Order reversed in part; and Opinion Filed January 23, 2015

S

In The

Court of Appeals

Fifth District of Texas at Dallas

No. 05-14-00675-CV

ROSCOE F. "TREY" WHITE, III AND WHITE VENTURES ENERGY LLC, 

Appellants

V.

MICHAEL POTTORFF AND MONICA FABBIO, DERIVATIVELY ON BEHALF OF 

INVESTORS GROUP, LLC F/K/A WE INVESTORS GROUP, LLC, Appellees

On Appeal from the County Court at Law No. 4

Dallas County, Texas

Trial Court Cause No. CC-11-00751-D

MEMORANDUM OPINION ON MOTION TO CORRECT TRIAL 

COURT’S SUPERSEDEAS RULING

Before Chief Justice Wright and Justices Lang-Miers and Stoddart

Opinion by Justice Stoddart

The challenged judgment in this appeal exceeds $30 million and grants declaratory relief. 

Appellant, Roscoe F. “Trey” White, III, seeking to suspend enforcement of the judgment 

pending appeal, filed in the trial court a $100 supersedeas bond and an affidavit of net worth 

claiming his liabilities exceeded his assets by more than $1 million. See TEX. R. APP. P. 24.1(a);

24.2(a)(1),(c). Appellees contested the affidavit, and a two-day evidentiary hearing was held. 

Finding portions of testimony and evidence offered on White’s behalf not credible, the trial court 

determined White’s net worth to be $7,566,651. In reaching this conclusion, the trial court found 

no credible evidence existed to support White’s valuation of his residence and of one of his 
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companies, EvolvHealth, a manufacturer of weight management and energy supplements. The 

trial court also found that a gift White made to his family of thirty percent of his ninety-nine 

percent interest in another company, Tri-Properties, Ltd., constituted a fraudulent transfer. The 

trial court ordered White to post a bond equal to the lesser of (1) one-half his net worth as 

determined by the court or (2) the sum of compensatory damages awarded in the judgment plus 

two years’ post-judgment interest for the estimated duration of the appeal. Asserting the trial 

court abused its discretion, White and White Ventures Energy LLC have filed a motion to correct 

the ruling. They request we vacate the ruling, find as a matter of law that White has a negative 

net worth of $1,018,919, and find the $100 bond White posted to be sufficient to suspend 

enforcement of the judgment pending appeal. Concluding the trial court abused its discretion in 

finding White’s gift of thirty percent of his interest in Tri-Properties constituted a fraudulent 

transfer, we reverse the trial court’s supersedeas ruling, determine White’s net worth to be 

$4,215,115, and decrease the amount of the surety bond to the lesser of (1) $2,107,558, 

representing one-half White’s net worth or (2) the sum of the compensatory damages awarded in 

the judgment, two years’ post-judgment interest for the duration of the appeal, and costs awarded 

in the judgment. See id. 24.2(a),(d) (together allowing, upon review, modification of amount of 

bond not to exceed limits imposed by rule 24.2(a)(1)); see also id. 24.2(a)(1).

I. BACKGROUND

White is a businessman who co-founded and chairs EvolvHealth and Marlin Atlantis, a 

real estate development group with resort communities in Lake Tahoe and North Carolina and 

projects throughout Texas. He is also a majority interest owner of Tri-Properties, an investment 

company. Originally a ninety-nine percent owner of Tri-Properties, White “gifted” ten percent 

of his interest to his minor daughter and twenty percent to other family members shortly after 

being served with this lawsuit. The transfer was documented by an assignment agreement dated 
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March 22, 2011, but effective as of January 1, 2011. According to the agreement, the transfer 

was in consideration for his family’s “assum[ing] and undertak[ing] to perform and discharge 

any and all of the obligations accruing from and after the date hereof that are attributable to the 

Assigned LP Interest.”

