ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT

ROBERT KWAN, Bankruptcy Judge.

Pending before the court is the motion of defendants Bahram Bordbar and Malahat Bordbar, individually and as Trustees of the Bordbar Family Trust, and Leya Technologies, LLC (together "Defendants") to dismiss claims of plaintiff Wesley H. Avery, Chapter 7 Trustee ("Plaintiff"), in the first amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), Electronic Case Filing Number ("ECF") 10 (the "Motion"). The court conducted an initial hearing on the Motion on December 3, 2019. Brian L. Davidoff, of the law firm of Greenberg Glusker Fields Claman & Machtinger LLP, appeared for Defendants. Carmela T. Pagay, of the law firm of Levene, Neale, Bender, Yoo & Brill, L.L.P., appeared for Plaintiff. Todd E. Phillips and Kevin M. Davis, of the law firm of Caplin & Drysdale, Chartered, appeared for the Intervening Parties Jon and Maria Ternstrom, Cameron and Michelle Witzler and Collette Carpenter, individually and in her capacity as administrators of the estates of Clayton O. Carpenter (also referred to herein as "Crash Victim Claimants"). After the hearing on December 3, 2019, the court took the motion under submission at the conclusion of the hearing and set a further hearing on December 10, 2019 to announce a ruling on the motion. Having considered the moving and opposing papers and the oral arguments of the parties, the court now issues this written order.

As orally announced at the hearing on December 3, 2019, the court will grant the motion to dismiss Claim 20 for substantive consolidation on procedural grounds, with leave to file an amended claim. Plaintiff did not give notice of the claim for substantive consolidation to the creditors of Defendants, who and which are nondebtor parties, to whom and to which notice was and is required. In re Mihranian, 937 F.3d 1214, 1218 (9th Cir. 2019). Because the court grants the motion to dismiss Claim 20 on procedural grounds for lack of notice, the court does not reach the merits of the motion seeking dismissal of the claim for failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6). As suggested by the court, if Plaintiff intends to file an amended substantive consolidation claim or motion, he should file it as a separate proceeding so that the creditors of debtor and the nondebtor party defendants need not involve themselves in the other claims in this adversary proceeding.

As orally announced at the hearing on December 3, 2019, the court will grant the motion to dismiss Claim 21 for trade secret misappropriation because the claim did not adequately allege the existence of a trade secret as required by California Civil Code, § 3426.1(d). Federal Rule of Civil Procedure 8(a)(2) requires Plaintiff to allege in a pleading that states a claim for relief "a short and plain statement of the claim showing that the pleader is entitled to relief." See also, Alta Devices, Inc. v. LG Electronics, Inc., 343 F.Supp.3d 868, 876 (N.D. Cal. 2018). A complaint that fails to meet this standard may be dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6). Id. Federal Rule of Civil Procedure 8(a) requires that a plaintiff must plead "enough facts to state a claim to relief that is plausible on its face." Id., citing and quoting, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id., citing and quoting, Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "The plausibility standard is not akin to a probability requirement, but it asks for more than a sheer possibility that a defendant has acted unlawfully." Id. In ruling on a motion under Federal Rule of Civil Procedure 12(b)(6), the court must "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Id., citing and quoting, Manzarek v. St. Paul Fire & Marine Insurance Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

To state a plausible claim for trade secret misappropriation under the California Uniform Trade Secrets Act, California Civil Code, § 3426 et seq., Plaintiff must "describe the subject matter of the trade secret with sufficient particularity to separate it from matters of general knowledge in the trade or of special persons who are skilled in the trade, and to permit the defendant to ascertain at least the boundaries within which the secret lies." Alta Devices, Inc. v. LG Electronics, Inc., 343 F.Supp.3d at 880-881 (citations omitted). California Civil Code, § 3426.1(d) provides that "`Trade secret' means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy."

Plaintiff did not adequately describe the existence of a trade secret as required by California Civil Code, § 3426.1(d) by alleging in paragraph 185 in the first amended complaint that Debtor's trade secrets consisted of "proprietary manufacturing processes, information relating to research, customer lists, product plans, services, customer data, marketing strategies, finances, strategic plans, business plans and/or confidential business related information" because such description, as Defendants argue, is just a laundry list of every type of information that a company like Debtor could be expected to have, which does not give sufficient particularity to Defendants to give them fair notice of what precisely they are accused of misappropriating in the way of trade secrets. Federal Rule of Civil Procedure 8(a)(2); Alta Devices, Inc. v. LG Electronics, Inc., 343 F.Supp.3d at 880-881; see also, Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (a pleading must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests") (citations omitted).

