An asset saving TRO
A Texas collections TRO can be used by lawyers to save assets for collection.
Texas collections TRO: A lender in Georgia had loaned money to a builder in Houston. The lender hired a large national law firm in Houston who obtained a judgment against the home builder. The builder specialized in large luxury homes.
The client had loaned approximately $2 million to the builder to build the home. When the builder originally defaulted on the loan the house was only about 90% complete. The client and their lawyer had elected to file suit rather than foreclose.
Many Texas lawyers are great at obtaining the judgment. Few Texas lawyers know how to actually collect the judgment. We see this problem over and over. Collecting judgments is an unusual skill among lawyers and a big law firm doesn’t normally engage in that area of practice.
In this case the builder (now judgment debtor) was not cooperative. They removed expensive appliances, etc.
General Counsel for the client called us to enforce the judgment since their existing attorney was not making any progress in collecting the judgment. The client did not want to foreclose because of the damage done to the value of the house. So we obtained a TRO to stop the defendant from further wasting the asset. Then we sought the appointment of receiver to manage the asset as it was not yet fully complete and there was a very active home owner’s association we were dealing with as well.
The receiver hired a contractor to finish the property. Then hired a realtor to sell the property. Eventually the receiver closed on the sale of the house. Even after the cost of the receiver and attorney’s fees, the net proceeds of the matter resulted in a near 100% recovery for the client.
It was a complex engagement that required creative solutions, but the outcome was definitely worth the effort.