Each year, White prepares financial statements for two lenders. Many of these 

statements were admitted into evidence at the hearing on the contest to White’s affidavit, but two 

were central to the trial court’s ruling—White’s December 31, 2013 statement, which was 

prepared two months before judgment was rendered; and White’s March 15, 2014 statement, 

which was prepared two weeks after rendition of judgment and which was attached to White’s 

net worth affidavit. Together, these statements show that, in a period of two months, White’s net 

worth decreased by more than $9 million. Specifically, the statements show as follows:

December 31, 2013 March 15, 2014

Assets

Cash $ 8,448 $ 35,221

Investments

Tri-Properties, Ltd. $ 8,073,104 $ 5,335,477

Homestead BSG, L.P. $ 30,000 $ 30,000

Principal Residence $11,700,000 $ 5,575,000

Personal Effects $ 250,000 $ 250,000

Total $20,061,552 $11,225,698

Liabilities

Line of credit $ 2,847,610 $ 2,834,022

Tri-Properties, Ltd. note payable $ 8,282,702 $ 9,410,595

Total $11,130,312 $12,244,617

Estimated Income Taxes $ 757,362 $ 0

Net Worth $ 8,173,878 $(1,018,919)

As reflected in the statements, the decrease in White’s net worth was due primarily to 

reductions in the values of White’s residence and Tri-Properties. Andrew Gillentine, a real estate 
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appraiser, explained at the hearing that the reduction in the value of White’s residence was 

attributable to (1) White’s conveyance of part of the property to Tri-Properties and (2) market 

conditions. Gillentine testified he appraised White’s residence in 2010 and 2014. At the time of 

the 2010 appraisal, the residence included 9.339 acres of land known as the Fisher property and 

2.455 acres of land known as the Dalgreen Road property. Using a sales-comparison approach

and based on $900,000 per acre, Gillentine appraised the residence at $11,700,000. 

White conveyed the Dalgreen Road property to Tri-Properties in 2011, but did not reflect 

that change in his financial statement until 2014, after judgment was rendered. Gillentine 

testified that he appraised White’s residence—the Fisher property—in March 2014 at $5,575,000 

and the Dalgreen Road property at $1,650,000. These values were based on $800,000 for the 

first acre of each property, $400,000 for the remaining or “excess” acres, $1 million in 

improvements on the Fisher property, and $100,000 in improvements on the Dalgreen Road 

property. Although he again used a sales-comparison approach, Gillentine testified that the sales 

used for the 2014 appraisal were of properties less than one acre because larger estates had not 

sold in some time.

White and his accountant testified that the reduction in value of Tri-Properties was 

attributable to (1) the maturity of a $3 million note payable to an outside company and (2) a 

reduction in the value of EvolvHealth, one of Tri-Properties’ assets.1

 Although EvolvHealth had 

about 10,000 distributors and thirty-five executives and was planning on launching skin care 

products, White testified that it was in a “distressed state,” and its value had decreased from $5 

million as of December 31, 2013 to $0 in March 2014 following a failed sale. 

 1 Neither White nor his accountant testified live at the hearing. Instead, portions of their deposition testimony were offered. Additionally, 

portions of White’s trial testimony were offered. 
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Based on the testimony and evidence admitted at the hearing, the trial court made the 

following relevant findings:

•The 2014 appraisals of White’s residence and the Dalgreen Road property “were not 

based on comparable sales of properties” and did “not comply with the sales-comparison 

approach to support the ‘excess acreage’ theory and reduction of the value of each 

additional acre at 50% of the value of the first acre.” Using $800,000 per acre plus the 

$1,000,000 in improvements, the value of White’s residence is $8,471,200 ($7,461,200 

(9.339 acres X $800,000 per acre) + $1,000,000). Using $800,000 per acre plus the 

$100,000 in improvements, the value of the Dalgreen Road property is $2,064,000 (2.455 

acres X $800,000) + $100,000).

•No credible evidence was offered justifying the $5 million decrease in value of 

EvolvHealth.

•No credible evidence was presented showing White’s net worth was a negative 

$1,018,919 as alleged in the March 15, 2014 financial statement. 

•White’s transfer of thirty percent of his interest in Tri-Properties constituted a fraudulent 

transfer under section 24.005(a)(1) of the Texas Uniform Fraudulent Transfer Act 

(TUFTA) as evidenced by the presence of several “badges” of fraud–(1) gifting three 

weeks after being served with the lawsuit; (2) receiving no reasonably equivalent value in 

exchange for his thirty percent interest; (3) gifting to insiders—his family; and (4) 

retaining control over Tri-Properties by retaining sixty-nine percent ownership interest 

and retaining control over the interest he gave his minor daughter. As a result, the trial 

court considered White a 99% owner of Tri-Properties instead of a 69% owner for the 

purpose of determining his net worth. 