Although the court grants the Motion as to Claim 21, the court will grant leave to amend pursuant to Federal Rule of Civil Procedure 15(a)(2), which provides that courts should freely give leave in the interests of justice, because here, Plaintiff's amendment of Claim 21 for trade secret misappropriation would be the first amendment of such claim, and Defendants have not demonstrated that amendment would be futile or that they would suffer any prejudice from amendment.

Because, as discussed below, the court is otherwise denying the motion as to the remaining objected-to claims and ordering Defendants to answer the surviving claims in the first amended complaint, if Plaintiff intends to amend Claim 21, he should file and serve a supplement to the first amended complaint, which will then be considered as part of the amended complaint if it is allowed to proceed.

The court will deny the motion to dismiss as to Plaintiff's Claims 5 and 6 for constructive fraudulent transfer based on insolvency under California Civil Code, § 3439.05(a) because the claims adequately plead the required elements of insolvency and transfers lacking reasonably equivalent value to allege plausible claims for relief. California Civil Code, § 3439.05(a) provides: "A transfer made or obligation incurred by a debtor is voidable 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." The two requirements of a claim under California Civil Code, § 3439.05 are that the transfer was made without receiving reasonably equivalent value, and the debtor was either insolvent or became insolvent as a result of the transfer. Id.

"To determine whether a pleading adequately states a plausible claim for relief, a court must first take `note of the elements a plaintiff must plead to state a claim.'" Phillips and Stevenson, Rutter Group Practice Guide: Federal Civil Procedure Before Trial, California & Ninth Circuit Edition, ¶ 8:125 (online edition, April 2019 update), citing and quoting, Ashcroft v. Iqbal, 556 U.S. 662, 675 (2009). "Iqbal, supra, then requires a two-prong analysis:—First, conclusory allegations are disregarded;—Second, `[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.'" Id., citing and quoting, Ashcroft v. Iqbal, 556 U.S. at 679. To determine whether a claim is plausible, a court should consider the complaint's factual allegations "together with all reasonable inferences" from the allegations. Id., ¶ 8:127a, citing and quoting, Cafasso, U.S. ex rel. v. General Dynamics C4 Systems, Inc., 637 F.3d 1047, 1054 (9th Cir. 2011). Moreover, the "complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible." Id., ¶ 8:127b, citing and quoting, Hernandez-Cuevas v. Taylor, 723 F.3d 91, 103 (1st Cir. 2013). "The relevant question . . . in assessing plausibility is not whether the complaint makes any particular factual allegations but, rather, whether `the complaint warrant[s] dismissal because it failed in toto to render plaintiffs' entitlement to relief plausible.'" Id., ¶ 127c, quoting, Rodriguez-Reyes v. Molina-Rodriguez, 711 F.3d 49, 55 (1st Cir. 2013), quoting, Bell Atlantic Corp. v. Twombly, 550 U.S. at 569 n. 14.

The first amended complaint, ECF 9, adequately pleads the element of insolvency in paragraphs 5, 50, 55 and 72, alleging in paragraph 5 that Plaintiff has reviewed Debtor's books and records that have been made available to him and his counsel and in paragraph 50 that "as of at least September 2013, and at all times since, Prototype [i.e., Debtor] has been insolvent according to its books and records", which the court construes as allegations of balance sheet insolvency within the meaning of California Civil Code, § 3439.02(a) (and 11 U.S.C. § 548(a)(1)(B)(ii)(I)).

