be speculation, but there might be some cross over, correct. Most of these

clients were outside of the area so there [is] no way of determining, very

few.” Id. at 50.

      Brookworth     introduced     a     screenshot   of   a   page   on   the

frankfordonline.com website from 2013. N.T. at 47-49; Brookworth’s Ex. 12.

The top of that page listed the contact details for Frankford Machinery. Id.

After a list of links for various services, the bottom of the page stated, “Also

. . . be sure to check out our parts website at . . . frankfordparts.com,” and

it included links to that website. Id.

      Ronald testified that Frankford Machinery had used its own website,

frankfordparts.com, for many years. N.T. at 48. Frankford Machinery did not


                                         -8-
J-A10027-17


begin     using   frankfordonline.com,         the   website   created   for   Frankford

Associates, until 2012, after Frankford Associates had gone out of business.

Id. at 50, 53. Ronald believed any income since generated from that website

to be nominal. Id. at 77, 85. Ronald was unsure who owned either website.

Id. at 50.

        Nicholas Jr. testified that he created frankfordonline.com in 1999. N.T.

at 149-50. He was listed as the registered owner, but the website was

created for the promotion of Frankford Associates, who employed him at the

time. Id. at 150. In 2007, after Frankford Machinery was in existence,

Nicholas Jr. created the website frankfordparts.com; he did so in his own

name “and then maybe Frankford Associates at that time.” Id. at 150.

Frankford Machinery has used the frankfordparts.com website since 2009,

when Nicholas Jr. became a partial owner of that company. Id. at 151.9

Nicholas Jr. stated that only the frankfordparts.com website generates sales.

Id. at 151-52.10 Nicholas was not asked at what point Frankford Machinery

began to use frankfordonline.com, or whether the ownership and registration

of that website ever changed. He also was not asked if Frankford Associates

had ever used frankfordparts.com to generate sales, or whether the

ownership and registration of that website ever changed.
____________________________________________
9
    It is unclear if Frankford Machinery used the website prior to 2009.
10
   In 2011, the site generated around $10,000 of sales for Frankford
Machinery, and that number has consistently increased by roughly 20% a
year. N.T. at 152.


                                           -9-
J-A10027-17


       Robert Gerber, the accountant for both Frankford Associates and

Frankford Machinery, testified that in mid-July 2011, Frankford Associates

stopped its revenue-generating activities. N.T. at 133-34, 139-40. After that

time, Frankford Associates continued with the “collection of receivables,

payment of payables, sales taxes, payroll taxes.” Id. at 139. Mr. Gerber was

not asked why the company stopped its traditional business-generating

operations in mid-July, prior to the depletion of its cash account.

       Mr. Gerber stated that if Frankford Associates or Frankford Machinery

owned any intangible assets, they were not listed on the companies’ balance

sheets or tax returns. N.T. at 139-40, 146. Frankford Associates did not

keep a perpetual inventory,11 and the assets listed on its internal documents

and tax returns were inaccurate and were often carried over from numbers

given to Mr. Gerber by Nicholas Kashkashian, Sr. Id. at 134-35. Regarding

good will, Mr. Gerber testified that the name “Frankford Associates” might

have had some value, but also “the name Frankford was attached to a lot of

businesses during the 12 years. There was Frankford Dry Cleaners that were

licensed under the name Frankford. There was Frankford Machinery, so

people knew the name Frankford.” Id. at 140.
____________________________________________
11
   Mr. Gerber did not explain the concept of a perpetual inventory. One court
has explained that such a system offers a running summary of inventory
items on hand by maintenance of individual accounts for each class of
goods. See Alexandre of London, Washington, D.C. Corp. v. Indemnity
Ins Co. of N. Am., 182 F. Supp. 748, 752 n.3 (D.D.C. 1960). We provide
this explanation solely to clarify our narrative; it is not part of the evidence
in the record.


