Justia Corporate Compliance Opinion Summaries

Defendants appealed from a district court's order confirming an arbitration award where plaintiffs, six business entities, claimed to have been defrauded by defendants. At issue was whether the arbitration panel had exceeded its jurisdiction by rendering an award against defendants because they had never consented to arbitration. The court reversed the district court's order because under ordinary principles of contract and agency law, defendants, as the CEO and CFO of the defendant corporations, were not personally bound by the arbitration agreements their corporations entered into. Therefore, the court held that the arbitration panel lacked jurisdiction to render an award against defendants. View "DK Joint Venture 1, et al. v. Weyand, et al." on Justia Law

This case arose when the SEC brought suit against Stanford Group Company (SGC), along with various other Stanford entities, including Stanford International Bank (SIB), for allegedly perpetrating a massive Ponzi scheme. In this interlocutory appeal, defendants appealed the preliminary injunction that the receiver subsequently obtained against numerous former financial advisors and employees of SGC, freezing the accounts of those individuals pending the outcome of trial. The court held that the district court had the power to decide the motion for preliminary injunction before deciding the motion to compel arbitration; the district court did not abuse its discretion in granting a preliminary injunction; the preliminary injunction was not overbroad; and the district court acted within its power to grant a Texas Uniform Fraudulent Transfer Act (TUFTA), Tex. Bus. & Com. Code Ann. 24.005(a)(1), injunction rather than an attachment; and that the court did not have jurisdiction to rule on the motion to compel arbitration. Accordingly, the court affirmed and remanded the motion to compel arbitration for a ruling in the first instance. View "Janvey v. Alguire, et al." on Justia Law

Texas Wyoming Drilling, Inc. (TWD) filed a voluntary petition for bankruptcy under Chapter 11 and filed its disclosure statement and plan, which eliminated all of TWD's shareholders' stock interests in TWD. Central to this dispute were the terms of the plan and statement; namely, whether the terms preserved TWD's claims against Laguna Madre Oil & Gas II, LLC et al. A few months after confirmation of the plan, TWD sued 32 of its former shareholders, including appellants here, for pre-petition dividend payments that were allegedly fraudulent transfers under 11 U.S.C. 544, 548, and 550, and the Texas Business and Commerce Code, alleging that the former shareholders had received dividends and other transfers equaling millions of dollars while TWD was insolvent (Avoidance Actions). Laguna subsequently appealed the bankruptcy court's denial of its motion for summary judgment. The court held that the bankruptcy court properly denied Laguna's motion for summary judgment because the plan adequately preserved the Avoidance Actions and the claims were not barred by judicial estoppel or res judicata. Accordingly, the court affirmed the judgment. View "Spicer v. Laguna Madre Oil & Gas II LLC, et al." on Justia Law

This case stemmed from the transportation excise tax that National Airlines (National) owed the government. Plaintiff appealed the district court's summary judgment determination that, pursuant to 26 U.S.C. 6672, he was personally liable for the excise taxes that National collected from its passengers but failed to pay over to the United States during his tenure as National's CEO. The court affirmed the judgment of the district court and held that the district court properly found that plaintiff was a "responsible person" and that his failure to pay taxes was willful as defined by this circuit's precedents. View "Conway v. United States" on Justia Law