Reverse, Render, and Remand in part; Affirm in part; Opinion Filed June 17, 2014.

S

In The

Court of Appeals

Fifth District of Texas at Dallas

No. 05-13-00666-CV

ALTUS BRANDS II, LLC, Appellant

V.

MICHAEL ALEXANDER, RANDY MOSELEY, AND SWORDFISH FINANCIAL, INC., 

Appellees

On Appeal from the 382nd Judicial District Court

Rockwall County, Texas

Trial Court Cause No. 1-11-654

OPINION

Before Justices Lang, Myers, and Brown 

Opinion by Justice Lang

Appellant Altus Brands II, LLC (“Altus”) filed an application for writ of garnishment in 

the trial court against appellees Michael Alexander and Randy Moseley to collect a foreign 

judgment filed in Texas (the “judgment”) that awarded Altus $289,886.88 against appellee 

Swordfish Financial, Inc. (“Swordfish”).

1

 Altus contended Alexander and Moseley are liable for 

the full amount of its judgment previously rendered in Minnesota against Swordfish because they 

(1) are indebted to Swordfish in an amount in excess of $3,900,000; (2) fraudulently transferred 

assets of Swordfish to themselves in excess of the judgment; and (3) have “manipulated the 

 1 Originally, Altus filed separate applications for writ of garnishment against Alexander and Moseley. Subsequently, those separate actions 

were consolidated with a pending action by Altus against Swordfish. 
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assets and liabilities of [Swordfish]” such that “equity and good conscience” require that “the 

corporate veil of [Swordfish] be pierced.” 

Following a bench trial, the trial court rendered judgment that Altus (1) “be granted the 

right under Section 24.008(b) of the Texas Business and Commerce Code to levy execution on 

that specific stock transferred in 2010 by [Swordfish] to [Alexander] and [Moseley],” see TEX.

BUS. & COM. CODE ANN. § 24.008(b) (West 2009),2 and (2) otherwise take nothing on its causes 

of action.

In three issues on appeal, Altus contends the trial court erred by (1) “declining to enter a 

money judgment against Defendants as provided in Tex. Bus. & Com. Code §24.009(b)”; (2) 

ruling that “SEC filings” in the record did not create an obligation on behalf of Alexander and 

Moseley to pay a $3.5 million promissory note owed to Swordfish and that the transfer of certain 

stock at the time that note was executed was not fraudulent as to Altus; and (3) “holding that 

Defendants’ cancellation, after their depositions in this case, of the $3.5 million note owing to 

[Swordfish] . . . was neither a fraudulent transfer nor a proper basis to pierce the corporate veil of 

[Swordfish].” We decide in favor of Altus on its first issue. Altus’s second and third issues are 

decided against it. We reverse the trial court’s judgment in part, render judgment granting Altus 

a money judgment pursuant to Texas Business and Commerce Code section 24.009(b), and 

remand this case to the trial court for further proceedings consistent with this opinion. The trial 

court’s judgment is otherwise affirmed. 

 2 Pertinent to this appeal, the trial court’s judgment stated, in part

After hearing the evidence and arguments presented by counsel, and review of the briefs provided, the Court is of the 

opinion that Plaintiff should take nothing by this suit on its causes of action based on garnishment, and/or piercing the 

corporate veil. The Court is further of the opinion that Plaintiff should take nothing from the Defendants in this suit on its 

cause of action based on fraudulent transfer to the extent that such cause of action requests a money judgment against any 

defendant. However, the Court is further of the opinion that based on Plaintiff’s fraudulent transfer claim brought under 

Section 24.006 of the Texas Business and Commerce Code, that Plaintiff should be granted the right under Section 

24.008(b) of the Texas Business and Commerce Code to levy execution on that specific stock transferred in 2010 by 

[Swordfish] to Defendants Michael Alexander and Randy Moseley, which stock was described and identified by the 

evidence as being $1,255,520 in stock to Defendant Michael Alexander, and $327,520 in stock to Randy Moseley. 
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I. FACTUAL AND PROCEDURAL BACKGROUND

Altus filed its application for writ of garnishment in this case on June 15, 2011. Therein, 

Altus asserted in part (1) Swordfish is a Minnesota corporation and (2) Alexander and Moseley 

are Texas residents and, respectively, the chief executive officer and chief financial officer of 

Swordfish. Altus requested (1) a writ of garnishment against Alexander and Moseley (the 

“garnishee defendants”) and (2) judgment in favor of Altus against Alexander and Moseley for 

the amount due on the “judgment already rendered” against Swordfish, “together with interest 

and costs of the suit in the original case and in this garnishment proceeding.” Attachments to 

Altus’s application for writ of garnishment consisted of (1) a copy of a Minnesota judgment 

dated October 21, 2010, awarding Altus $289,886.88 against Swordfish and (2) an affidavit in 

which an attorney for Altus testified in part she has “reason to believe” Alexander and Moseley

have property belonging to Swordfish or are indebted to Swordfish based on “review of the 

information contained in [Swordfish’s] Notes to Condensed Consolidated Financial Statements 

(Unaudited) dated March 31, 2011 (the “CCFS”), attached hereto.” The CCFS describes a 2009

transaction (the “reverse merger transaction”) between Swordfish and an entity identified as 

“Swordfish Financial, Inc., a Texas corporation” (hereafter “Swordfish Texas” or “the Texas 

corporation”). Specifically, the CCFS states in part

NOTE 1–NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT 

ACCOUNTING POLICIES

NOTE RECEIVABLE–RELATED PARTY

On August 14, 2009, [Swordfish] closed a Stock Purchase/Merger Agreement

with [Swordfish Texas] (which is controlled by [Swordfish’s] Chairman of the 

Board, President, Chief Executive Officer and majority shareholder) pursuant to 

which [Swordfish] sold an aggregate of 10,987,417 shares of its common stock in 

exchange for a $3,500,000 promissory note, payable in two installments of

$1,750,000 each with the first installment being forty-five (45) days from the date 

of the note and the second installment being one-hundred twenty (120) days from 

the date of the note. [Swordfish] expects for the note and accrued interest to be 

paid by the shareholders of the Texas corporation. The note bears interest at the 
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rate of 5% per annum the note and the related accrued interest at March 31, 2011

was $284,375. [Swordfish] expects to collect the balance of the note and accrued 

interest from the stockholders of the Texas corporation. 

. . . .

NOTE 9–RELATED PARTY TRANSACTIONS

Current Officer and Director Promissory Note to Company

On August 14, 2009, [Swordfish] closed a Stock Purchase/Merger Agreement 

with [Swordfish Texas] pursuant to which [Swordfish] sold an aggregate of 

10,987,417 shares of its common stock in exchange for a $3,500,000 promissory 

note, payable in two installments of $1,750,000 each with the first installment 

being forty-five (45) days from the date of the note and the second installment 

being one-hundred twenty (120) days from the date of the note. The note bears 

interest at the rate of 5% per annum. As the date of this filing, no payments have 

been made on the promissory note and accrued interest. [Swordfish] expects to be 

paid in full by shareholders of the Texas corporation.

(emphasis original). Additionally, the CCFS states in part

[Swordfish] is authorized to issue 25,000,000 shares of common stock with a par 

value of $.16 per share. . . . 

In March, 2010 [Swordfish] issued its Chief Executive Officer and Chief

Financial Officer, each, 268,000 shares of restricted common stock as stock based

compensation.

In July, 2010 [Swordfish] issued its Chief Executive Officer and Chief Financial

Officer, each, 279,000 shares of restricted common stock as stock based

compensation.

In October 2010, [Swordfish] issued its Chief Executive Officer 7,300,000 shares

of restricted common stock as stock based compensation.

In October 2010, [Swordfish] issued its Chief Financial Officer 1,500,000 shares

of restricted common stock as stock based compensation.