                                          - 10 -
J-A10027-17


        Brookworth introduced Frankford Machinery’s customer lists from 2010

(4 pages), 2011 (9 pages), and 2012 (18 pages). N.T. at 38-39;

Brookworth’s Ex. 9.12 Brookworth introduced a “schedule of gross receipts

and gross profit,” which showed Frankford Machinery’s 2009 and 2010 gross

receipts were $1,807,688 and $1,636,627, respectively, while its 2011 and

2012     gross   receipts   were     $1,319,693    and   $2,402,062,   respectively.

Brookworth’s Ex. 8. Frankford Machinery’s 2009 and 2010 gross profits were

$8,300 and $20,627, while the 2011 and 2012 gross profits jumped to

$85,986 and $633,290. Id.

        Brookworth offered the testimony of P. Dermot O’Neill, CPA, an expert

on the topic of business valuation and financial forensics. N.T. at 89-92. Mr.

O’Neill was asked to testify as to the value of the intangible assets which

may have been transferred by Frankford Associates.

        Mr. O’Neill testified that there are three different approaches to

evaluating a company’s intangible assets, but that two of them — the “asset

approach” (based on appraisals) and the “income approach” (based on

forecasts generated from accounting documents) were not available here.

N.T. at 95-96.13 Mr. O’Neill therefore utilized the “market approach,” which

____________________________________________
12
     Each full page listed approximately 25 customers. N.T. at 38-39.
13
  Mr. O’Neill believed the “income approach” was unavailable because the
underlying accounting documents needed to generate the forecasts were
unreliable and because he needed to depend on management to make the
projections. N.T. at 95-96, 108.


                                          - 11 -
J-A10027-17


is typically used in bankruptcy situations. Id. at 96. This approach uses a

guideline     developed    from    other,      similar   companies   —   in   this   case

wholesalers of equipment sold in service industries — which suggested that

the approximate “market value of invested capital” of such companies was

the product of .45 multiplied by the company’s annual revenue. Id. at 96.14

        In this case, using data from Frankford Associates’ income statement

for the period from July 1, 2010 through June 30, 2011,15 the “market value


____________________________________________
14
  The market value of invested capital is considered the “value of the
company as a whole.” N.T. at 104.
15
     Regarding the source of this data, Mr. O’Neill testified:

        Q: And sir what is the source of that financial information?

        A: The source of that financial information is shown back in the
        income statements.

        Q: Or was it the tax return?

        A: Oh it would be the tax returns.

        Q: So you looked at the tax return for the period ending – for
        2011 you would have to have looked at the 2010 tax return for
        Frankford Associates?

        A: Correct, that is illustrated on Exhibit B.

N.T. at 101. However, “Exhibit B” to the expert’s report is not the 2010
federal income tax return for Frankford Associates (which was not entered
into evidence), but a compilation of historic income statements for the years
ending on December 31 of 2010, 2011, and 2012. Brookworth’s Ex. 13 at 9.
The numbers used in the expert’s calculations appear to be drawn from
exhibits “C” and “D” of his report, which reflect the historic income
statements for the years ending on June 30 of 2010 and 2011. Brookworth’s
Ex. 13 at 10-11


                                          - 12 -
J-A10027-17


of invested capital for Frankford Associates was $868,785. N.T. at 101, 104;

Brookworth’s Ex. 13 at 4.16 To that total, Mr. O’Neill added $53,791 of

liabilities to find the “estimated fair market asset value” for the company;17

in this case that value was $922,576. N.T. at 104; Brookworth’s Ex. 13 at 4.

From that number, Mr. O’Neill subtracted $72,976 in operating cash and

$192,743 of accounts receivable, which left approximately $657,000. N.T. at

104; Brookworth’s Ex. 13 at 4.18 Mr. O’Neill testified (and his report reflects)

that this figure represents the estimated fair market value for the

combination of Frankford Associates’ inventory, fixed assets, and intangible

assets. N.T. at 104, 106; Brookworth’s Ex. 13 at 4. Inconsistently, however,

Mr. O’Neill also testified, and his report elsewhere suggests, that this figure

represents the fair market value of the intangible assets alone. N.T. at 98,

99; Brookworth’s Ex. 13 at 5.

