The following e-filed documents, listed by NYSCEF document number (Motion 008) 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 148, 149, 150, 151, 152, 153, 154, 155, 156, 160 were read on this motion to/for DISMISS. The following e-filed documents, listed by NYSCEF document number (Motion 009) 135, 136, 157, 158, 159 were read on this motion to/for DISMISS. DECISION + ORDER ON MOTION INTRODUCTION In Motion Seq. No. 08, Defendants Robert Morello, Cindy Meengs, Serge Abend, John Price, Brent Harris, Scott Lloyd, James Smith, Milton Langer, Joseph Skrapits, Gordon Garrett, and Matthew Morganelli move to dismiss Plaintiffs’ amended complaint pursuant to CPLR 3211(a)(1), (a)(5), and (a)(7). In Motion Seq. No. 09, Defendants James Massa (“Massa”) and Eddie Huey (“Huey”) adopt the other Defendants’ arguments and seek to dismiss the amended complaint. FACTUAL AND PROCEDURAL BACKGROUND This is a breach of fiduciary duty action related to Defendants’ alleged misconduct in their roles as directors, officers and/or employees of a Nevada software company, nonparty Giga Entertainment Media, Inc. (“GEM”). Plaintiffs are shareholders and/or former officers and directors of GEM. Defendant Massa is GEM’s former CEO, Defendant Huey is GEM’s former CTO, Defendant Morganelli is Massa’s former personal assistant, and Defendant Garrett is GEM’s former CFO. The other Defendants were members of GEM’s board of directors. Plaintiffs allege that Defendants, while in control of GEM, breached their fiduciary duties to Plaintiffs in a litany of ways. Among other things, Plaintiffs allege that Defendants forced the company into bankruptcy in a scheme to purchase company assets for themselves through an LLC that they created (Amended Complaint, NYSCEF Doc. No. 118,
101, 221). In June 2019, GEM filed for Chapter 7 bankruptcy in the Eastern District of Kentucky (see In re Giga Entertainment Media, Inc., Case No. 19-51291). Subsequently, the bankruptcy trustee conducted an auction of GEM assets, and the same Plaintiffs as those appearing in this action purchased litigation rights pursuant to an Asset Purchase Agreement (“APA”). Under the APA, the Plaintiffs purchased the right to bring “[c]laims and causes of actions for avoidable transfers” and “[c]laims and causes of action…against prior directors, officers and shareholders of the company including…breach of fiduciary duty” (APA, NYSCEF Doc. No. 130, §§2.1[a]-[b]). Plaintiffs then filed an adversary proceeding under the umbrella of the bankruptcy action (Bankruptcy Adversary Proceeding Complaint, NYSCEF Doc. No. 131). The Adversary Proceeding complaint was a complaint to avoid and recover preferential and fraudulent transfers that Defendants Massa and Huey allegedly made in their roles at GEM. In particular, the Adversary Proceeding complaint contained causes of action for: avoidance and recovery of preferential transfers under 11 USC §§547(b)(1) and 550 (first and second counts); avoidance and recovery of fraudulent transfers under 11 USC §§544(b)(1), 548(a)(1)(A) and 550, as well as Kentucky’s Uniform Voidable Transactions Act (third and fifth counts); avoidance and recovery of constructive fraudulent transfers under 11 USC §§548(a)(1)(B) and 550 (fourth count); and disallowance of claims under 11 USC §502(d) (sixth count) (Bankruptcy Adversary Proceeding Complaint, pp. 7-16). Schedule A to the Adversary Proceeding complaint detailed the precise transfers that were at issue. For example, paragraph 1 of Schedule A states: All payments of consulting fees to James Massa in excess of $6,500 per month. Massa changed his consulting fee from $6,500 per month to $20,000 per month or more without formal authorization from the Board of Directors. (Claims relating to these payments are asserted against Defendant Massa). (Bankruptcy Adversary Proceeding Complaint, Schedule A, 1). Therefore, using that example, through the causes of action set forth in the main body of the Adversary Proceeding complaint, plaintiffs were seeking to have the bankruptcy court void any “consulting fees to James Massa in excess of $6,500.” However, in addition to the numerous allegations relating to allegedly fraudulent or preferential transfers, the Adversary Proceeding complaint also included more general allegations of corporate mismanagement and breaches of fiduciary duty. For instance, plaintiffs alleged that Massa and Huey “intentionally mismanaged GEM to place it in bankruptcy,” “set up a secret corporate entity,” and made misrepresentations of material fact to investors, officers, and directors (Bankruptcy Adversary Proceeding Complaint, 18). The bankruptcy court issued several key rulings related to the Adversary Proceeding. First, on June 2, 2021, the court dismissed the sixth count for disallowance of claims for lack of standing (June 2, 2021 Bankruptcy Order, NYSCEF Doc. No. 87). Then, on June 22, 2021, the court issued an order granting in part and denying in part defendants’ motion to dismiss (June 22, 2021 Bankruptcy Order, NYSCEF Doc. No. 88). In that order, the court dismissed without prejudice the five remaining causes of action only as to certain Schedule A transfers but not as to other Schedule A transfers (id.). In particular, the court stated that as to counts 1 and 2 of the Adversary Proceeding