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Neighbors Investments, Inc. v. Baumgartner

United States District Court, W.D. Missouri, Central Division

July 10, 2018

NEIGHBORS INVESTMENTS, INC., Plaintiff,
v.
DAVID G. BAUMGARTNER, and THE BANK OF VERSAILLES, Defendants.

          ORDER

          DOUGLAS HARPOOL UNITED STATES DISTRICT JUDGE

         Before the Court are Plaintiff's Motion to Remand (Doc. 11) and Defendants' Motion to Transfer Venue (Doc. 17).

         BACKGROUND

         This matter arises from a dispute concerning the alleged actions of David Baumgartner and The Bank of Versailles arising from the management of Gentle Slopes Partners, LLC (Gentle Slopes). Neighbors Investments, Inc., and David Baumgartner were each 50% members of Gentle Slopes. Neighbors Investments asserts direct and derivative state law claims against Defendants.

         Gentle Slopes invested in real estate acquisition, development, and sales in the Lake of the Ozarks area. Baumgartner was the day-to-day managing member of Gentle Slopes, and he controlled Gentle Slopes' funds in bank accounts at the Bank of Versailles. Baumgartner is also the President of the Bank of Versailles. To summarize the Complaint, Neighbors Investments alleges that Baumgartner made unauthorized payments from Gentle Slopes to himself, illegitimately drew from Gentle Slopes' lines of credit, and provided false financial information to neighbors Investments and an accounting firm that prepared Gentle Slopes' financial statements and tax returns. Neighbors Investments guaranteed Gentle Slopes' loans and lines of credit.

         When Gentle Slopes began to lack the funds to maintain its business, Baumgartner allegedly threatened to allow Central Bank of Lake of the Ozarks to foreclose on Gentle Slopes' properties if Neighbors Investments did not supply the funds needed for Gentle Slopes' projects. On April 12, 2011, Neighbors Investments filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code after Central Bank and the Bank of Versailles filed foreclosure actions on Gentle Slopes' properties. On April 25, 2016, the United States Bankruptcy Court for the District of Kansas entered a final decree in the bankruptcy case. On April 26, 2016, the bankruptcy court administratively closed the case. Plaintiff's Complaint here includes seven causes of action:

1. Count One is a derivative action brought on behalf of Gentle Slopes for an accounting.
2. Count Two is a direct and derivative action for breach of fiduciary duty.
3. Count Three is a direct and derivative action for fraudulent misrepresentation.
4. Count Four is a direct and derivative action for negligent misrepresentation.
5. Count Five is a derivative action for constructive trust.
6. Count Six is a derivative action for conversion.
7. Count Seven is a direct and derivative action for civil conspiracy to ...

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