       Mr. O’Neill stated that the market approach does not give a breakdown

of what comprised the $657,000. N.T. at 97.19 He stated that a breakdown

____________________________________________
16
   This number represents .45 times $1,930,634, the amount of gross sales
in 2010. The market value of invested capital is the same as the equity in
this case, as Frankford Associates had no interest bearing debt.
Brookworth’s Ex. 13 at 4.
17
    “In other words it is the old accounting equation[:] the assets equal
liabilities plus equity.” N.T. at 109.
18
  The exact number was $656,857; Mr. O’Neill referred both to this number
and to $657,000.
19
   Nevertheless, his report broke down the sum of $657,000 into estimated
intangible assets of (a) $341,000 for “customer-related intangibles,” (b)
(Footnote Continued Next Page)

                                          - 13 -
J-A10027-17


of the intangible assets would require a forecast or projection that could not

be done in this case from the data available to him. Id.

        Mr. O’Neill testified that the loss of Frankford Associates’ cash as a

result of the execution on its bank account on August 15, 2011, would not

have reduced the enterprise value of the company under the market

approach. N.T. at 102-03, 107-09.20 However, he stated that if the amount

of cash and accounts receivable had changed in July or August, it would

have impacted the estimated fair market value of the tangible and intangible
                       _______________________
(Footnote Continued)
$250,000 for workforce in place, the website, and goodwill, and (c) cash
deposits totaling $66,000. Brookworth’s Ex. 13 at 5. The report did not
explain the basis for this estimated breakdown.
20
     Mr. O’Neill testified as follows:

        Q. If $117,000 or the total amount of money available to the
        company was taken out of the company a month after the date
        6/30/11 would this have a substantial impact on the valuation of
        the company going forward?
        ...
        A. Cash on hand no . . .

N.T. at 102 (emphasis added). When asked whether the change in operating
cash in August 2011 would “affect the method evaluation you selected as
among the asset approach, income approach, or market approach,” Mr.
O’Neill responded,

        Whether or not a thousand dollars of cash or ten thousand
        dollars of cash or a million dollars of cash went in or out would
        not impact that million dollars, it is still going to be a million
        dollars because that is the value of the business if you will,
        what we call that enterprise value.

Id. at 107-09 (emphasis added). Mr. O’Neill repeated that he would still
have applied the market approach, rather than the asset or income
approach, to estimate the value of the company’s assets, despite the
reduction in cash. Id. at 109.


                                           - 14 -
J-A10027-17


assets. Id. at 110.21 When asked whether his opinion would change “if the

opinion was provided as of June 30, 2012,” or after the company

discontinued all activity, Mr. O’Neill responded that a valuation after

discontinuance of business activity would not be done under the market

approach (which contemplates an on-going business), but under the

“liquidation premise of value.” Id. at 101, 104-05, 114-15.

        On June 16, 2016, the court found in favor of Frankford Machinery,

Nicholas Kashkashian, and Ronald Kashkashian. The court concluded: (1)

Frankford Machinery was not liable for any alleged transfer made by

Frankford Associates, because the two entities are separate and distinct,
____________________________________________
21
     His testimony was:

        The Court: Knowing that this event took place[,] the execution
        on substantially all the cash assets of Frankford Associates took
        place in [August] of 2011, would that have impacted either
        negatively or positively the valuation you have calculated at
        page four of your report?

        Mr. [O’Neill]: Well as you see on page four of the report I did
        subtract cash and accounts receivable that existed as of June
        30th [(to find the combined value of tangible assets, intangible
        assets, and inventory)]. Now under normal business operations
        your accounts receivable would go down, your cash would go up
        in collecting receivables and so forth. So there was some
        consideration. Now any variance would be a reduction from the
        [$922,576], the total estimated fair market value assets. So if
        there was a variance between the [$265,719 (the amount of
        cash and accounts receivable as of June 30, 2011)] and what
        happened in July or August then that would impact that
        estimated fair market value [of the combination of tangible
        assets, intangible assets, and inventory].