During the fourth quarter of 2010, the Company sold 1,092,000 shares of its

common stock in private placements for $151,500.

Alexander and Moseley filed separate sworn answers asserting they are “not indebted in 

any amount to” or “in possession of any effects belonging to” Swordfish.

On October 5, 2012, Altus filed an “Affidavit Traversing and Controverting Defendants’

Answers to Garnishments.” In that affidavit, Brian Breneman, a “member” of Altus, testified in 
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part (1) defendants’ filings with the United States Securities and Exchange Commission (“SEC”) 

“represented that the shareholders of [Swordfish Texas] are Garnishee Defendants Alexander 

and Moseley”; (2) after execution of the $3.5 million promissory note described above (the 

“note”), Swordfish Texas was merged into Swordfish and the shares of Swordfish purchased by 

Swordfish Texas were distributed to the shareholders of Swordfish Texas; (3) defendants’ SEC 

filings “represented that the $3.5 million note was going to be paid by ‘the shareholders of the 

Texas corporation,’ i.e., the shareholders of Swordfish Texas”; (4) “it is clear from the 

referenced SEC filings that Garnishee Defendants are indebted to [Swordfish] in the amount of 

$3.5 million plus interest”; (5) if Alexander and Moseley have no liability for repayment of the 

$3.5 million note described above, then “their receipt of stock in and distributions from 

[Swordfish] . . . was without any consideration to [Swordfish] and Plaintiff is entitled to all 

remedies under applicable law as a creditor of the entity which fraudulently transferred such 

property to Garnishee Defendants”; (6) in direct response to matters adduced at depositions of 

defendants held on September 21, 2012, “Garnishee Defendants executed and caused to be filed 

with the SEC documents purporting to, among other things, cancel the $3.5 million obligation of 

Swordfish Texas and Garnishee Defendants to [Swordfish] in exchange for the return to 

[Swordfish] of stock owned by Garnishee Defendants Alexander and Moseley with a market 

value of less than $110,000 at the time of the exchange”; (7) because such transaction “was 

engaged in by Garnishee Defendants as a ruse to avoid their personal liability to [Swordfish] and

Plaintiff herein” and “together with other relevant facts, demonstrates that Garnishee Defendants 

have and continue to treat [Swordfish] as a mere alter ego and instrumentality of Garnishee 

Defendants individually,” the trial court “should pierce the corporate veil of [Swordfish] and rule 

that the individual assets of Garnishee Defendants are immediately available for satisfaction of 

Plaintiff’s judgment against [Swordfish]”; and (8) alternatively, the trial court should “rule that 
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the transaction cancelling the $3.5 million obligation of Swordfish Texas and Garnishee 

Defendants to [Swordfish] is an avoidable fraudulent transfer and declare it avoided, null, and 

void, and/or grant such other and further relief to Plaintiff as is available under applicable 

fraudulent transfer law.”

Further, Altus filed a “Trial Brief” prior to trial. Therein, Altus further articulated its 

claims and contended in part (1) in addition to the fraudulent transfers alleged above, Swordfish 

“distributed at least $1.9 million in cash and stock to Garnishee Defendants through the end of 

2011” without receiving reasonably equivalent value; (2) “these transfers are avoidable as 

fraudulent to the creditors of [Swordfish]”; and (3) because “[a] return of the stock transferred to 

[garnishee defendants], which has substantially devalued since the transfer, would not effect an 

equitable result,” the trial court should award Altus money damages against garnishee defendants

pursuant to Texas Business and Commerce Code section 24.009 “to the extent necessary to pay 

Plaintiff’s judgment.” 

Trial commenced October 15, 2012. The exhibits introduced into evidence included a 

“Form 10-K” annual report filed by Swordfish with the SEC for “the fiscal year ended December 

31, 2010” that contained a “Notes” section identical to the CCFS described above and stated in 

part that “other compensation” to executive officers during 2010 included (1) $1,255,520 to 

Alexander, which “represents 7,847,000 shares of restricted common stock issued to Mr. 

Alexander and valued at par value of $.16 per share” and (2) $327,520 to Moseley, which 

“represents 2,047,000 shares of restricted common stock issued to Mr. Moseley and valued at par

value of $.16 per share.” Additionally, the trial exhibits included (1) a copy of the $3.5 million 

note showing Swordfish Texas as the sole “maker”; (2) “Form 10-Q” reports filed by Swordfish 

with the SEC in 2010 and 2011 that stated in part that on December 31, 2009, 25,000,000 shares 

of common stock of Swordfish were authorized and 13,400,000 were “issued and outstanding”; 
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on March 31, 2010, 25,000,000 shares of common stock of Swordfish were authorized and 

13,936,000 were “issued and outstanding”; and on December 31, 2010, 25,000,000 shares of 

common stock of Swordfish were authorized and 24,386,000 were “issued and outstanding”; (3) 

a “Form 10-Q” report filed by Swordfish with the SEC in August 2012 that stated in part that 

Swordfish “is authorized to issue 1,000,000,000 shares of common stock with a par value of 

$0.0001 per share”; (4) several reports filed by Swordfish with the SEC in 2010–2012 containing 

the statement “[p]ursuant to the terms of the reverse merger, the equity holders of [Swordfish 

Texas] acquired 10,987,417 shares of common stock constituting 80% of voting control of

[Swordfish] in return for a $3,500,000 note bearing interest at the rate of 5% per annum”; and (5) 

various other SEC filings of Swordfish that contained language identical to that in the CCFS. 

Further, a copy of an exhibit attached to Altus’s trial brief that showed a calculation of interest 

on the judgment was “admitted as a summary only.” 

Alexander and Moseley testified at trial that they did not sign any guaranty respecting the 

$3.5 million note or make any representations guaranteeing that debt. Additionally, on crossexamination, Alexander was shown a portion of Swordfish’s 2009 “Form 10-K” report

containing language identical to that in the CCFS described above and testified as follows:

Q. You see that says Current Officer and Director Promissory Note to Company?

A. Yes, sir.

Q. Is that true or false?

A. It’s true.

Further, Moseley testified in part on cross-examination as follows:

Q. Okay. Since [2009], you’ve acquired—well, in 2010, an additional $327,520 in 

stock, right, in 2010?

A. I did not get that money, no.

Q. You got stock in that value, though, right?
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A. Stock that was valued at that, but it never materialized any dollars [sic].

Breneman testified as an expert witness respecting interpretation of Swordfish’s SEC 

filings. Specifically, Breneman stated in part that he believed the “consolidated” balance sheets 

of Swordfish and Swordfish Texas contained in Swordfish’s post-2009 SEC filings showed a 

$3.5 million receivable owed to “the consolidated entities” by “another party” other than

Swordfish or Swordfish Texas.3

 

As described above, the trial court’s judgment from which this appeal is taken stated 

Altus should take nothing on “its causes of action based on garnishment, and/or piercing the 

corporate veil” and “its cause of action based on fraudulent transfer to the extent that such cause 

of action requests a money judgment against any defendant,” but granted Altus “the right under 

Section 24.008(b) of the Texas Business and Commerce Code to levy execution on that specific 

stock transferred in 2010 by [Swordfish] to [Alexander] and [Moseley], which stock was 

described and identified by the evidence as being $1,255,520 in stock to [Alexander] and 

$327,520 in stock to [Moseley].”

Upon request by Altus, the trial court made findings of fact and conclusions of law.4

 

This appeal timely followed.

 3 Additionally, subsequent to trial, Altus filed a “Closing Brief” and a “Closing Brief—Rebuttal Regarding Fraudulent Transfer Claims.” 

The record does not contain any post-trial brief of appellees.

4 The trial court’s findings of fact and conclusions of law stated in part as follows:

Findings of Fact

. . . .