complaint, the claims “concerning the transactions listed in categories 2, 3, 9, and 20(c)-(g) of the Complaint’s Schedule A are not dismissed and will proceed forward” (id., 1). Under the June 22, 2021 Bankruptcy Order, all transfers other than those described in paragraphs 2, 3, 9, and 20(c)-(g) of the Schedule A were dismissed, but only without prejudice. Subsequently, the court issued an additional order on December 2, 2021, stating that “[a]ll remaining claims in Plaintiffs’ Complaint are DISMISSED WITH PREJUDICE” (i.e., counts 1 and 2 to the extent they related to the transactions in categories 2, 3, 9, and 20[c]-[g] of the Schedule A) (December 2, 2021 Bankruptcy Order, NYSCEF Doc. No. 91 [emphasis added]). The court then issued an amended judgment on December 3, 2021 stating that the court had “entered orders dismissing all Counts of the Complaint,” and that, accordingly, plaintiffs’ complaint was “DISMISSED in full” (December 3, 2021 Bankruptcy Order, NYSCEF Doc. No. 93). The court noted, “This is a final judgment” (December 3, 2021 Bankruptcy Order). The bankruptcy court, however, never explicitly stated that the claims dismissed without prejudice by the June 22, 2021 order were now considered to be dismissed with prejudice. Thus, the bankruptcy court apparently dismissed only without prejudice the first through fifth causes of action in the Adversary Proceeding complaint to the extent that those causes of action related to the following transfers described in the Schedule A: 1. All payments of consulting fees to James Massa in excess of $6,500 per month. Massa changed his consulting fee from $6,500 per month to $20,000 per month or more without formal authorization from the Board of Directors. (Claims relating to these payments are asserted against Defendant Massa). 4. Unexplained Online Transfers from Debtor’s Accounts. No explanation is provided in the Company’s books and records as to the purpose of the transfer or the transferee for each of the following transactions: a. 7/26/18 — $21,000 b. 7/30/18 — $10,000 c. 8/16/18 — $38,000 d. 8/24/18 — $84,062.30 e. 8/24/18 — Transfer to Wells Fargo $5,000 f. 8/30/18 — 80,000 (Claims relating to these payments are asserted against Defendants Massa and Huey). 5. Hotel Payments expensed to the Debtor which appear to be for hotel stays by James Massa. There is no explanation on the company records of the purpose or nature of each hotel stay and no backup documents are contained in the company records. There is no explanation of the hotel guest, no receipt, no explanation of the nature of the stay, or business conducted on each visit. … 6. Unexplained Transfers from Debtor’s Accounts. No explanation (or inadequate explanation) is provided in the Company’s books and records as to the purpose of the transfer or the transferee for each of the following transactions. a. 7/26/18 — transfer — $21,000 b. 7/30/18 — transfer — $10,040 c. 8/16/18 — transfer to Payroll — $38,000 (no breakdown of the payment is provided) d. 8/17/18 — transfer to money market $2K e. 8/24/18 — transfer from money market — $84,000 f. 8/30/18 — transfer from money market — $80,000 g. 9/14/18 — $19,000 transfer to checking h. 9/20/18 — $5,000 transfer from money market i. 9/27/18 — $33,850 payroll deposit (no breakdown of the payment is provided) j. 9/27/18 — $33,850 transfer to checking k. 10/11/18 — $10,000 — chase savings (deleted) l. 10/31/18 — $12,000 — chase payroll — on line transfer to checking m. 10/31/18 — $19,578.50 — wire transfer for payroll expense n. 11/14/18 — $7800 — to payroll o. 11/19/18 — $7658 — online transfer to payroll p. 11/21/18 — $7650 — online transfer payroll NOTABLY, alleged payroll transfers are haphazard, in uneven and changing amounts and company books are without explanation as to the payee or amount of specific payments. (Claims relating to these payments are asserted against Defendants Massa and Huey). 7. Check number 1795 in the amount of $235 dated on or about 6/28/19 payable to incorporate.com. (Claims relating to these payments are asserted against Defendants Massa, and Huey and are not asserted against the transferee). 8. Extensive payments allegedly for Rent which are not properly explained including: a. series of payments to TIAA Financial from June 2018 forward logged as Lease Payments in the amount each of $2,594.64. b. 7/5/18 — $10,800 payment to We Works (Check 1785) c. 7/10/18 — $10,000 payment to We Works (Check 1808) d. 7/20/18 — $4,335 payment to 575 Fifth Avenue (ledgered as rent) e. 7/31/18 — $2,000 payment to Altus (ledgered as rent) f. 8/13/18 — $9,000 payment to We Works g. 8/29/18 — $4,335 payment to 575 Fifth Avenue (ledgered as rent) h. 8/31/18 — $5,719 payment to Webster Bank (ledgered as rent) i. 9/6/18 — $6,800 — payment to We Works j. 9/27/18 — $5719 payment to Altus (ledgered as rent) k. 10/3/18 — $6,000 — payment to We Works l. 11/2/18 — $5,719 payment to Altus (ledgered as rent) m. 2/4/19 — $3,417.44 — payment to We Works n. 3/4/19 — $3,522.14 — payment to We Works Alleged rent payments are haphazard, in uneven and changing amounts and are made to multiple entities in concurrent time periods. (Claims relating to these payments are asserted against Defendants Massa and Huey and are not asserted against the named transferees). 