N.T. at 110 (emphasis added).


                                          - 15 -
J-A10027-17


“[n]on-transferees cannot be liable for alleged fraudulent conveyances”

under the PUFTA, and a “purchasing or receiving company is not responsible

for the debts and liabilities of the selling company”; (2) no claim could lie

against    Nicholas    Kashkashian       and   Ronald   Kashkashian   because   the

complaint did not allege and no evidence established that any assets were

transferred to them as individuals; (3) Brookworth failed to carry its burden

of proving that Frankford Associates was insolvent on December 31, 2011;

and (4) Brookworth failed to carry its burden of proving the (a) existence or

(b) value of any intangible assets on December 31, 2011. See Trial Ct. Op.,

at 17-20 (citations omitted).

       Brookworth filed a timely appeal, and presents the following question:

       Did the lower court commit legal error and/or abuse its
       discretion, by rendering a Decision in favor of [Frankford
       Machinery, Nicholas Kashkashian and Ronald Kashkashian] and
       against Brookworth, when the Decision was contrary to the
       weight of the trial evidence and/or trial admissions by [Frankford
       Machinery, Nicholas Kashkashian and Ronald Kashkashian], and
       Brookworth had proffered, at the non-jury trial, clear and
       unrebutted evidence which proved both liability and damages in
       this statutory fraudulent transfer claim?

Brookworth’s Brief at 3.22

       We have held:

       The general rule for a grant of a new trial on the basis that it is
       against the weight of the evidence allows the granting of a new
       trial only when the jury’s verdict is contrary to the evidence as to
       shock one’s sense of justice and a new trial is necessary to
____________________________________________
22
  Brookworth preserved this claim in a motion for post-trial relief filed on
June 29, 2016, and denied on August 22, 2016.


                                          - 16 -
J-A10027-17


       rectify this situation. . . . [T]he appellate court, in reviewing the
       refusal to grant a new trial, ordinarily considers all of the
       evidence. The court is not required to consider the evidence in
       the light most favorable to the verdict winner when passing on
       the question of whether a verdict is against the weight of the
       evidence. Rather, the court is to view all of the evidence.

Lanning v. West, 803 A.2d 753, 765-66 (Pa. Super. 2002). In addition:

       In prior matters involving review of alleged fraudulent
       conveyances, we have stated that our standard of review of a
       decree in equity is particularly limited and that such a decree will
       not be disturbed unless it is unsupported by the evidence or
       demonstrably capricious. The findings of the [judge] will not be
       reversed unless it appears the [judge] clearly abused the court’s
       discretion or committed an error of law. The test is not whether
       we would have reached the same result on the evidence
       presented, but whether the [judge’s] conclusion can reasonably
       be drawn from the evidence.

Fell v. 340 Assocs., LLC, 125 A.3d 75, 81 (Pa. Super. 2015) (citation

omitted), appeal denied, 140 A.3d 13 (Pa. 2016).

       Brookworth claims that the weight of the evidence produced at trial

established that Frankford Associates transferred intangible assets to

Frankford Machinery, and repeatedly describes these assets as “workforce in

place, customer lists, internet presence and goodwill.” Brookworth’s Brief at

5-6, 12, 15.

       Brookworth contends that the lower court erred in focusing on

December 31, 2011, as the date of the transfer of intangible assets.23

Brookworth claims that “by December 31, 2011, Frankford Associates no
____________________________________________
23
  Brookworth claims “Brookworth did not contend that the transfer date was
December 31, 2011,” Brookworth’s Brief at 22.



