PORTLAND, Maine — A federal lawsuit alleging Cate Street Capital CEO John Halle transferred property and assets to his wife to avoid paying a roughly $2.4 million personal judgment against him has been scheduled for trial in November as a collections case moves forward through Maine District Court.
U.S. District Court Judge George Z. Singal issued an order Sept. 5 allowing plaintiff Richard Davimos, a former business associate of Halle, to take to trial claims that Halle fraudulently transferred a stake in a holding company and a Falmouth home in order to avoid paying the judgment Davimos won in a New York court.
In a separate order Wednesday, Singal scheduled the case for trial starting Nov. 3 with pre-trial conferences in October.
A phone call and email to Halle’s attorneys were not returned Monday afternoon.
Cate Street manages the Great Northern Paper Co. in Millinocket and Thermogen Industries, which planned to build a high-tech wood pellet plant in East Millinocket. The mill closed in January and has missed deadlines set for restarting. Gov. Paul LePage told millworkers in August that the state is working to find a partner or investor to restart the mill.
Attorneys seeking to collect in the personal lawsuit against Halle see Cate Street as one possible source for satisfying the debt, but company officials have said the case is a personal matter unrelated to its business.
A court order issued in July permitted Davimos’ attorneys to question Halle’s wife, but it barred inquiry about Cate Street’s holding company, Jenis Investment Co., because it is part of the federal fraudulent transfer case.
While disclosures in recent lawsuits tie Jenis Investment to ownership of Thermogen and other entities, the assets of privately held Jenis Holding Co. are not clear. In a December deposition, Halle implied that his wife was owner of the Jenis companies for the purposes of estate planning.
The order last week from Singal will allow the claim that Halle fraudulently transferred his stake in that entity to go to trial. That entity and another in question in the federal case, JH North Hampton Group, share an address with the Portsmouth, New Hampshire-based Cate Street, located at 1 Cate St.
Brian Champion, Halle’s attorney who in May told the Bangor Daily News he could not comment on the lawsuit, in June filed a motion arguing that Halle never had an interest in Jenis Holding and therefore could not transfer it to his wife.
Davimos’ attorneys argue that a 2006 corporate registration form identifying Halle as a member prove he had some ownership of the company, though Halle’s attorneys argue those documents do not indicate ownership.
Davimos is pursuing the case in U.S. District Court alongside the collections case in Maine District Court. The complexity of that case led Maine District Court Judge Barbara Raimondi to set out a schedule for gathering evidence in that collections case, setting a timeline that would result in the first pretrial conference no sooner than March 2015, unless either party requests that conference happen sooner.
Raimondi on Friday also granted Davimos’ attorneys the ability to submit any evidence they gather in Maine into any related lawsuits in New York as long as those documents are filed under seal in that state as well.
Davimos’ New York-based attorney was not available for comment on proceedings in that state on Monday afternoon.
The judgment against Halle stems from separate business dealings related to financing of the 2001 film “ My First Mister.” Davimos had claimed Halle had guaranteed his loan of $1 million to the project and that the loan was not repaid. In 2009, the Supreme Court of the State of New York Appellate Division awarded Davimos $1 million plus interest in the case against Halle.
As of July, the judgment amount had reached about $2.4 million.