55 So. 3d 963
La. Ct. App.2011Background
- Forterra Capital, L.L.C. sued ITS and Thibodaux Sr., along with Mamal, IMS, Thibodaux Jr., Capouch, Lyons, and Randolph, asserting a revocatory action and related claims tied to a Settlement Agreement and Consent Judgment.
- Settlement executed June 22, 2007 required continued payments and allotted Forterra an interest in certain contracts via ITS affiliates, including Mamal, but payments were not made.
- Forterra’s July 29, 2008 petition sought annulment of transfers involving Mamal and IMS, alleging transfer of Mudd X machines to IMS harmed Forterra’s collection efforts.
- Consent Judgment (Nov. 15, 2007) purported to bind ITS and affiliates (including Mamal), but Mamal was not a signatory or party to the Judgment.
- Trial court granted summary judgment against Forterra; appellate court affirmed, finding no genuine issue of material fact and that Mamal was not a signatory to the key agreements; the alleged transfer did not increase Mamal’s insolvency in the manner required by La. C.C. art. 2036.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a revocatory action under La. C.C. art. 2036 lies given the record. | Forterra asserts the transfer increased insolvency and was made by a debtor-controlled affiliate. | Defendants contend no genuine issue of material fact that supports annulment; Mamal not a signatory to key documents. | Affirmed summary judgment; no genuine issue on causation and signatory status. |
| Whether Mamal can be bound by the Consent Judgment and thus subject to the settlement framework. | Consent Judgment binds ITS affiliates, including Mamal. | Mamal was not named or signatory to the Judgment; binding effect contested. | No binding effect on Mamal given lack of signatory and role in alleged proceedings. |
| Whether the November 5, 2007 balance sheet changes create a genuine issue of material fact about insolvency. | Transfer increased Mamal’s insolvency; insolvency figures show deterioration. | Insolvency predated the transfer; no genuine issue as to material fact. | No genuine issue; transfer did not create the required increase in insolvency. |
Key Cases Cited
- Gulf Refining Co. of Louisiana v. Glassell, 186 La. 190, 171 So. 846 (1936) (articles 3182/3183 secure money debts, not specific relief against third parties; limits on creditor remedies)
- In re Goldberg, 277 B.R. 251 (Bankr. Md. 5/1/02) (revocatory action can set aside actions that increase debtor’s insolvency without requiring less than reasonably equivalent value)
- Parish Nat. Bank v. Wilks, 923 So.2d 8 (La. App. 1st Cir. 2005) (art. 2036 requires (1) act increasing insolvency and (2) act after rights arose; proper interpretation governs revocatory actions)