4. Swordfish Texas acquired 80% of the shares of [Swordfish] in return for a $3.5 million promissory note from Swordfish 

Texas.

5. The promissory note from Swordfish Texas to [Swordfish] was not personally guaranteed by anyone, including 

Defendants Alexander and Moseley.

. . . .

7. In the SEC filings listing the note as an asset of [Swordfish], the defendants Alexander and Moseley, in their capacity as 

Chief Executive Officer and President of [Swordfish], stated that “the company expects to be paid in full by shareholders 

of [Swordfish Texas].”

. . . .

11. In addition to seeking to hold the individual stockholders liable under a garnishment of [sic] action, Plaintiff also 

sought to sue the individuals on a theory of piercing the corporate veil, taking the position that the individual shareholders 
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II. ALTUS’S ISSUES

A. Standard of Review

Statutory construction is a legal question we review de novo. City of Rockwall v. 

Hughes, 246 S.W.3d 621, 625 (Tex. 2008). In construing statutes, we ascertain and give effect 

 had caused the debt from Swordfish Texas to [Swordfish] to be cancelled (in exchange for stock) which debt was the only 

significant asset of [Swordfish].

[12]. This claim is based on the same argument made in the garnishment action, that the individual shareholders Alexander 

and Moseley, were personally liable to [Swordfish] for the $3.5 million note, and that by changing it, they personally 

benefitted by being relieved of their alleged personal guaranty. 

13. In 2010, [Swordfish] transferred stock listed at the time with a value of $1,255,520 to Defendant Michael Alexander, 

and transferred stock listed at the time with a value of $327,520 to Defendant Randy Moseley.

14. There was no evidence of any consideration given for the transfers of said stock.

15. [Swordfish] was insolvent at the time of transfer.

16. There was no evidence that prior to the transfer, Plaintiff had tried to levy execution on said [Swordfish] stock to 

satisfy their judgment.

17. However, based on the transfer, Plaintiff also sued the individual defendants for a money judgment claiming a

fraudulent transfer. 

Conclusions of Law

1. Defendants Alexander and Moseley were not guarantors of the $3.5 million note from Swordfish Texas to [Swordfish], 

and were therefore not personally liable to [Swordfish] for the note; [Swordfish] had no legal right to sue the individual 

Defendants on the note.

2. The Defendants were not personally indebted to [Swordfish], and therefore not subject to garnishment by Plaintiff[]. 

3. SEC filings saying that [Swordfish] expects to be paid on the $3.5 million note by the individual defendants as 

shareholders of Swordfish Texas, does not create a guarantee of the note from Swordfish Texas by the individual 

shareholder defendants.

4. A garnishor (Plaintiff in this case) cannot acquire through a garnishment proceeding, any greater rights against garnishee 

defendants Alexander and Moseley, than the debtor, [Swordfish] possesses.

5. The SEC filings do not recite or constitute a promise to pay the note by the individual shareholders.

6. Plaintiff’s cause of action that seeks to hold individual shareholders Alexander and Moseley liable on a theory of 

piercing the corporate veil fails because the $3.5 million note forgiven by the judgment debtor [Swordfish] (in exchange 

for stock), was not personally guaranteed or owed to the judgment debtor by the shareholders Alexander and Moseley.

7. In 2010, a transfer of stock from the judgment debtor [Swordfish] was made to individual defendants Alexander and 

Moseley, without receiving adequate consideration.

8. Said transfer was made at a time when the judgment debtor was insolvent.

9. Under the provisions of Section 24.006 of the Texas Business and Commerce Code, the transfer made by the debtor 

[Swordfish] is considered fraudulent as to the Plaintiff creditor.

10. A money judgment against the individual shareholders who received the stock from [Swordfish] would place Plaintiff 

in a better position than they would have been if Plaintiff had actually levied execution on the stock of the debtor 

[Swordfish], before it was transferred.

11. Based on the facts and circumstances of the transfer, Plaintiff should have the right to be placed in the same position 

they would have been in if no transfer had been made, by being allowed to levy execution on the specific stock transferred 

in 2010, pursuant to Section 24.008(b) of the Texas Business and Commerce Code.
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to the legislature’s intent as expressed by the language of the statute. Id. (citing State v. 

Shumake, 199 S.W.3d 279, 284 (Tex. 2006)). “The plain meaning of the text is the best 

expression of legislative intent unless a different meaning is apparent from the context or the 

plain meaning leads to an absurd result.” Challenger Gaming Solutions, Inc. v. Earp, 402 

S.W.3d 290, 296 (Tex. App.—Dallas 2013, no pet.) (citing Hughes, 246 S.W.3d at 625–26). 

Further, “[w]e determine legislative intent from the entire act and not just isolated portions.” 

20801, Inc. v. Parker, 249 S.W.3d 392, 396 (Tex. 2008). Therefore, when interpreting a 

statutory provision, “we must consider its role in the broader statutory scheme.” Id. 

Findings of fact in a case tried to the court have the same force and effect as jury 

findings and are reviewed by the same standards used to review challenges to the sufficiency of 

the evidence to support jury findings. See, e.g., Anderson v. City of Seven Points, 806 S.W.2d 

791, 794 (Tex. 1991); Sharifi v. Steen Automotive, LLC, 370 S.W.3d 126, 147 (Tex. App.—

Dallas 2012, no pet.); Thornton v. Dobbs, 355 S.W.3d 312, 315 (Tex. App.—Dallas 2011, no 

pet.). When a party challenges the legal sufficiency of the evidence to support an adverse 

finding on which he did not have the burden of proof at trial, the party must demonstrate that 

there is no evidence to support the adverse finding. See, e.g., Thornton, 355 S.W.3d at 316. If 

more than a scintilla of evidence supports the finding, the no-evidence challenge fails. Id. When 

a party challenges the legal sufficiency of the evidence to support an adverse finding on an issue 

on which he had the burden of proof at trial, he must show there is no evidence to support the 

trial judge’s finding and the evidence conclusively establishes the finding urged by the 

challenging party. See, e.g., Dow Chem. Co. v. Francis, 46 S.W.3d 237, 241 (Tex. 2001); 

PopCap Games, Inc. v. MumboJumbo, LLC, 350 S.W.3d 699, 710 (Tex. App.—Dallas 2011, pet. 

denied). “Evidence is conclusive only if reasonable people could not differ in their conclusions, 
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a matter that depends on the facts of each case.” City of Keller v. Wilson, 168 S.W.3d 802, 816

(Tex. 2005). 

In our review, we must credit favorable evidence if reasonable jurors could and disregard 

contrary evidence unless reasonable jurors could not. Id. at 827. The trial court, as fact-finder in 

a bench trial, is the sole judge of the credibility of the witnesses. Id. 

We review a trial court’s conclusions of law de novo. See, e.g., Sharifi, 370 S.W.3d at 

148; Bundren v. Holly Oaks Townhomes Ass’n, Inc., 347 S.W.3d 421, 430 (Tex. App.—Dallas 

2011, pet. denied). “The appellant may not challenge a trial court’s conclusions of law for 

factual insufficiency; however, the reviewing court may review the trial court’s legal conclusions 

drawn from the facts to determine their correctness.” BMC Software Belgium, N.V. v. Marchand, 

83 S.W.3d 789, 794 (Tex. 2002); Wright Grp. Architects–Planners, P.L.L.C. v. Pierce, 343 

S.W.3d 196, 199 (Tex. App.—Dallas 2011, no pet.). We must uphold conclusions of law if any 

legal theory supported by the evidence sustains the judgment. See Bailey v. Gallagher, 348 

S.W.3d 322, 326 (Tex. App.—Dallas 2011, pet. denied); Bundren, 347 S.W.3d at 430. 

