Scheef & Stone is pleased to announce a significant courtroom victory in a complex fraudulent transfer case involving the improper transfer of ownership interests in a Texas long-term care hospital.
After acquiring controlling ownership of the hospital, the purchaser failed to pay a $4.2M Promissory Note issued to the seller. Instead of honoring its commitments to the seller, the individual owners of the purchasing company orchestrated a series of undisclosed transfers through a maze of companies, shifting ownership of the hospital to entities under their control before eventually selling to an unaffiliated transferee. These transfers rendered the purchaser insolvent and were made without receiving reasonably equivalent value in exchange for the hospital ownership interest.
Recognizing the gravity of the situation, Scheef & Stone attorneys took action. Led by Brent Kugler (lead trial counsel), with Shirley Rose (trial co-counsel), LaDawn Nandrasy (jury charge), and Abbye West (associate), the legal team presented a compelling case showing the multiple fraudulent transfers of the hospital ownership interests through various transferee companies.
Following a six-day trial, the jury found that the defendants who ultimately acquired the hospital did so in violation of the Texas Uniform Fraudulent Transfer Act, and that those defendants gained $5.2 million in value from the fraudulent scheme. The jury additionally found that $850,000 in value was transferred to other defendants who directly benefited from the scheme.
This verdict reinforces the fundamental principle that businesses must operate with transparency and integrity and that creditors have the ability to pursue claims against those who attempt to avoid financial obligations through fraudulent means.
At Scheef & Stone, we are committed to protecting our clients from fraudulent business practices and ensuring justice prevails in complex financial disputes.
For more information about our business litigation practice, please contact us.
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