The so-called balance sheet test for insolvency is set forth in California Civil Code, § 3439.02(a), and Section 101(32) of the Bankruptcy Code, 11 U.S.C. Bui v. Perez (In re Tenorio), BAP No. CC-17-1102 FLKu, 2018 WL 989691, slip op. at *9. (9th Cir. BAP, February 8, 2018). Under California Civil Code, § 3439.02(a), "[a] debtor is insolvent if, at a fair valuation, the sum of the debtor's debts is greater than the sum of the debtor's assets." See also, In re Tenorio, 2018 WL 989691, slip op. at *9. 11 U.S.C. § 102(32)(A) states that the term "insolvent" means "with reference to an entity other than a partnership and a municipality, financial condition such that the sum of such entity's debts is greater than all of such entity's property, at a fair valuation, exclusive of—(i) property transferred, concealed, or removed with intent to hinder, delay, or defraud such entity's creditors; and (ii) property that may be exempted from property of the estate under section 522 of this title". See also, In re Tenorio, 2018 WL 989691 at *9. "In an action to recover a preference or a fraudulent transfer, insolvency may be determined on the basis of a `balance sheet' test. This correlates with the definition of `insolvent' in [11 U.S.C.] § 101(32) that a corporation is insolvent if the sum of the entity's debts is greater than all of the entity's property at a fair valuation." Id., citing and quoting, Everett v. Thomas Capital Investments In re Pacific Thomas Corp.), 543 B.R. 7, 13 (Bankr. N.D. Cal. 2015). "Thus, both federal and state law agree that, under the `balance sheet' test, a debtor is insolvent when its liabilities exceed its assets." Id., citing and quoting, Sierra Steel, Inc. v. Totten Tubes, Inc. (In re Sierra Steel, Inc.), 96 B.R. 275, 277 (9th Cir. BAP 1989) (alteration omitted).

Plaintiff's allegation that, upon review, the books and records of Debtor show that Debtor was insolvent at least by September 2013 plausibly alleges the element of insolvency for purposes of a claim for constructive fraudulent transfer under California Civil Code, § 3439.05(a) because the Debtor's books of account are likely to be probative of its balance sheet solvency or insolvency, and thus, if the allegation were true, the court could reasonably infer that the books and records showed that Debtor's liabilities exceeded its assets, which would satisfy the balance sheet test of insolvency.

The sufficiency of Plaintiff's pleading of insolvency in this case is supported by examples in the case law. In Beskrone v. OpenGate Capital Group (In re Pennysaver USA Publishing, LLC), 587 B.R. 445 (Bankr. D. Del. 2018), the court held that the plaintiff trustee sufficiently pleaded a constructive fraudulent transfer claim under the California Uniform Fraudulent Transfer Act, California Civil Code, § 3439.05, and other applicable law, by alleging that the transfer was for less than reasonably equivalent value at a time when debtors were insolvent. In Pennysaver USA Publishing, the plaintiff specifically described "the Debtors' declining financial performance and [increasing] loan obligations," thereby demonstrating insolvency. Id. at 456-459. The court in Pennysaver USA Publishing also stated that at the motion to dismiss stage, the plaintiff only needed to adequately plead a constructive fraud claim by alleging a transfer for less than reasonably equivalent value at a time when the debtors were insolvent, and specifically, that "[i]nsolvency is best left to discovery to determine and should not generally be decided on a motion to dismiss[ ] . . . because the determination of insolvency is highly fact-specific and `should be based on seasonable appraisals or expert testimony.'" Id. at 456 and 459.1 The pleading of balance sheet insolvency in this case is at least as strong as the plaintiff's allegations in the Pennysaver USA Publishing case.

Similarly, the district court in Sorenson v. New Koosharem Corporation, Case No. 15-cv-01088-RGK (PJWx), 2015 WL 12426149 (Bankr. C.D Cal., October 15, 2015) held that allegations that the transferor was indebted to the complaining creditor and had transferred assets without receiving anything in exchange, and became insolvent as a result of the transfer, were sufficient to show insolvency and a transfer made for lack of reasonably equivalent value, plead a claim under California Civil Code, § 3439.05, and survive a Civil Rule 12(b)(6) motion to dismiss. Id., 2015 WL 12426149, slip op. at *8. The first amended complaint, ECF 9, adequately pleads the element of insolvency under this standard in paragraphs 55 and 72 by alleging that the Bordbar Transfers and Leya Transfers left the Debtor insolvent and left Debtor unable to pay the claims of its creditors in full, which would show either balance sheet insolvency within the meaning of California Civil Code, § 3439.02(a) and/or cash flow insolvency under California Civil Code, § 3439.02(b).