10. Three unexplained payment to Lexi Ryan (no explanation for who Lexi Ryan in company books). Payments were: (a) 10/10/18 — $7500; (b) 11/5/18 — $5,000; (c) 11/5/18 — $952.25 (Claims relating to these payments are asserted against Defendants Massa and Huey and are not asserted against Lexi Ryan). 11. Unexplained withdrawals with no explanation on the company’s records a. 10/25/18 — $120,000 (no explanation for withdrawal) b. 12/7/18 — $4,000 PNC BANK — WITHDRAWAL. NO EXPLANATION (Claims relating to these payments are asserted against Defendants Massa and Huey). 12. Unexplained Paypal payment with no explanation on the company’s records in the amount of $2,875 on 11/6/18. Claims relating to this payment are asserted against Defendants Massa and Huey. 13. Payment of $15,000 dated 11/2/18 to Jared Striner listed as consulting fee. It is believed that this payment was made to Mr. Striner to pay an SEC fine levied against him in the same amount which would be prohibited. Claims relating to this payment are asserted against Defendants Massa and Huey. 14. Payment of $2,500 on 1/16/19 to Travis Pregent who appears to be a personal injury attorney in Massachusetts. No explanation is provided for this payment on the company’s books and records. Claims relating to this payment are asserted against Defendants Massa and Huey. 15. Payment of $5,774.94 payable to Sprechman on 11/5/18. There is no explanation for this payment on the company’s books and records. Claims relating to this payment are asserted against Defendants Massa and Huey but not against the stated transferee. 16. Payment of $5,000 (unknown payee) on 1/30/19 for Meals and Entertainment (No recipient stated or detail provided of payment). Claims relating to this payment(s) are asserted against Defendants Massa and Huey. 17. $10,400 transaction ledgered on 7/27/18 with no explanation or backup for the transaction. Claims relating to this payment are asserted against Defendants Massa and Huey. 18. $3,000 check by the Debtor on or about February 20, 2019 (check is listed as number 20192). No explanation is provided for this payment and the payee cannot be identified from records provided by the Debtor. Claims relating to this payment are asserted against Defendants Massa and Huey. 19. Extensive “payroll payments” payments are ledgered on the Debtor’s books and records and reflected in PNC bank statements in haphazard amounts with no payment detail and in excess of the believed company payroll for each pay period. There are also PNC ACH payments in the bank statements for which transactions cannot be matched. It is believed that some of these payments are fraudulent to support improper payroll and other payments. The company has failed to provide or maintain records relating to these payments and has refused to provide these records. Claims relating to these payments are asserted against Defendants Massa and Huey but not against the transferee banks or payroll companies… 20. Several Transfer transactions occurred in Aslo Bank in April — May 2019 which had no explanation for the transfer transactions. The Debtor company has failed to provide or maintain records relating to these payments and has refused to provide these records. Claims relating to these payments are asserted against Defendants Massa and Huey but not against the transferee banks. Such payments appear as follows: a. 4/19/19 — $2200 TRANSFER b. 4/23/19 — $5600 TRANSFER 21. Several Withdrawals were made from PNC bank in March — April 2019 which had no explanation for the withdrawals. The Debtor company has failed to provide or maintain records relating to these payments and has refused to provide these records. Claims relating to these payments are asserted against Defendants Massa and Huey but not against the transferee banks. Such payments appear as follows: a. 3/11/19 — $4,000 b. 3/12/19 — $1,000 c. 3/14/19 — $10,000 d. 4/09 — $7,679.43 e. 4/11 — $5,000 (Schedule A). Rather than continue to pursue their claims in bankruptcy court, Plaintiffs filed their original complaint in this action on October 6, 2021 (Complaint, NYSCEF Doc. No. 32).1 The original complaint alleged, among other things, that Defendants Massa and Huey converted GEM corporate assets for personal use, “putting in false expenses for reimbursement” (Complaint, NYSCEF Doc. No. 32, 1), and that the other Defendants breached their duties to the company by failing to implement oversight procedures to monitor Massa and Huey (Complaint, 3). The complaint additionally alleged that Defendants intentionally bankrupted the company to convert software and start their own company (Complaint, 4). The complaint included causes of action for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, breach of employment contract, conversion, unjust enrichment, and an accounting (Complaint). Defendants filed motions to dismiss the original complaint, and oral argument was held on the motions on June 17, 2022. Plaintiff then filed the operative amended complaint, and the court denied the original motions to dismiss as moot. The amended complaint includes a number of new allegations related to breach of fiduciary duty. In particular, Plaintiffs allege Defendants made misrepresentations to shareholders about the state of GEM (Amended Complaint,