                                          - 17 -
J-A10027-17


longer had any intangible assets to be valued, because it had transferred

them to Frankford Machinery.” Brookworth’s Brief at 19. Brookworth states

that it was “unable to pinpoint the exact date when the Frankford Associates

intangible assets were transferred to Frankford Machinery.” Id. at 17. It

asserts that the transfer happened “sometime between July 14, 2011 and

December 31, 2011,” id. at 7, 12-13, 22, but “most likely by July 14, 2011,”

when Frankford Associates ceased generating revenue and Frankford

Machinery began to generate income from the business activities that

historically were done by Frankford Associates. Id. at 15-17, 20.24

       Brookworth relies on Mr. O’Neill’s testimony that the value for the

intangible assets was $657,000 on June 30, 2011, and that this value had

not changed by, or following, the date of transfer. Brookworth’s Brief at 6.

Brookworth points to Mr. O’Neill’s testimony that the reduction of cash in

mid-August would not have affected the valuation of intangible assets, id. at

6-7, and that the intangible assets “continued to hold the same value

through December 31, 2011, even after transfer to Frankford Machinery.”

Id. at 22. Brookworth claims that although Mr. O’Neill testified that the

value of intangible assets owned by Frankford Associates on December 31,

____________________________________________
24
   Brookworth posits: “[i]t was reasonable to conclude that the intangible
assets were transferred sometime between July 14, 2011 (the more likely
date, that Mr. Gerber testified was the date when Frankford Associates
stopped generating income) and December 2011 (the date when Frankford
Associates transferred the tangible assets to Frankford Machinery and totally
ceased operations).” Brookworth’s Brief at 17-18.


                                          - 18 -
J-A10027-17


2011, would have been done by a liquidation analysis rather than a market

approach, such an analysis “would have been totally irrelevant. By

December 31, 2011, the subject intangible assets were no longer owned by

Frankford Associates and had already been transferred to Frankford

Machinery.” Brookworth’s Brief at 23.

       Brookworth also argues that the trial court erred in concluding that the

evidence    did   not    establish   that Frankford   Associates   was   insolvent.

Brookworth argues that the evidence establishes that “as of mid-August,

2011, Frankford Associates became impecunious, unable to have sufficient

cash to pay its obligations,” Brookworth’s Brief 16, but was “insolvent likely

from as early as July 14, 2011 when it stopped generating sales income.”

Id. at 18, 19.25 Brookworth claims that the company was definitely insolvent

at the latest by December 31, 2011, as Ronald had testified. Brookworth’s

Brief at 24.

       Finally, Brookworth asserts that Ronald and Nicholas Jr. “stood to

profit from Frankford Machinery’s significantly enhanced business revenues

(freed from Frankford Associates’ significant debts) which resulted from their

direct effectuation of the 2011 fraudulent transfer of intangible assets from

Frankford Associates to Frankford Machinery.” Brookworth’s Brief at 28.

____________________________________________
25
   In a footnote, Brookworth contradicts itself by stating that Frankford
Associates was likely not insolvent in mid-July, but chose to stop operating
because of the debt incurred by its lease guarantees. Brookworth’s Brief at
19 n.4.


                                          - 19 -
J-A10027-17


Brookworth claims that Frankford Machinery, with Nicholas Jr. and Ronald as

principals, “implemented a pre-planned scheme to defraud all of the

creditors of Frankford Associates (including Brookworth), by shutting down

Frankford Associates during mid-July 2011 and shifting its business activities

and revenues to Frankford Machinery.” Id. at 27 (footnote omitted).

Brookworth contends that the PUFTA allows for joint and several liability,

and that shareholders of a transferee corporation can be the subject of

equitable relief for a fraudulent transfer. Id. at 28.

      For ease of disposition, we begin by reviewing the trial court’s

conclusion that Brookworth failed to prove the existence or value of

intangible   assets   transferred   from   Frankford     Associates   to   Frankford

Machinery. We conclude that this issue is dispositive of this appeal.

      “Generally, [the] PUFTA permits a creditor to void a transfer or

obligation upon direct or indirect proof of fraud. See 12 Pa.C.S. §§ 5101–

5110.” Fell, 125 A.3d at 81. The relevant provision of the PUFTA provides:

      A transfer made or obligation incurred by a debtor is fraudulent
      as to a creditor whose claim arose before the transfer was made
      or the obligation was incurred if the debtor made the transfer or
      incurred the obligation without receiving a reasonably equivalent
      value in exchange for the transfer or obligation and the debtor
      was insolvent at that time or the debtor became insolvent as a
      result of the transfer or obligation.