In a third case, In re AWTR Liquidation, Inc., 548 B.R. 300 (Bankr. C.D. Cal. 2016), this court held that a complaint sufficiently pleaded insolvency for purposes of cash flow insolvency under California Civil Code, § 3439.02 observing that "having `liquidity problems,' being `in need of cash' and similar allegations do not necessarily amount to cash flow insolvency, but stating those allegations are enough to support the express allegations of cash flow insolvency." Id. at 334; see also, 11 U.S.C. § 548(a)(1)(B)(ii)(III). Similarly, the court held that a complaint sufficiently pleaded insolvency for purposes of balance sheet insolvency under California Civil Code, § 3439.02, observing that "`[u]ncertain' asset values and debts that eventually `crushed' [d]ebtor do not necessarily mean that [d]ebtor is balance sheet insolvent. . . . But these allegations are sufficient to support the express allegations of balance sheet insolvency . . . ." Id. (emphasis in original); see also, 11 U.S.C. § 548(a)(1)(B)(ii)(I). Here, Plaintiff's allegations that Debtor's books and records indicate insolvency, which the court infers as an allegation of balance sheet insolvency, like the allegations in AWTR Liquidating, sufficiently state a plausible claim for relief.

Thus, for the foregoing reasons, the court rejects Defendants' argument that Plaintiff fails to allege anything more than the ultimate conclusion that Debtor was insolvent and that the allegation of insolvency is inadequate since it was based only on "information and belief." See Motion, ECF 10 at 4. Plaintiff alleging that Debtor was insolvent as shown by its books and records is not a conclusory allegation to be disregarded because the allegation rests on specific facts that, if true, support the element of insolvency for a claim of constructive fraudulent transfer, and such allegation was not made "on information and belief." Id.

The first amended complaint adequately pleads the element of transfers lacking reasonably equivalent value in paragraphs 23, 43, 52, 53, 54, 96 and 101 by alleging the Bordbar Transfers, the Legal Fees Transfers, the Plea and Settlement Transfers, the BMW Transfer and the Leya Transfers2 were made by Debtor for less than reasonable equivalent value. Id. The courts have generally determined that constructive fraudulent transfer claims are adequately pleaded under Federal Rule of Civil Procedure 8(a)(2) when certain elements, such as the "dates, amounts, source, and transferee of each alleged transfer[,]" are alleged. In re Pennysaver USA Publishing, LLC, 587 B.R. at 456. Here, Plaintiff does allege the value of each transfer and the parties to the transfer, along with other facts supporting each element of the claims.

The Ninth Circuit Bankruptcy Appellate Panel's decision in Perez v. Bui (In re Tenerio), BAP No. CC-17-1102, 2018 WL 989691 (9th Cir. BAP 2018) supports Plaintiff's argument that the element of transfers lacking reasonably equivalent value was adequately pleaded. In In re Tenerio, the court found that the plaintiff's allegation that the debtor received nothing in return for a transfer was sufficient to adequately plead a transfer for less than reasonably equivalent value. Id., slip op. at *8. ("[T]he Debtor received no consideration in the transfer and therefore did not receive `reasonably equivalent value'. ..."). Here, Plaintiff's allegations are, similarly, sufficient to survive a motion to dismiss. See e.g., First Amended Complaint, ECF 9 at ¶¶ 44, 52, 54, 70.

Because the elements of insolvency and transfers lacking reasonably equivalent value are adequately pleaded to support Claims 5 and 6 as plausible claims for relief, the court determines that these claims do not fail to state a claim upon which relief can be granted.

The court will deny the motion to dismiss as to Plaintiff's Claims 3 and 4 for constructive fraudulent transfer based on inability to pay debts under California Civil Code, § 3439.04(a)(2) and Plaintiff's Claims 9 and 10 for avoidance of constructive fraudulent transfers under 11 U.S.C § 548(a)(1)(B) because the claims adequately pleaded the required elements of the inability to pay debts and transfers lacking reasonably equivalent value.

California Civil Code, § 3439.04(a) provides: "A transfer made or obligation incurred by a debtor is voidable as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation as follows: . . . . 2) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor either: (A) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction. (B) Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor's ability to pay as they became due."