B. Applicable Law

Chapter 24 of the Texas Business and Commerce Code is known as the Uniform 

Fraudulent Transfer Act (“UFTA”). See TEX. BUS. & COM. CODE ANN. §§ 24.001–.013 (West 

2009 & Supp. 2013). UFTA is intended to prevent debtors from defrauding creditors by moving 

assets out of reach. See, e.g., Challenger Gaming Solutions, 402 S.W.3d at 293; Arriaga v. 

Cartmill, 407 S.W.3d 927, 931 (Tex. App.—Houston [14th Dist.] 2013, no pet.). “[T]he focus of 

an UFTA claim is to ensure the satisfaction of a creditor’s claim when the elements of a 

fraudulent transfer are proven.” Challenger Gaming Solutions, 402 S.W.3d at 298. 

Consistent with its purpose, UFTA provides a comprehensive statutory scheme through 

which a creditor may seek recourse for a fraudulent transfer of assets or property. See id. at 293; 
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Arriaga, 407 S.W.3d at 932. UFTA delineates what types of transfers and obligations are 

fraudulent, enumerates the remedies available to a creditor, prescribes the measure of liability of 

a transferee, and lists the defenses and protections afforded a transferee. Challenger Gaming 

Solutions, 402 S.W.3d at 294. The judgment creditor has the burden to prove the fraudulent 

transfer by a preponderance of the evidence. See, e.g., Doyle v. Kontemporary Builders, Inc., 

370 S.W.3d 448, 453 (Tex. App.—Dallas 2012, pet. denied).

Section 24.002(12) of UFTA defines “transfer” as meaning “every mode, direct or 

indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an 

asset or an interest in an asset,” including “payment of money, release, lease, and creation of a 

lien or other encumbrance.” TEX. BUS. & COM. CODE ANN. § 24.002(12). Section 24.006(a)

states “[a] transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose 

claim arose before the transfer was made or the obligation was incurred if the debtor made the 

transfer or incurred the obligation without receiving a reasonably equivalent value in exchange 

for the transfer or obligation and the debtor was insolvent at that time or the debtor became 

insolvent as a result of the transfer or obligation.” Id. § 24.006(a). “Value” is given for a 

transfer or obligation if, in exchange for the transfer or obligation, property is transferred or an 

antecedent debt is secured or satisfied. Id. § 24.004(a). “Reasonably equivalent value” includes 

a transfer or obligation that is within the range of values for which the transferor would have sold 

the asset in an arm’s length transaction. Id. § 24.004(d). 

Section 24.008, titled “Remedies of Creditors,” provides as follows: 

(a) In an action for relief against a transfer or obligation under this chapter, a 

creditor, subject to the limitations in Section 24.009 of this code, may obtain:

(1) avoidance of the transfer or obligation to the extent necessary to satisfy 

the creditor’s claim;

(2) an attachment or other provisional remedy against the asset transferred 

or other property of the transferee . . . ; or
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(3) subject to applicable principles of equity and in accordance with 

applicable rules of civil procedure:

(A) an injunction against further disposition by the debtor or a 

transferee, or both, of the asset transferred or of other property;

(B) appointment of a receiver to take charge of the asset 

transferred or other property of the transferee; or

(C) any other relief the circumstances may require.

(b) If a creditor has obtained a judgment on a claim against the debtor, the 

creditor, if the court so orders, may levy execution on the asset transferred or its 

proceeds.

Id. § 24.008.

Section 24.009 of the business and commerce code is titled “Defenses, Liability, and 

Protection of Transferee.” Id. § 24.009. Subsection (b) of section 24.009 states in part that 

“[e]xcept as otherwise provided in this section, to the extent a transfer is voidable in an action by 

a creditor under Section 24.008(a)(1) of this code, the creditor may recover judgment for the 

value of the asset transferred, as adjusted under Subsection (c) of this section, or the amount 

necessary to satisfy the creditor’s claim, whichever is less.”5

 Id. § 24.009(b). The judgment may 

be rendered against the first transferee, the person for whose benefit the transfer was made, or 

any subsequent transferee other than a good faith transferee who takes for value or from any 

subsequent transferee. Id. Subsection (c) of section 24.009 states in part “if the judgment under 

Subsection (b) of this section is based upon the value of the asset transferred, the judgment must 

be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment 

as the equities may require.” Id. § 24.009(c)(1). 

A “guaranty” is “an undertaking by one person to be answerable for the payment of some 

debt or the performance of some contract or duty by another person, who himself remains

 5 The portions of section 24.009 not specifically cited herein are not pertinent to this appeal. 
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liable.” Wells Fargo Bank, N.A. v. Smuck, 407 S.W.3d 830, 835 (Tex. App.—Houston [14th 

Dist.] 2013, pet. denied) (citing Wood v. Canfield Paper Co., 5 S.W.2d 748, 749 (Tex. 1928)). A 

party seeking to establish an action on a guaranty is required to show, among other elements, the 

existence of a guaranty contract. See Gold’s Gym Franchising LLC v. Brewer, 400 S.W.3d 156, 

160 (Tex. App.—Dallas 2013, no pet.). “The essential terms of a guaranty agreement are (1) the 

parties involved, (2) a manifestation of intent to guaranty the obligation, and (3) a description of 

the obligation being guaranteed.” Material P’ships, Inc. v. Ventura, 102 S.W.3d 252, 261 (Tex.

App.—Houston [14th Dist.] 2003, pet. denied); see Park Creek Assocs., Ltd. v. Walker, 754 

S.W.2d 426, 429 (Tex. App.—Dallas 1988, writ denied). 

C. Analysis

1. Altus’s Request for Money Judgment

In its first issue, Altus contends the trial court erred “in declining to enter a money 

judgment against Defendants as provided in Tex. Bus. & Com. Code §24.009(b), and instead 

ruling, pursuant to Tex. Bus. & Com. Code §24.008(b), that the only relief allowed Plaintiff 

would be to execute on the transferred stock, where, as here, the transferred stock declined in 

value from $1,583,040 at the time of the transfer to less than $70,000 at the time of the trail 

court’s ruling.” Specifically, Altus asserts error as to the trial court’s conclusions of law 

numbers ten and eleven, which form the basis for the operative portion of the trial court’s 

judgment in question. In those conclusions of law, the trial court stated as follows:

10. A money judgment against the individual shareholders who received the stock 

from [Swordfish] would place Plaintiff in a better position than they would have 

been if Plaintiff had actually levied execution on the stock of the debtor 

[Swordfish], before it was transferred.

11. Based on the facts and circumstances of the transfer, Plaintiff should have the 

right to be placed in the same position they would have been in if no transfer had 

been made, by being allowed to levy execution on the specific stock transferred in 

2010, pursuant to Section 24.008(b) of the Texas Business and Commerce Code.
–15–

Additionally, the trial court’s findings of fact and conclusions of law pertaining to the 

first issue on appeal state the following: 

Findings of Fact

. . . .

13. In 2010, [Swordfish] transferred stock listed at the time with a value of 

$1,255,520 to Defendant Michael Alexander, and transferred stock listed at the 

time with a value of $327,520 to Defendant Randy Moseley.

14. There was no evidence of any consideration given for the transfers of said 

stock.

15. [Swordfish] was insolvent at the time of transfer.

16. There was no evidence that prior to the transfer, Plaintiff had tried to levy 

execution on said [Swordfish] stock to satisfy their judgment.

17. However, based on the transfer, Plaintiff also sued the individual defendants 

for a money judgment claiming a fraudulent transfer.

Conclusions of Law

. . . .

7. In 2010, a transfer of stock from the judgment debtor [Swordfish] was made to 

individual defendants Alexander and Moseley, without receiving adequate 

consideration.

8. Said transfer was made at a time when the judgment debtor was insolvent.

9. Under the provisions of Section 24.006 of the Texas Business and Commerce 

Code, the transfer made by the debtor [Swordfish] is considered fraudulent as to 

the Plaintiff creditor. 

