Kane Russell Coleman & Logan PC Successfully Defends Compass Bank in Fraudulent Transfer Suit

Kane Russell Coleman & Logan PC (KRCL) successfully defended Compass Bank in a fraudulent transfer suit in federal court in Houston, Texas.    

On March 11, 2011, Randy Williams, Chapter 11 Trustee ("Trustee") for Green Valley Growers, Inc. ("GVG"), filed suit against Compass Bank seeking the disgorgement of approximately $4.5 million paid to a bank later acquired by Compass Bank in connection with a series of commercial loans to a closely-held, family-owned wholesale nursery business. The Trustee also sued numerous other parties in connection with other transactions involving GVG.

Compass Bank was represented by directors, Michael A. Logan and Brian W. Clark, and associate Sanjay Minocha, from the Dallas office of KRCL.

The Trustee asserted numerous claims against Compass Bank under the Texas Uniform Fraudulent Transfer Act ("TUFTA") and the United States Bankruptcy Code. Compass Bank successfully defeated most of Plaintiffs' claims with a motion for summary judgment but the Court found that fact issues existed regarding the Trustee's claim that GVG operated with the "actual intent to hinder, delay or defraud creditors" under TUFTA 24.005(a)(1).

After years of litigation, all defendants except Compass Bank reached settlements with the Trustee. The Trustee's claims against Compass Bank were set for trial on July 31, 2014.

On July 25, 2014, after an extensive pretrial conference in which the Court granted Compass Bank's motion to exclude the Trustee's expert witness, excluded three other fact witnesses and excluded a significant number of the Trustee's proposed trial exhibits, the Trustee agreed to dismiss his remaining claim against Compass Bank in exchange for a mutual release, with no money being paid.

The settlement was approved by the bankruptcy court without objection and Judge Lee Rosenthal of the United States District Court for the Southern District of Texas issued a final judgment on August 11, 2014, which dismissed the Trustee's claims against Compass Bank with prejudice.

CAUSE/CASE NO: 4:11-cv-02545 
COURT: United States District Court for the Southern District of Texas     
JUDGE: Lee H. Rosenthal

Kane Russell Coleman & Logan PC is a full service law firm with offices in Dallas and Houston. Formed in 1992 with five lawyers, today KRCL has more than 85 attorneys. The Firm provides professional services for clients ranging from Fortune 500 companies to medium-sized public and private companies to entrepreneurs. KRCL handles transactional, litigation and bankruptcy matters in Texas and throughout the country.