11 U.S.C. § 548(a)(1) provides:

Defendants argue that for these claims, Plaintiff must prove at the time of the Disputed Transfers, Debtor knew or should have known that it could not pay its debts, but Plaintiff in its first amended complaint refers to a series of alleged transgressions by Debtor and Bahram (also known as "Barry") Bordbar, "which attempts to conjure a great deal of smoke regarding potential liabilities of Prototype, [and] to make it appear as if it is self-evident that when Prototype was making the Disputed Transfers, it was incurring debts beyond its ability to pay." Motion, ECF 10 at 4-5. Defendants argue that the most important and egregious example is Plaintiff's use of the Crash Victims' claims, which are "contingent, unliquidated and highly speculative." Id. According to Defendants, "[n]otwithstanding that the Trustee seeks to give the impression that Prototype knew that it faced near certain liability in the Blackhawk Crash Action, the Blackhawk Crash Action plaintiffs have nothing more than a contingent, speculative, and unliquidated claim riding on an allegation that has never been proven." Id. at 7.

In response, Plaintiff argues that at the time each relevant transfer was made, Debtor knew that its business was operating illegally, knew that it had falsely certified critical aircraft parts or knew that it had been sued by the Crash Victim Claimants, and as such, Plaintiff in his first amended complaint adequately pleaded that Debtor believed that it would incur substantial debts that it simply could not pay. Trustee's Memorandum Of Points and Authorities in Opposition to Certain Defendants' Motion to Dismiss Complaint, ECF 30 at 11-12. In reply, citing In re Pajaro Dunes Rental Agency, Inc., 174 B.R. 557, 593 (Bankr. N.D. Cal. 1994), Defendants argue that Plaintiff fails to adequately plead that Debtor incurred debts beyond its ability to pay by failing to plead facts that showed that debtor would not reasonably have been seen as able to pay its debts after making the disputed transfers. Defendant's Reply in Support of Motion to Dismiss Complaint and Supplemental Motion to Dismiss, ECF 53 at 8-9. Defendants further argue that the alleged legal violations go more to the question of legal liability of Debtor and its insiders to the government rather than the financial conditions of Debtor. Id. at 9.

The court determines that Plaintiff has sufficiently pleaded Debtor's inability to pay for purposes of Claims 3, 4, 9 and 10 for constructive fraudulent transfer because the court can infer such inability to pay its debts as incurred from the circumstances alleged by Plaintiff, particularly with respect to the Crash Victims' personal injury tort and wrongful death claims estimated at approximately $35 million, though they may be contingent, unliquidated and disputed. Although Defendants make a good point that the Crash Victims' claims have not been determined by a court of competent jurisdiction and are still disputed and unliquidated as this court has acknowledged,3 the case law supports consideration of contingent, unliquidated and disputed claims in determining a debtor's total indebtedness for purposes of determining insolvency or ability to pay debts as incurred. In re Tenorio, 2018 WL 989691, slip op. at *9-10, citing and quoting, Sierra Steel, Inc. v. Totten Tubes, Inc. (In re Sierra Steel, Inc.), 96 B.R. 275, 279 (9th Cir. BAP 1989); In re Imagine Fulfillment Services, LLC, 489 B.R. 136, 146 (Bankr. C.D. Cal. 2013). Moreover, as Plaintiff contends, Debtor's inability to pay debts beyond the Crash Victim Claimants' potential $35 million personal injury tort and wrongful death claims may be adequately pleaded in that the Debtor did not and could not pay any of its debts, including tax debts, wage debts and rent debts as set forth in the first amended complaint at ¶ 50.

While Defendants make another good point that the allegations of legal transgressions by Debtor and Bahram (or Barry) Bordbar seem more germane to a determination of legal liability to governmental authorities rather than determining financial conditions of the Debtor under the reasonable ability to pay debts test described in In re Pajaro Dunes Rental Agency, Inc., 174 B.R. at 593-594, arguably gratuitously throwing dirt on the Defendants, a pattern or practice of engaging in illegal conduct may indicate incurring of debt for which the Debtor lacked the ability to pay because of the exposure to civil and criminal liability of Debtor, which could result in an increased debt load, adversely impacting Debtor's reasonable ability to pay its debts. It may be a logical stretch, perhaps, but the claims are plausibly pleaded. "As long as a plausible claim is pled, the complaint may proceed `even if it strikes a savvy judge that actual proof of those facts is improbable,' and `that a recovery is very remote and unlikely.'" Phillips and Stevenson, Rutter Group Practice Guide: Federal Civil Procedure Before Trial, California & Ninth Circuit Edition, ¶ 8:124.1, citing and quoting, Bell Atlantic Corp. v. Twombly, 550 U.S. at 556. However, as one court has stated, at the pleading stage, the plaintiff is not required to have "specific financial information" to allege that the debtor's financial condition was compromised. In re Covenant Partners, L.P., 532 B.R. 84, 93 (Bankr. E.D. Pa. 2015) ("While no specific financial information is alleged on this point, the Court can reasonably infer that the Debtor's financial health was either tenuous at the time of, or irreparably harmed by, the transfers. . . .").