Altus does not assert error as to those findings of fact or as to conclusions of law numbers seven, 

eight, and nine.

According to Altus, (1) “it is clear that under [UFTA], a plaintiff who establishes the 

existence of an avoidable fraudulent transfer is entitled to a money judgment for the value of 

the asset transferred” (emphasis original) and (2) “[t]he remedy of a money judgment is 

especially called for and required where, as here, the transferred property has substantially 

declined in value.” Further, Altus asserts
–16–

Had the fraudulent transfer in this case not occurred; i.e., had Garnishee 

Defendants caused [Swordfish] to sell the stock they fraudulently transferred to 

themselves and banked the proceeds, [Swordfish] would have had more than 

enough cash on hand to satisfy Appellant’s judgment. Thus, although the trial 

court’s observation in conclusions of law 10 and 11 that a money judgment would 

place Plaintiff in a better position than it would have been absent the transfer, is 

not relevant to the analysis of the proper remedy, it is also clearly incorrect. 

Garnishee Defendants used their power over [Swordfish] to enrich themselves 

with cash and stock, and now that [Swordfish’s] stock is essentially valueless all 

that the trial court has done to make Appellant whole in the wake of a clearly 

fraudulent transfer, held to be so by the trial court, is to authorize Appellant to 

become the title holder of this worthless stock. 

(citations to record omitted). Altus states it “has not found Texas authority directly on this 

point.” 

Appellees do not contest the trial court’s conclusion that the 2010 stock transfers to 

Alexander and Moseley constitute fraudulent transfers pursuant to section 24.006. Further, they 

respond in part that the trial court “correctly ruled that pursuant to Tex. Bus. & Com. Code

§24.008(b), the only relief allowed Appellant would be to execute on the transferred stock.”

According to appellees, 

Appellants [sic] can point to no supporting case law in this jurisdiction

which overcomes the well-known jurisprudence in Texas that a plaintiff is 

precluded from seeking a windfall or placing themselves in a better position 

through money damages versus imposing a levy on the item fraudulently 

transferred.

Thus, despite Appellant’s argument, the analysis of a money judgment 

placing Appellant in a better position than it would have been absent the transfer 

is clearly relevant to the analysis of the proper remedy. Once again, the trial court 

found no evidence that Appellees used their power over [Swordfish] to enrich 

themselves with cash and stock, or that Appellees purposely devalued 

[Swordfish’s] stock. The trial court merely held that the transfers of stock were 

performed without consideration, or equivalent value. Thus, fraudulent transfer, in 

terms of avoiding the transfer as an apparent creditor, does not constitute fraud for 

purposes of holding any punitive damages against the Appellees. Instead, 

fraudulent transfers, for the purpose of levying on the property so transferred, 

look to the value of the property and whether the property itself can be recaptured 

by the creditor.

Appellees cite no case law in support of their argument.
–17–

In its reply brief in this Court, Altus argues in part “[a] money judgment as requested by 

Appellant at trial and in this appeal is a statutory remedy for compensation of the Plaintiff, not 

punishment of the Defendant.” 

As described above, UFTA provides for several remedies to creditors. See TEX. BUS. &

COM. CODE ANN. §§ 24.008, 24.009. However, UFTA does not specify how a remedy is to be 

selected in a particular case. To the extent appellees contend UFTA limits a creditor who has 

obtained a judgment against the debtor to the remedy described in Subsection 24.008(b), i.e. 

execution on the asset transferred or its proceeds, the language of UFTA does not, on its face, 

state such a limitation. See id. § 24.008; see also Hughes, 246 S.W.3d at 625. Further, appellees 

cite no case law supporting such a limitation, and we have found none. 

Rather, we find the analysis in Arriaga persuasive. See Arriaga, 407 S.W.3d at 927. In

that case, Michelle Arriaga sued her former husband, Robert Cartmill, and his two adult sons, 

alleging Cartmill fraudulently transferred tracts of real property to his sons to avoid a money 

judgment Arriaga was granted in their divorce. Id. at 928. After a bench trial, the trial court 

found in Arriaga’s favor on her UFTA claim, but declined to set aside Cartmill’s transfers of the 

property. Id. Instead, the trial court granted Arriaga a money judgment. Id. On appeal, Arriaga 

contended the trial court erred by rendering a money judgment rather than an order to execute on 

the transferred properties under UFTA as she requested. Id. She argued that the relief the trial 

court granted “was actually no relief at all” because she had already obtained a money judgment 

against Cartmill in the divorce and her reason for filing the fraudulent transfer action was that 

she had been unable to collect the judgment for several years. Id. at 931. The Fourteenth Court 

of Appeals in Houston noted that UFTA “is intended to prevent a debtor from defrauding his 

creditors by moving assets out of reach” and “provides a comprehensive statutory scheme 

through which a creditor may seek recourse for a fraudulent transfer.” Id. at 931–32 (citing TEX.
–18–

BUS. & COM. CODE ANN. §§ 24.008, 24.009). Further, the court of appeals observed that 

Cartmill (1) did not challenge the trial court’s judgment of liability under UFTA on appeal and 

(2) “acknowledged he owed [Arriaga] money under the previous judgment but was unwilling or 

unable to pay it.” Id. at 932–33. The court of appeals stated, “On these facts, the trial court’s 

award of a money judgment effectively denies [Arriaga], the prevailing party, the equitable relief 

she sought—a result that is contrary to the purpose of the UFTA.” Id. at 933. The court of 

appeals concluded “the trial court erred by awarding [Arriaga] a judgment for money damages 

when [Arriaga] (1) had previously obtained a money judgment on a claim against [Cartmill] on 

which she had been unable to collect, (2) prevailed on her UFTA claim, and (3) specifically 

requested that she be allowed to levy execution on the properties [Cartmill] transferred to his 

sons as provided under section 24.008(b).” Id. 

In the case before us, the record shows Swordfish “issued” the stock in question to 

Alexander and Moseley in three increments in March, July, and October of 2010. Further, the 

record shows the trial court (1) made findings of fact and conclusions of law not challenged by 

any party that the stock in question was “transferred” by Swordfish to Alexander and Moseley 

“in 2010” and (2) concluded that the money judgment requested by Altus would “place Plaintiff 

in a better position than they would have been if Plaintiff had actually levied execution on the 

stock of the debtor [Swordfish], before it was transferred.” 

Ownership interests in a corporation may be certificated or uncertificated. See TEX. BUS.

ORG. CODE ANN. § 3.201(a) (West 2012). The Texas Business and Commerce Code provides in 

part that a corporation becomes an “issuer” of a security when it “creates” an interest in its 

property which is “represented by a security certificate” or is “an uncertificated security.” TEX.

BUS. & COM. CODE ANN. § 8.201(a). Texas Rule of Civil Procedure 641, titled “Levy on Shares 

of Stock,” states
–19–

A levy upon shares of stock of any corporation or joint stock company for which 

a certificate is outstanding is made by the officer seizing and taking possession of 

such certificate. Provided, however, that nothing herein shall be construed as 

restricting any rights granted under [former] Section 8.317 of the Texas Uniform 

Commercial Code [currently Section 8.112]. 

TEX. R. CIV. P. 641. Section 8.112 of the Texas Uniform Commercial Code, titled “Creditor’s 

Legal Process,” provides in part “[t]he interest of a debtor in a certificated security may be 

reached by a creditor only by actual seizure of the security certificate by the officer making the 

attachment or levy” and “[t]he interest of a debtor in an uncertificated security may be reached 

by a creditor only by legal process on the issuer.” TEX. BUS. & COM. CODE ANN. § 8.112(a)–(b). 

The Texas Business and Commerce Code contains no provision respecting a levy on unissued 

stock, nor have we found such a provision outside of the code. 