•The December 2013 financial statement, “which was prepared before the Court’s 

judgment and was sent to financial institutions–-with appropriate adjustments–while not 

perfect, is more reliable than the [March 15, 2014] financial statement.”

•Taking into consideration the valuation of White’s residence and the Dalgreen Road 

property, the fraudulent transfer finding, and the changes in notes payable substantiated 

by the evidence, White’s net worth is $7,566,651 as reflected below:

•Assets

Cash $ 35,221

Tri-Properties $11,060,068

Investment Property $ 30,000

Residence $ 8,471,200

Personal Effects $ 250,000

Total: $19,811,268
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•Liabilities

Line of Credit $ 2,834,022

Tri-Properties Note $ 9,410,595

Total: $12,244,617

II. DISCUSSION

In arguing the trial court abused its discretion in determining his net worth to be 

$7,566,651, White and White Ventures assert, among other arguments, that the evidence does 

not support the court’s valuation of the residence and of the Dalgreen Property and does not 

support the court’s determination that the gift to White’s family of thirty percent of White’s 

interest in Tri-Properties was a fraudulent transfer. They maintain White’s testimony and the 

testimony of his witnesses was uncontroverted and established as a matter of law a negative net 

worth.2

1. Applicable Law

Texas Rule of Appellate Procedure 24.1 allows a judgment debtor to supersede the 

judgment by posting “a good and sufficient bond.” See TEX. R. APP. P. 24.1(a)(2). Under 

appellate rule 24.2(a)(1) and Texas Civil and Practice Remedies Code section 52.006, when the 

judgment is for money, the amount of the bond must equal the sum of compensatory damages 

awarded in the judgment, interest for the estimated duration of the appeal, and costs awarded in 

the judgment. See TEX. CIV. PRAC. & REM. CODE ANN. § 52.006(a) (West 2008); TEX. R. APP. P.

24.2(a)(1). The amount, however, must not exceed the lesser of fifty percent of the judgment 

 2 White and White Ventures also assert the court erred by (1) refusing to admit into evidence White’s net worth affidavit, (2) admitting 

testimony of income earned in 1999 and White’s 2007-2012 financial statements; and (3) drawing conclusions about “equity” from the 2007 

financial statement. No harm is shown, however, by these actions. With respect to the exclusion of White’s net worth affidavit, the affidavit was 

based on his March 15, 2014 financial statement which was admitted into evidence, and the affidavit fails to add any new material information to 

the evidence admitted at the hearing. See In re M.M.S., 256 S.W.3d 470, 478 (Tex. App.—Dallas 2008, no pet.). With respect to the admission 

of White’s earlier income and financial statements, no harm is shown because the trial court’s ruling is based on the December 2013 and March 

2014 financial statements. See id.; see also Mancorp, Inc. v. Culpepper, 802 S.W.2d 226, 230 (Tex. 1990) (“Harmfulness [of erroneously 

admitted evidence] is determined by looking at the entire record to see whether the judgment was controlled by the [evidence] that should have 

been excluded.”). 
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debtor’s current net worth or $25,000,000. See TEX. CIV. PRAC. & REM. CODE ANN. § 52.006(b); 

TEX. R. APP. P. 24.2(a)(1). 

A judgment debtor who posts a bond under appellate rule 24 must simultaneously file 

with the trial court clerk a net worth affidavit that provides detailed information concerning the 

debtor’s assets and liabilities from which net worth can be ascertained. See TEX. R. APP. P.

24.2(c)(1). A judgment creditor may contest the net worth affidavit and conduct reasonable 

discovery concerning the judgment debtor’s net worth. See id. 24.2(c)(2). The judgment debtor 

bears the burden of proving net worth at the hearing on the contest. Id. 24.2(c)(3). Net worth is 

the difference between total assets and total liabilities as determined by generally accepted 

accounting principles. G.M. Houser, Inc. v. Rodgers, 204 S.W.3d 836, 840 (Tex. App. 2006, no 

pet.). When, as here, the judgment creditor asserts an asset transfer was fraudulent, the judgment 

creditor bears the burden of proving the fraudulent transfer by a preponderance of the evidence. 

