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A Kelowna man — and his parents — found out the hard way that you can’t just transfer property to hide assets from creditors.

Local businessman David Tarasenko knew in early 2009 that he owed creditors in Ontario roughly $500,000. According to a B.C. Supreme Court Justice, he tried to protect his roughly $625,000 Dilworth Mountain area home by transferring it to his parents shortly before or roughly around the time an arbitration hearing with an Ontario company ordered him to pay nearly $300,000 for unknown reasons.

That didn’t stop his creditors, however. Justice Dennis Hori was asked to sort through the transaction and void the transfer, a case made more complicated because the home was sold again — to a friend of Tarasenko’s.

While that friend — and his parents — were all named in the suit, Hori said, in a decision published Dec. 24, 2019, it fell on Tarasenko’s shoulders.

"I find that the transfer of the property in 2009 from David... to (his parents) was made with the intent to delay, hinder, or defraud creditors,” he ruled. "There does not seem to be any reason for the transfer other than to put the property out of the reach of creditors.”

Hori determined that although his parents were involved in the fraud and knew their son was in debt, they didn’t have an active role and the transaction was "entirely orchestrated by David and that his parents willingly complied.”

In 2014, his parents sold the home again, this time to one of David’s friends and business associates who agreed to sell the home, with any profits going back to David’s parents. The home was sold in 2016 but by then, the creditors were circling and had the roughly $50,000 profit held in trust.

Hori ruled creditors were entitled to that profit. Again, though the friend was caught up in the scheme, Hori found no fault upon him and had no evidence he was involved in any deception. While Hori voided the initial transaction, he agreed the latest sale should proceed.

Those creditors will have more issues recovering their losses, however, because Tarasenko is now in bankruptcy proceedings. He was having trouble paying his mortgage back in 2009 and hasn’t recovered.

While his parents weren’t found at fault, they will however have to pay court costs to the creditors. The court heard they also took on additional debts against themselves and a family business throughout the ordeal.

You can find the decision here. 

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