715 S.W.3d 747
Tex.2025Background
- Laura Yosowitz prevailed in a jury trial against her ex-husband Martin Lee Kay, obtaining a judgment of approximately $54 million for breach of divorce agreement and fiduciary duties.
- Kay sought to suspend enforcement of the judgment pending appeal by posting security; he claimed a net worth of $754,373, supported by an affidavit and cashier's checks.
- The primary dispute centered on the value of Kay’s shares in his startup, Entera Holdings, Inc., with valuations from $0 (Kay) to over $180 million (Yosowitz’s experts), hinging on credibility and marketability issues.
- The trial court credited Yosowitz’s valuation, found Kay’s net worth was $147 million, and required a $25 million supersedeas bond (the statutory cap).
- Kay offered to tender his Entera shares as alternative security, but the trial court and court of appeals refused, with the latter holding such security was unavailable due to his net worth exceeding $10 million.
- The Supreme Court of Texas considered Kay’s mandamus petition arguing errors in both net worth valuation and the categorical exclusion of alternative security for high net worth debtors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Valuation of Entera shares/net worth | Shares are highly valuable, as supported by experts | Shares are unmarketable, should be $0 | Crediting Yosowitz’s experts; trial court's net worth finding was not an abuse |
| Availability of alternative security for high net-worth debtors | Only debtors < $10M can offer alternative security | Alternative security available to all | Court of appeals erred; alternative security is not categorically limited by net worth |
| Adequacy of Entera stock as alternative security | Stock is not sufficient or appropriate | Stock should suffice as security | Court of appeals must consider if Kay established adequacy of alternative security |
Key Cases Cited
- In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004) (mandamus standard for abuse of discretion)
- City of Keller v. Wilson, 168 S.W.3d 802 (Tex. 2005) (factfinder is sole judge of credibility)
- In re Angelini, 186 S.W.3d 558 (Tex. 2006) (fact disputes not resolved in mandamus)
- In re Garza, 544 S.W.3d 385 (Tex. 2018) (abuse of discretion is departure from guiding principles)
- In re Corral-Lerma, 451 S.W.3d 385 (Tex. 2014) (mandamus relief in supersedeas bond cases)