12 Pa.C.S. § 5105. The PUFTA defines “transfer” as “[e]very mode, direct or

indirect, absolute or conditional, voluntary or involuntary, of disposing of or

parting with an asset or an interest in an asset. The term includes payment


                                      - 20 -
J-A10027-17


of money, release, lease and creation of a lien or other encumbrance.” Id. §

5101. “Asset” is defined, with some exceptions inapplicable here, as

“[p]roperty of a debtor.” Id. “Property” includes “[a]nything that may be the

subject of ownership.” Id. A debtor violates Section 5105 if “(1) the

creditor’s claim arose before the transfer, (2) the debtor made the transfer

without receiving a reasonably equivalent value in exchange for the transfer,

and (3) the debtor became insolvent as a result of the transfer.” Knoll v.

Uku, 154 A.3d 329, 333 (Pa. Super.), appeal denied, No. 77 WAL 2017,

2017 WL 2874721 (Pa. July 6, 2017). For the purposes of this section,

      a person gives reasonably equivalent value if the person
      acquires an interest of the debtor in an asset pursuant to a
      regularly conducted, noncollusive foreclosure sale or the exercise
      of a power of sale for the acquisition or disposition of the interest
      of the debtor upon default under a mortgage, deed of trust or
      security agreement or pursuant to a regularly conducted,
      noncollusive execution sale.

12 Pa.C.S. § 5103.

      The party opposing the transfer bears the burden to prove the

statutory elements of a fraudulent transfer claim under the PUFTA by a

preponderance of the evidence. See Knoll, 154 A.3d at 336 (relying on In

re Wettach, 811 F.3d 99 (3rd Cir. 2016)). Where expert testimony is

presented, a fact-finder may accept or reject the expert’s credibility, and is

free to believe all, part, or none of the expert’s opinion. Nemirovsky v.

Nemirovsky, 776 A.2d 988, 993 (Pa. Super. 2001).




                                     - 21 -
J-A10027-17


         In this case, Brookworth bore the burden to prove to the trial court

that assets were transferred by Frankford Associates for less than their

reasonably equivalent value. 12 Pa.C.S. § 5105; Knoll, 154 A.3d at 336.

The trial court concluded that Brookworth failed to meet this burden, and we

agree.

         Brookworth claims that Frankford Associates transferred “workforce in

place,     customer    lists,   internet   presence   and    goodwill”     to    Frankford

Machinery. But Frankford Associates presented no evidence regarding the

transfer    of   a   workforce.    Rather,    testimony     established    that     Ronald

Kashkashian had ceased working for Frankford Associates in 2002, when he

began working for Frankford Machinery. No evidence established the date

that Nicholas Jr. began working for Frankford Machinery, and no testimony

addressed the identity or number of other employees working for Frankford

Machinery.

         The only evidence regarding Frankford Associates’ customer list

established that the two businesses had similar customer lists. While

Brookworth introduced the customer lists for Frankford Machinery between

2009 and 2012, showing an increase in customers during that time period,

no evidence was introduced establishing which new customers were former

customers of Frankford Associates, if those customers were added from

records     received   from     Frankford    Associates,    or   whether        those   new




                                           - 22 -
J-A10027-17


customers   patronized   Frankford    Machinery   to   receive   services   that

historically had been performed by Frankford Associates.

      Brookworth did elicit testimony that Frankford Associates may have

had “good will” — meaning that due to its years in operation, its name would

have been recognized by potential customers. However, no evidence was

presented that Frankford Associates’ name or logo began to be utilized by

Frankford Machinery between July 14, 2011 and December 31, 2011.

      Testimony surrounding the transfer of the website was unclear. Either

Frankford Machinery had use of the frankfordonline.com website well before

Frankford Associates went out of business, or Frankford Machinery did not

utilize the website until well after Frankford Associates went out of business.

