business disputes

Brad Jackson recently secured a complete victory in a contentious business dispute heard in Dallas district court after one of our clients was wrongly accused of being a party to an alleged fraudulent transfer of $100,000.

The case was tried over several days last year before Judge Dale Tillery of the 134^th District Court in Dallas. In an interesting twist, one of the most important documents in the case was originally written in Hebrew and had to be translated into English. During the trial, we also relied on a translator since the people who sued our client spoke Vietnamese.

Beauty Salon Bought with Family Loan

The controversy began in 2013, when our client, a local businessman, loaned his nephew $190,000 at 6 percent interest to buy a beauty salon. Under the terms of the agreement, which was written in Hebrew, our client also was first in line to be repaid if the salon was sold before the loan was paid off.

When the nephew eventually sold the salon, he repaid our client the remaining $100,000 that was owed on the loan. Our client then deposited that money in his bank account to repay a separate loan he had taken out to help his nephew buy the salon.

In 2016, our client’s nephew was sued by two business associates in a dispute over money tied to the already sold salon. A year later, the same two business associates sued our client based on claims they were entitled to the $100,000 that he was repaid more than a year earlier, as well as additional money damages.

Defending Fraudulent Transfer Claim

Relying on his years of legal experience and knowledge of the Texas Business and Commerce Code and the Texas Uniform Fraudulent Transfer Act, Brad argued that for a transfer to be fraudulent, it must be made “without receiving a reasonably equivalent value and the debtor (in this case, our client’s nephew) was insolvent at that time or the debtor became insolvent as a result of the transfer or obligation.”

Brad persuaded the Court that our client should not be found in violation of the Fraudulent Transfer Act since extinguishing the obligation to repay the loan was something of value and there was no evidence that the nephew was insolvent when the loan was repaid; that our client believed his nephew was insolvent; or that repaying the loan made the nephew insolvent.

Court Rules in Our Client’s Favor

Earlier this week, we received a final judgment and permanent injunction where the Court dismissed all the claims against our client. We are thankful for the well-reasoned ruling.

This case is a perfect example of how a person or company can become involved in a business dispute through no fault of their own. Our client thought he was simply helping his nephew by loaning him $100,000 only to find out a year later that he was being sued himself for significantly more than the original loan amount. Thankfully, we’ve seen these types of strongarm tactics before and we knew the law was on our client’s side.