There is no evidence in the record showing the stock in question was “issued” by 

Swordfish “before” the 2010 “transfer” described by the trial court. Rather, nothing in the record 

shows there is any distinction between when the stock was “issued” as contrasted with when the 

stock was “transferred.” In fact, it appears from the evidence the terms have been used by the 

parties, by the trial court, and in the evidence interchangeably. Therefore, the record does not 

show Altus had the opportunity, pursuant to the trial court’s conclusions of law numbers ten and 

eleven, to “actually lev[y] execution” on the stock in question “before it was transferred.” See

TEX. R. CIV. P. 641; TEX. BUS. & COM. CODE ANN. § 8.112(a)–(b). On this record, we conclude 

the trial court’s conclusions of law numbers ten and eleven are not correctly drawn from the 

facts. See BMC Software Belgium, N.V., 83 S.W.3d at 794; Wright Grp. Architects–Planners, 

P.L.L.C., 343 S.W.3d at 199. 

As to the availability of a remedy under section 24.009, the trial court concluded the 

transfer in question was fraudulent under UFTA and appellees do not appeal the trial court’s 

judgment. Accordingly, on this record, the transfer in question is “voidable in an action by a 
–20–

creditor under Section 24.008(a)(1)” as required by section 24.009(b). See TEX. BUS. & COM.

CODE ANN. §§ 24.009(b), 24.008(a)(1); see also Tel. Equip. Network, Inc. v. TA/Westchase 

Place, Ltd., 80 S.W.3d 601, 609 (Tex. App.—Houston [1st Dist.] 2002, no pet.) (where creditor

prevails on merits of UFTA claim, transfer is voidable under section 24.008). Additionally, the 

record shows (1) Alexander and Moseley are “first transferee[s]” or “person[s] for whose benefit 

the transfer was made,” see TEX. BUS. & COM. CODE ANN. § 24.009(b); (2) Altus requested a 

money judgment in the trial court and did not request an opportunity to levy execution on the 

stock in question; and (3) the common stock of Swordfish significantly decreased in value 

subsequent to the time of the transfer. On this record, we conclude the trial court erred by (1) 

limiting Altus’s relief to “the right under Section 24.008(b) of the Texas Business and 

Commerce Code to levy execution on that specific stock transferred in 2010 by [Swordfish] to 

[Alexander] and [Moseley]” and (2) not granting a money judgment against Alexander and 

Moseley as provided in Texas Business & Commerce Code §24.009(b). See Arriaga, 407 

S.W.3d at 933; Challenger Gaming Solutions, 402 S.W.3d at 298 (“the focus of an UFTA claim 

is to ensure the satisfaction of a creditor’s claim when the elements of a fraudulent transfer are 

proven”); see also TEX. BUS. & COM. CODE ANN. § 24.009.

We reverse the portion of the trial court’s judgment granting Altus “the right under 

Section 24.008(b) of the Texas Business and Commerce Code to levy execution on that specific 

stock transferred in 2010 by [Swordfish] to [Alexander] and [Moseley].” Further, we render 

judgment in favor of Altus against Alexander and Moseley in the amount of (1) the Minnesota 

judgment described above plus accrued interest on that judgment6 or (2) the value of the asset 

 6 In its application for writ of garnishment, Altus requested in part “costs of the suit in the original case and in this garnishment 

proceeding.” However, the record does not show Altus was awarded “costs of the suit in the original case.” Therefore, we conclude such costs 

do not constitute part of “the amount necessary to satisfy the creditor’s claim.” See TEX. BUS. & COM. CODE ANN. § 24.009(b); Citizens Nat’l 

Bank of Tex. v. NXS Constr., Inc., 387 S.W.3d 74, 91–92 (Tex. App.—Houston [14th Dist.] 2012, no pet.). 
–21–

transferred at the time of the transfer in question,

7 whichever is less, plus costs of court in the 

trial court below and post-judgment interest. Additionally, we remand this case to the trial court

to calculate the amount of accrued interest on the Minnesota judgment and determine the amount 

of the judgment to be awarded in this case in accordance with section 24.009(b)–(c) by 

comparing the value of the asset transferred at the time of the transfer and the amount of the

Minnesota judgment plus accrued interest, so that whichever is less will be the amount of the 

judgment in this case, plus costs of court in the trial court below and post-judgment interest as 

provided by law. 

We decide in favor of Altus on its first issue.

2. Liability Based on $3.5 Million Note and Reverse Merger Transaction

In its second issue, Altus contends the trial court erred by ruling (1) the SEC filings 

described above did not create an obligation on behalf of Alexander and Moseley to pay the $3.5 

million note to Swordfish and (2) if no such obligation was created, the transfer of that stock was 

not fraudulent as to Altus. Altus argues in part

The trial court wholly ignored the ubiquitous language in the SEC filings

signed by Garnishee Defendants characterizing the $3.9 million obligation as an 

“Officer and Director Promissory Note to Company” and Mr. Breneman’s 

testimony that the listing of the asset on the consolidated financial statements had 

to mean that the Note was owed by someone other than Swordfish Texas, and 

instead merely focused on the “expects to be paid” language and holding that it 

was insufficient to create personal liability of Garnishee Defendants. See Finding 

of Fact nos. 5, 7; Conclusions of Law 1–6. 

The characterization of the $3.5 million note as “Officer and Director 

Promissory Note to Company,” affirmed as true by Defendant Alexander at trial, 

and the statements of expectation of payments from Garnishee Defendants, can 

mean only that they owe the amounts the SEC filing characterized as their 

obligations, and that they and [Swordfish] expected to be paid by Garnishee 

Defendants. Mr. Breneman’s expert testimony regarding the consolidated 

financial statements further supports this conclusion.

 7 Altus argued in the trial court that the equities in this case “require no adjustment” under Subsection 24.009(c). See TEX. BUS. & COM. 

CODE ANN. § 24.009(c). The parties do not specifically address in their appellate briefs any “adjustment” pursuant to that subsection. 
–22–

(additional citations to record omitted). According to Altus, the trial court’s ruling is “incorrect 

and inconsistent with any reasonable construction of the evidence at trial.” Additionally, Altus 

contends “other courts have consistently found parol documents to effect what in essence 

become guarantees of debts” and “SEC filings are commonly cited by these courts for this 

purpose.” In support of those contentions, Altus cites two federal cases from New York, UBS 

AG, Stamford Branch v. HealthSouth Corp., 645 F.Supp.2d 135 (S.D.N.Y. 2008), and West 

Tsusho, Ltd. v. Prescott Bush & Co., No. 92 CIV. 3378, 1994 WL 710798 (S.D.N.Y. Dec. 20, 

1994). 

Appellees respond that “[t]he trial court correctly adduced that the language of the SEC 

filings did not create a personal guaranty on the obligations of the note for [Alexander and 

Moseley].” According to appellees, “there is no obligatory ‘shall be paid’ language conforming 

to a guaranty of payment.” 

The trial court stated in part in its findings of fact

5. The promissory note from Swordfish Texas to [Swordfish] was not personally 

guaranteed by anyone, including Defendants Alexander and Moseley.

. . . .

7. In the SEC filings listing the note as an asset of [Swordfish], the defendants 

Alexander and Moseley, in their capacity as Chief Executive Officer and 

President of [Swordfish], stated that “the company expects to be paid in full by 

shareholders of [Swordfish Texas].”

Additionally, in the conclusions of law challenged by Altus, the trial court stated

1. Defendants Alexander and Moseley were not guarantors of the $3.5 million 

note from Swordfish Texas to [Swordfish], and were therefore not personally 

liable to [Swordfish] for the note; [Swordfish] had no legal right to sue the 

individual Defendants on the note.

