RESULT DATE: Nov. 13, 2012
Muse Family Enterprises, Ltd., Linda Ehlers as Co-Trustee for the Muse Children's GS Trust, JRM Interim
Investors, LP, Oak Stream Investors, II, Ltd., Wood Luxembourg Properties, SARL, Holbrook Properties, Inc.,
Strongback Holdings, ABF Note Holdco, LLC, A WF Note Holdco, LLC, BCC Note Holdco, LLC, BFC Note
Holdco, LLC, DVB Note Holdco, LLC, FFC Note Holdco, LLC, IFC Note Holdco, LLC, NCC Note Holdco, LLC,
RMA Note Holdco, LLC, TTMNote Holdco, LLC, TW Note Holdco, LLC, and VOC Note Holdco, LLC v. Mira
Overseas Consulting Ltd., BTM Funding Inc., David Thomas Smith, Carmen Copple (Silva) Smith, an
individual; Carmen Copple (Silva) Smith, as Trustee of the Carmen Copple Silva Revocable Trust dated Sept.
24, 2009, and Does 1 through 10, inclusive (BC445532) 12-JV_3183
FURTHER DESCRIPTION: Fraudulent Transfer of Real Property
ATTORNEY Plaintiff - Don Howarth, Jessica L. Rankin (Howarth & Smith, Los Angeles); F. Phillip Hosp, Jon L.
Rewinski (Locke Lord, LLP, Los Angeles).
Defendant - Saied Kashani (Law Offices of Saied Kashani, Los Angeles) for David Smith, Carmen Copple
Smith and Carmen Copple Silva Trust.
TECHNICAL Plaintiff - John F. Van der Zee, real estate appraisal, Los Angeles.
FACTS: David Smith is the sole shareholder of BTM Funding Inc. The Muse plaintiffs invested in loans made
by BTM Funding Inc. to finance the construction of churches around the country. In 2009, the Muse plaintiffs
discovered significant problems with the church loan program. The Muse plaintiffs also discovered that real
property purchased by BTM Funding Inc. had been quitclaimed from BTM Funding Inc. to David Smith, from
David Smith to his wife Carmen Copple Smith, and from Carmen Copple Smith to the Carmen Copple Silva
Revocable Living Trust.
The Muse plaintiffs sued for breach of contract, fraud: intentional misrepresentation, fraud: concealment,
negligent misrepresentation, breach of fiduciary duty, and for fraudulent transfer, alleging that David Smith
was the alter ego of BTM Funding Inc. David Smith allowed BTM Funding Inc. to default and, faced with a
summary judgment motion, agreed that BTM Funding Inc. was liable for $21 million for its breach of
contract. Judgment for this amount was entered against BTM Funding Inc. The parties then tried to a jury
the issue of whether the Kobe Bryant house in Pacific Palisades was fraudulently transferred to David
Smith and whether David Smith was the alter ego of BTM Funding Inc.
CONTENTIONS: PLAINTIFF'S CONTENTIONS: The Muse plaintiffs contended that David Smith is the alter
ego of BTM Funding Inc. and liable for its debt of $21 million to the Muse Plaintiffs. The Muse Plaintiff also
contended that the real property was fraudulently transferred.
DEFENDANT'S CONTENTIONS: Defendants contended that the real property was not fraudulently
transferred and that David Smith was not the alter ego of BTM Funding Inc
JURY TRIAL: Length, 10 days; Deliberation, three hours
RESULT: The jury found that BTM Funding Inc. had fraudulently transferred real property (the home formerly
owned by Kobe Bryant in Pacific Palisades) to its sole shareholder, David Smith.
The jury found damages against David Smith in the amount of $10 million for the fraudulent transfer.
The jury also found that David Smith is the alter ego of BTM Funding Inc., making David Smith personally
liable for the debts of the company, including Plaintiffs' judgment against BTM Funding Inc. in the amount of