Roitburg v. Roitburg

5. Roitburg v. Roitburg

**Citation:** 2026 WL 218203 (N.J. App. Div. Jan. 28, 2026), Docket No. A-2257-23

Relevant Facts

• Brothers Leonid (Leon) and David Roitburg formed Design of Tomorrow, > Inc. (DOT), a company that constructed custom kitchens and > cabinetry.

• DOT operated out of a building owned by National Precision Tool > Company, Inc. (NPTC), which Leon solely owned.

• David's wife, Polina, served as DOT's bookkeeper.

• The brothers executed a buy-sell agreement in 2006 as equal > shareholders in DOT, with a $1 million life insurance policy to > fund share purchases upon death.

• DOT was insolvent for several years; in 2013, it received loans from > David, Polina, NPTC, and family and friends to remain operational.

• Prior to his death in October 2014, David secured a $2.05 million > contract for DOT to restore barracks at West Point Military > Academy.

• DOT had to execute a subordination agreement, subordinating loan > repayment to the surety company to obtain the contract.

• The buy-sell agreement required DOT to repay any loans by the > deceased shareholder within two years of death.

• After David's death, the parties disputed the amount DOT owed to > David's estate for his loans to the company.

Legal Issues

Whether DOT breached the buy-sell agreement by failing to repay David's loans within two years; whether to pierce the corporate veil to hold Leon and NPTC personally liable for the debt; whether Leon fraudulently transferred funds from DOT to NPTC in violation of the Uniform Fraudulent Transfer Act (UFTA); whether David's estate qualified as an "insider" under the UFTA; and whether attorney's fees should be awarded under the UFTA.

Positions of the Parties

**Plaintiff (Polina/David's Estate):** Alleged breach of contract against DOT; unjust enrichment against Leon, DOT, and NPTC; piercing the corporate veil; account stated and fraudulent conveyance under the UFTA; and civil conspiracy and aiding and abetting.

**Defendants (Leon and NPTC):** Countered that the transfers were made in the ordinary course of business; that the estate was an insider at the time of transfers; and that no attorney's fees were authorized.

Decision by the Court

The trial court found DOT liable for breach of the buy-sell agreement and awarded $459,103.14 in damages to the estate. The Appellate Division affirmed the damages award and rejected the defendants' argument that the estate was an insider under the UFTA. The court rejected the plaintiff's cross-appeal for attorney's fees.

Reasons for the Decision

The purpose of N.J.S.A. 25:2-27(b) is to ensure that insolvent debtors pay debts to unrelated creditors before repaying debts to corporate insiders. Since the estate lost control of DOT when Leon purchased David's shares, it was no longer an insider and deserved priority payment. The UFTA does not expressly authorize attorney's fees, and under the American Rule and Rule 4:42-9, attorney's fees are not recoverable unless explicitly authorized by statute or contract.

Estate & Probate

Legislation & Statutory