2. The Defendants were not personally indebted to [Swordfish], and therefore not 

subject to garnishment by Plaintiff[]. 

3. SEC filings saying that [Swordfish] expects to be paid on the $3.5 million note 

by the individual defendants as shareholders of Swordfish Texas, does not create 

a guarantee of the note from Swordfish Texas by the individual shareholder 

defendants.
–23–

4. A garnishor (Plaintiff in this case) cannot acquire through a garnishment 

proceeding, any greater rights against garnishee defendants Alexander and 

Moseley, than the debtor, [Swordfish] possesses.

5. The SEC filings do not recite or constitute a promise to pay the note by the 

individual shareholders.

6. Plaintiff’s cause of action that seeks to hold individual shareholders Alexander 

and Moseley liable on a theory of piercing the corporate veil fails because the 

$3.5 million note forgiven by the judgment debtor [Swordfish] (in exchange for 

stock), was not personally guaranteed or owed to the judgment debtor by the 

shareholders Alexander and Moseley.

Because Altus had the burden of proof in the trial court to show the existence of a 

guaranty agreement, see Gold’s Gym Franchising LLC, 400 S.W.3d at 160, it is required to show

on appeal (1) there is no evidence to support the trial judge’s finding that “[t]he promissory note 

from Swordfish Texas to [Swordfish] was not personally guaranteed by anyone, including 

Defendants Alexander and Moseley” and (2) the evidence conclusively establishes an obligation 

of Alexander and Moseley to pay the note. See, e.g., Dow Chem. Co., 46 S.W.3d at 241; 

PopCap Games, Inc., 350 S.W.3d at 710. Unlike the case before us, the federal cases cited by 

Altus each involved the issue of whether representations in SEC filings were admissible to 

resolve an ambiguity in an existing guaranty agreement. See UBS AG, Stamford Branch, 645 

F.Supp.2d at 137; W. Tsusho, Ltd., 1994 WL 710798 at *1. Therefore, those cases are 

inapposite. 

The record in this case shows Alexander and Moseley testified at trial that they did not 

sign any guaranty respecting the $3.5 million note or make any representations guaranteeing that 

debt. Further, the evidence cited by Altus is, at most, equivocal as to any intent to guaranty the 

$3.5 million note. See Material P’Ships, Inc., 102 S.W.3d at 261 (“manifestation of intent to 

guaranty the obligation” is essential element of guaranty). We cannot agree with Altus that such 

evidence “can mean only” that Alexander and Moseley owe the amounts due on the $3.5 million 
–24–

note. On this record, we conclude Altus has not met its burden to demonstrate that there is no 

evidence to support the trial judge’s finding of fact number five and that the evidence 

conclusively establishes Alexander and Moseley were obligated to pay the $3.5 million note. 

See Dow Chem. Co., 46 S.W.3d at 241; PopCap Games, Inc., 350 S.W.3d at 710.

Additionally, as described above, Altus asserts that if the SEC filings in question did not 

create an obligation on behalf of Alexander and Moseley to pay the $3.5 million note to 

Swordfish, the 2009 transfer of stock that occurred in connection with the making of that note 

was fraudulent as to Altus. In support of that argument, Altus asserts that Swordfish’s SEC 

filings include the statement, “the equity holders of [Swordfish Texas] acquired 10,987,417 

shares of common stock constituting 80% of voting control of [Swordfish] in return for a 

$3,500,000 note bearing interest at the rate of 5% per annum.” (emphasis original to Altus’s 

brief in this Court). 

In its finding of fact number four, the trial court stated, “Swordfish Texas acquired 80% 

of the shares of [Swordfish] in return for a $3.5 million promissory note from Swordfish Texas.” 

The record shows those shares were subsequently transferred by Swordfish Texas to 

shareholders of Swordfish Texas. To the extent Altus’s argument on appeal can be construed to 

challenge finding of fact number four, Altus cites no evidence in the record, and we have found 

none, that Swordfish Texas (1) did not receive the shares in question before it transferred them to 

its shareholders or (2) did not execute a $3.5 million promissory note in exchange for those 

shares. On this record, we cannot agree with Altus that the 2009 transfer of stock in question 

was fraudulent as to Altus. See TEX. BUS. & COM. CODE ANN. § 24.006(a); see also Doyle, 370 

S.W.3d at 453 (judgment creditor has burden to prove fraudulent transfer). 

We decide against Altus on its second issue. 

3. “Cancellation” of $3.5 Million Note as Basis for Liability
–25–

 In its third issue, Altus asserts the trial court erred by concluding that the “cancellation”

of the $3.5 million note owing to Swordfish “in exchange for stock worth less than $110,000” 

after Alexander’s and Moseley’s depositions in this case was neither “a fraudulent transfer” nor 

“a proper basis to pierce the corporate veil of [Swordfish].” According to Altus, “it is clear that 

by cancelling the $3.9 million note, essentially the only asset of [Swordfish], in exchange for 

giving back the initial 10,987,417 shares of stock worth only $110,000, Garnishee Defendants 

(1) caused [Swordfish] to fraudulently transfer $3.8 million in value to Garnishee Defendants; 

and (2) blatantly manipulated the corporate entity for solely and only their own benefit; to wit, to 

manufacture an argument that the debt Plaintiff claimed Garnishee Defendants owed Swordfish 

Minnesota no longer existed, thus giving rise to the duty of the trial court to pierce the corporate 

veil of [Swordfish] as a mere instrumentality and alter ego of Garnishee Defendants 

individually.” (emphasis original). 

First, we address Altus’s assertion that the “cancellation” of the $3.5 million note in 

exchange for stock was a fraudulent transfer. Altus contends this theory of recovery was 

“advanced” by it in its post-trial “Closing Brief—Rebuttal Regarding Fraudulent Transfer 

Claims,” but was “never even addressed by the trial court.” Specifically, Altus argues

The trial court rejected the piercing the corporate veil theory of recovery based 

upon its erroneous conclusion that Garnishee Defendants never owed the $3.9 

million to [Swordfish]. See Finding of Fact 11 and 12 and conclusion of Law 

no. 6. However, even if the trial court were correct, and Garnishee 

Defendants did not owe the $3.9 million to [Swordfish], it is evident that the 

transfer to themselves of a release, or merely effecting such a release, by an 

insolvent entity, of a $3.9 million liability for the reason that they feared they 

owed it, or indeed, for no reason at all, in exchange for transferring stock 

they owned to [Swordfish] with a market value at the time of the transfer of 

$110,000, was without reasonably equivalent consideration and wholly and 

utterly fraudulent, giving rise to a separate and independent basis for the 

trial court to impose personal liability on Garnishee Defendants. . . . 

Garnishee Defendants’ actions have obliterated this $3.9 million asset, thereby 

completely impoverishing [Swordfish].

(emphasis original) (citations to record omitted). 
–26–

The record shows Altus stated in the introduction to its “Closing Brief—Rebuttal 

Regarding Fraudulent Transfer Claims” that its fraudulent transfer claims “fall into three general 

and wholly independent categories”: (1) “the initial transfer to Garnishee Defendants of 

10,987,417 shares in August 2009”; (2) “the transfers to Garnishee Defendants of $278,050 in 

cash and $1,635,040 in stock (approximately $1.9 million total) as ‘compensation’ they paid 

themselves while in control of [Swordfish]”; and (3) “Garnishee Defendants’ post-deposition 

purported cancellation, mere days before the trial in this case, of the $3.9 million obligation they 

owed to [Swordfish] in exchange for the transfer by them of stock to [Swordfish] worth, at the 

time of their transfer to [Swordfish], only $110,000.” Further, in the argument section of that 

closing brief pertaining to the third category, Altus stated 

In sum, Garnishee Defendants effected the purported elimination of a $3.9 million 

asset of [Swordfish], solely and only so that Garnishee Defendants could come 

before this Court a few days later in the trial following and claim that the 

obligation Plaintiff claimed they personally owed had been cancelled. In 

exchange for the benefit so conveyed on Garnishee Defendants, [Swordfish] 

received stock from Garnishee Defendants worth at the time of the transfer to 

[Swordfish] less than $110,000.