The evidence was similarly unclear regarding the progression of ownership

or use of frankfordparts.com.

      Brookworth presented evidence that Frankford Machinery experienced

a dramatic increase in profits in the two years following the closing of

Frankford Associates, and that Frankford Machinery began servicing dry

cleaning equipment and selling replacement parts after December 31, 2011.

However, no evidence established that Frankford Machinery began offering

such services prior to December 31, 2011, let alone in mid-July 2011, as

Brookworth claims in its brief. The financial statements showing the increase

in revenue for Frankford Machinery show the profits for all of fiscal years




                                     - 23 -
J-A10027-17


2011 and 2012, and the record lacks clarity as to whether Frankford

Machinery experienced any upswing in business in mid-July 2011.26

       The expert testimony presented by Brookworth did not establish either

that any intangible assets were transferred, or the value of any such assets

at the time of transfer. Mr. O’Neill’s opinion that intangible assets existed as

of June 30, 2011, was based on what he deemed a “market approach” to

calculating their value. Using that approach, he found the total value of a

company based on an estimated market rate, added the amount of

liabilities, and subtracted the cash held by the company and the amount of

its accounts receivable; what remained was an estimate for the total value

of tangible and intangible assets and inventory, in this case $657,000. But

Mr. O’Neill’s testimony was inconsistent as to whether this number included

the combination of inventory, tangible assets, and intangible assets or just

the intangible assets alone, and we note that his June 30, 2011, estimate

did not exclude the tangible assets valued at $83,000 that are presumed to

have later left the company. Most importantly, Mr. O’Neill’s testimony did

not identify exactly what the intangible assets were; from his amalgamated

number alone it is impossible to determine which assets may have been




____________________________________________
26
   As noted above, to the extent the record established an increase in profits
for Frankford Machinery, Brookworth still bore the burden of establishing
that some assets were transferred during the insolvency of Frankford
Associates or that their transfer caused the insolvency.


                                          - 24 -
J-A10027-17


absorbed by Frankford Machinery or the value of those assets, and he

testified that he was unable to provide such a breakdown.

       That the trial court focused on the expert’s failure to opine on the

value of the intangible assets as of December 31, 2011, rather than on the

now-claimed (but uncertain) transfer-date of “between” July 14, 2011, and

December 31, 2011, is of no import.27 The trial court is correct that the

expert simply did not testify to the value of the intangible assets (or, rather,

the combination of tangible and intangible assets and inventory) following

June 30, 2011. Despite Brookworth’s assertions, Mr. O’Neill did not say that

his estimated value of intangible assets based on the market approach and

the 2010 tax returns would remain constant for the following year. To the

contrary, Mr. O’Neill testified that a change in the revenue of the company

or a change to the amount of cash on hand would affect the top-down

calculation of intangible assets. And, if the company were to close or to

cease generating revenue, as it did, Mr. O’Neill testified that the market

approach would not even be the appropriate tool to yield a valid estimate for

intangible assets.

       Given the foregoing, we cannot say that the weight of the evidence is

contrary to the verdict or that the verdict shocks the conscience of the court.

Lanning, 803 A.2d at 765-66. We conclude, as did the trial court, that
____________________________________________
27
   We note that Brookworth inconsistently asserted in its opening statement
at trial that the operative date of the transfer was December 31, 2011, and
is therefore in part to blame for any resulting confusion.


                                          - 25 -
J-A10027-17


Brookworth failed to carry its burden to prove by a preponderance of the

evidence that any intangible assets were transferred to Frankford Machinery

for less than their reasonably equivalent value, and we affirm the judgment

of the trial court on that basis.28

       Judgment affirmed.

Judgment Entered.




Joseph D. Seletyn, Esq.
Prothonotary



Date: 9/26/2017




____________________________________________
28
   Because we conclude that the weight of the evidence does not establish
that a transfer of intangible assets occurred, we need not address whether
the evidence established the other statutory requirements necessary to
prevail on a claim of fraudulent transfer.


                                          - 26 -