The first amended complaint adequately pleads the element of transfers lacking reasonably equivalent value in paragraphs 23, 52, 54, 86 and 91 for Claims 3 and 4. Because the elements of inability to pay debts through insolvency and transfers lacking reasonably equivalent value are adequately pleaded to support Claims 3 and 4 as plausible claims for relief, the court determines that these claims do not fail to state a claim upon which relief can be granted. The first amended complaint adequately pleads the element of transfers lacking reasonably equivalent value in paragraphs 23, 52, 54, 114 and 120 for Claims 9 and 10. Because the elements of inability to pay debts through insolvency and transfers lacking reasonably equivalent value are adequately pleaded to support Claims 3, 4, 9 and 10 as plausible claims for relief, the court determines that these claims do not fail to state a claim upon which relief can be granted.

As the court has previously observed, the "complaint should be read as a whole, not parsed piece by piece to determine whether each allegation, in isolation, is plausible." Phillips and Stevenson, Rutter Group Practice Guide: Federal Civil Procedure Before Trial, California & Ninth Circuit Edition, ¶ 8:125, ¶ 8:127b, citing and quoting, Hernandez-Cuevas v. Taylor, 723 F.3d at 103. "The relevant question . . . in assessing plausibility is not whether the complaint makes any particular factual allegations but, rather, whether `the complaint warrant[s] dismissal because it failed in toto to render plaintiffs' entitlement to relief plausible.'" Id., ¶ 127c, quoting, Rodriguez-Reyes v. Molina-Rodriguez, 711 F.3d at 55, quoting, Bell Atlantic Corp. v. Twombly, 550 U.S. at 569 n. 14. Mindful of these observations, the court has considered the allegations of Plaintiff's first amended complaint to evaluate Defendants' motion to dismiss.

The court observes that most of the claims in the first amended complaint will survive Defendants' motion to dismiss. Defendants' motion to dismiss did not challenge certain of Plaintiff's other claims under the California Uniform Voidable Transactions Act4 ("CUVTA") (formerly the California Uniform Fraudulent Transfer Act or CUFTA) and the analogous federal law provisions in 11 U.S.C. § 548 at the pleading stage, and the arguably more strongly pleaded constructive fraudulent transfer claims based on balance sheet insolvency under the CUVTA will survive, as discussed above. Although the constructive fraudulent transfer claims under the CUVTA based on Debtor's inability to pay debts are challenged by the motion to dismiss and arguably more tenuous, the court believes that such claims should survive as adequately pleaded, as discussed above. As a matter of practicality, such claims are simply an alternative theory of relief, under the CUVTA and analogous federal law, to claims that will proceed. Looking at the first amended complaint as a whole, it adequately pleads claims for fraudulent transfer under the CUVTA and analogous federal law. In Potter v. Alliance United Insurance Co., 37 Cal.App.5th 894, 295 (2019), the California Court of Appeal reversed the trial court's judgment of demurrer to the complaint for actual and constructive fraudulent transfer on grounds that the plaintiff failed to allege insolvency under the CUVTA, holding that the operative complaint had pleaded all three methods of proving a violation of the CUVTA, only one of which requires insolvency, i.e., California Civil Code, § 3439.05. Thus, even if the defendant was correct in alleging that insolvency had not been pleaded, that would have affected one method of proving liability for voidable or fraudulent transfer, and not all of them. In this matter, Plaintiff's fraudulent transfer claims will have to be litigated past the pleading stage, including both actual and constructive fraudulent transfer claims, as well as other claims pleaded in the first amended complaint.

For the foregoing reasons, the court orders as follows:

IT IS SO ORDERED.