The record does not show Altus asserted in the trial court the portion of its argument on 

appeal described above in which it contends “even if the trial court were correct, and 

Garnishee Defendants did not owe the $3.9 million to [Swordfish], it is evident that . . . 

merely effecting such a release, by an insolvent entity . . . for no reason at all, in exchange 

for transferring stock . . . with a market value at the time of the transfer of $110,000, was 

without reasonably equivalent consideration and wholly and utterly fraudulent.” (emphasis 

original). Therefore, this particular complaint has not been preserved for this Court’s review. 

See TEX. R. APP. P. 33.1(a). Rather, the record shows the fraudulent transfer claim asserted by 

Altus in the trial court respecting the “cancellation” in question was based on Altus’s contentions 

that Alexander and Moseley were personally liable to Swordfish on the $3.5 million note. We 
–27–

concluded above that those contentions were properly rejected by the trial court. Accordingly,

we conclude the trial court did not err when it denied relief on Altus’s claim that was based on 

those contentions. 

Second, we consider Altus’s assertion that the trial court erred by concluding that the 

“cancellation” of the $3.5 million note was not “a proper basis to pierce the corporate veil of 

[Swordfish].” According to Altus,

[Garnishee Defendants] have simply wiped $3.9 million in principal and 

interest off the books of [Swordfish]—the only significant asset of the company—

which they have for years represented to the public was owned by [Swordfish] 

and was owed by and would be paid by themselves—in a desperate effort to 

protect themselves from garnishment liability in this proceeding. A clearer case of 

corporate manipulation, without any corporate purpose whatsoever, for the sole 

and only benefit of its controlling stockholders, is difficult to imagine. The trial 

court’s failure to pierce the corporate veil of [Swordfish] and order that the 

individual assets of Garnishee Defendants are immediately available for 

repayment of the judgment in favor of Plaintiff and against [Swordfish], based 

only upon the trial court’s erroneous conclusion that Garnishee Defendants did 

not ever owe the money to [Swordfish], was error requiring reversal.

The trial court’s findings of fact complained of by Altus state as follows:

11. In addition to seeking to hold the individual stockholders liable under a 

garnishment of [sic] action, Plaintiff also sought to sue the individuals on a theory 

of piercing the corporate veil, taking the position that the individual shareholders 

had caused the debt from Swordfish Texas to [Swordfish] to be cancelled (in 

exchange for stock) which debt was the only significant asset of [Swordfish].

[12]. This claim is based on the same argument made in the garnishment action, 

that the individual shareholders Alexander and Moseley, were personally liable to 

[Swordfish] for the $3.5 million note, and that by changing it, they personally 

benefitted by being relieved of their alleged personal guaranty. 

Further, in its conclusion of law number six, the trial court stated, “Plaintiff’s cause of action that 

seeks to hold individual shareholders Alexander and Moseley liable on a theory of piercing the 

corporate veil fails because the $3.5 million note forgiven by the judgment debtor [Swordfish] 

(in exchange for stock), was not personally guaranteed or owed to the judgment debtor by the 

shareholders Alexander and Moseley.”
–28–

As described above, the record shows Altus’s argument in the trial court respecting its 

claim pertaining to “piercing the corporate veil” was based on Altus’s theory that the garnishee 

defendants benefitted from the “cancellation” of the note because they were obligated on that 

note. On this record, we conclude the trial court did not err in rendering findings of fact numbers 

eleven and twelve and conclusion of law number six complained of above. 

Additionally, in the section of its appellate brief pertaining to “piercing the corporate 

veil,” Altus asserts that “further evidence of the manipulation of the corporate entity by 

Garnishee Defendants that was adduced at trial was the testimony of Garnishee Defendant 

Alexander that he paid for the defense of these garnishment proceedings by giving treasury stock 

to Defendants’ attorney.” To the extent Altus contends such evidence provides an independent 

basis for the relief it seeks, Altus cites no authority to support the position that such actions 

constitute a proper basis to “pierce the corporate veil” of Swordfish. See TEX. R. APP. P. 38.1(i) 

(appellant’s brief must contain appropriate citations to authorities); cf. TEX. BUS. ORGS. CODE 

ANN. § 21.223 (West 2012) (limiting shareholder liability for obligations of corporation).

We decide Altus’s third issue against it.

III. CONCLUSION

We decide in favor of Altus on its first issue. Altus’s second and third issues are decided 

against it. 

We reverse the portion of the trial court’s judgment granting Altus “the right under 

Section 24.008(b) of the Texas Business and Commerce Code to levy execution on that specific 

stock transferred in 2010 by [Swordfish] to [Alexander] and [Moseley].” Further, we render 

judgment in favor of Altus against Alexander and Moseley in the amount of (1) the Minnesota 

judgment described above plus accrued interest on that judgment or (2) the value of the asset 

transferred at the time of the transfer in question, whichever is less, plus costs of court in the trial 
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court below and post-judgment interest. Additionally, we remand this case to the trial court to 

calculate the amount of accrued interest on the Minnesota judgment and determine the amount of 

the judgment to be awarded in this case in accordance with section 24.009(b)–(c) by comparing 

the value of the asset transferred at the time of the transfer and the amount of the Minnesota 

judgment plus accrued interest, so that whichever is less will be the amount of the judgment in 

this case, plus costs of court in the trial court below and post-judgment interest as provided by 

law. The trial court’s judgment is otherwise affirmed. 

130666F.P05

/ Douglas S. Lang/

DOUGLAS S. LANG

JUSTICE
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Court of Appeals

S

Fifth District of Texas at Dallas

JUDGMENT

ALTUS BRANDS II, LLC, Appellant

No. 05-13-00666-CV V.

MICHAEL ALEXANDER, RANDY 

MOSELEY, AND SWORDFISH 

FINANCIAL, INC., Appellees

On Appeal from the 382nd Judicial District 

Court, Rockwall County, Texas

Trial Court Cause No. 1-11-654.

Opinion delivered by Justice Lang, Justices 

Myers and Brown participating.

In accordance with this Court’s opinion of this date, we REVERSE the portion of the 

trial court’s judgment granting appellant Altus Brands II, LLC “the right under Section 24.008(b) 

of the Texas Business and Commerce Code to levy execution on that specific stock transferred in 

2010 by Swordfish Financial, Inc., to Defendants Michael Alexander and Randy Moseley”; 

RENDER judgment in favor of Altus Brands II, LLC against Michael Alexander and Randy 

Moseley in the amount of (1) the Minnesota judgment described in the opinion plus accrued 

interest on that judgment or (2) the value of the asset transferred at the time of the transfer in 

question, whichever is less, plus costs of court in the trial court below and post-judgment 

interest; and REMAND this case to the trial court to calculate the amount of accrued interest on 

the Minnesota judgment and determine the amount of the judgment to be awarded in this case in 

accordance with Texas Business and Commerce Code section 24.009(b)–(c) by comparing the 

value of the asset transferred at the time of the transfer and the amount of the Minnesota 

judgment plus accrued interest, so that whichever is less will be the amount of the judgment in 

this case, plus costs of court in the trial court below and post-judgment interest as provided by 

law. The trial court’s judgment is otherwise AFFIRMED. 
–31–

It is ORDERED that appellant Altus Brands II, LLC recover its costs of this appeal from 

appellees Michael Alexander, Randy Moseley, and Swordfish Financial, Inc. 

Judgment entered this 17th day of June, 2014.

/Douglas S. Lang/

DOUGLAS S. LANG

JUSTICE