Candlewood Shores Estates, Inc. v. Klein (In Re Candlewood Shores Estates, Inc.)

MEMORANDUM AND ORDER

ROBERT L. KRECHEVSKY, Bankruptcy Judge.

I

Candlewood Shores Estates, Inc., the debtor in a chapter 11 case, seeks in this proceeding 1 to invalidate a recorded mortgage deed from the debtor to Barry M. Klein, the defendant. The gravamens of the debtor’s complaint are that the mortgage deed was unauthorized by the debtor and that the mortgage transaction violates statutory and common law principles concerning self-dealing by corporate insiders or officers.

II

BACKGROUND

The debtor corporation was formed in December, 1962 by the defendant, Leroy Burke and Edward J. Henry, each…