Id. at 842. Subject to an exception not relevant here, a fraudulent transfer is established under 

the TUFTA either by showing the debtor intended to defraud the creditor, as evidenced by “a 

concurrence of many [badges of fraud],” or made the transfer without receiving reasonably 

equivalent value. TEX. BUS. & COM. CODE ANN. § 24.005(a),(b) (West 2009); Challenger 

Gaming Solutions, Inc. v. Earp, 402 S.W.3d 290, 294 (Tex. App.-–Dallas 2013, no pet.); Houser, 

204 S.W.3d at 843. “Badges,” or factors, a trial court may consider in determining whether a 

debtor intended to defraud a creditor include whether (1) the transfer was to an insider; (2) the 

debtor retained possession or control of the transferred property after the transfer; (3) the transfer 

was concealed; (4) the debtor was sued or threatened with suit before the transfer was made; (5) 

the transfer was of substantially all the debtor’s assets; (6) the debtor absconded; (7) the debtor 

removed or concealed assets; (8) the value of the consideration the debtor received was 

reasonably equivalent to the value of the transferred asset; (9) the debtor was insolvent or 
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became insolvent shortly after the transfer was made; (10) the transfer occurred shortly before or 

after a substantial debt was incurred; and (11) the debtor transferred the essential assets of the 

business to a lienor who transferred the assets to an insider of the debtor. See TEX. BUS. & COM.

CODE ANN. § 24.005(b)(1)-(11); Houser, 204 S.W.3d at 842-43 (quoting earlier version of 

TUFTA). 

2. Standard of Review

On the motion of a party, an appellate court may review the sufficiency or excessiveness 

of security. See TEX. R. APP. P. 24.4(a). An appellate court reviews the trial court’s ruling for 

abuse of discretion. G.M. Houser, 204 S.W.3d at 840. The trial court abuses its discretion if the 

evidence is legally or factually insufficient to support its findings. Id. In reviewing a challenge 

to the legal sufficiency of the evidence, the appellate court considers the evidence in the light 

most favorable to the challenged finding and indulges every reasonable inference that would 

support it. Id. at 841. In reviewing a challenge to the factual sufficiency of the evidence, the 

appellate court considers the entire record, examining the evidence both in favor of and against 

the challenged finding. Id. The fact finding will be set aside only if it is so contrary to the 

overwhelming weight of the evidence as to be clearly wrong and unjust. Id. Under both 

sufficiency reviews, the appellate court must bear in mind that the trial court, as fact finder, is the 

sole judge of the credibility of the witnesses and weight to give their testimony. Id.

3. Analysis

The trial court’s finding of White’s net worth accepted as true White’s statement in his 

December 31, 2013 financial statement that his personal effects were worth $250,000 and his 

investment property was worth $30,000. The court also accepted as true White’s March 15,

2014 financial statement to the extent it reported $35,221 in cash and $12,244,617 in liabilities. 

The court, however, rejected White’s March 2014 valuation of his residence based on the lack of 
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comparable sales and determined the value to be $8,471,200 applying a per acre rate. The court 

also rejected White’s valuation of his interest in Tri-Properties as reflected in the March 2014

statement—$5,335,477—and determined it was worth $11,060,068 based on a 99% ownership 

interest, evidence that EvolvHealth’s worth as of December 31, 2013 was $5,000,000, and 

testimony showing that, based on a per acre rate, the Dalgreen Property was worth $2,064,000. 

As the fact finder, the trial court was the sole judge of the witnesses’ credibility and was 

free to accept in part and reject in part the proffered testimony. See Houser, 204 S.W.3d at 841. 

This is exactly what the trial court did with respect to the testimony regarding the valuation of 

White’s residence, the Dalgreen Property, and EvolvHealth. These are findings this Court 

cannot disturb. Id. Accordingly, to the extent White complains of the evidence to support these 

findings, we overrule his complaint. 

As to White’s complaint of error in finding his gift/assignment to his family of thirty 

percent of his interest in Tri-Properties amounted to a fraudulent transfer, we conclude, under 

this Court’s opinion in Houser, that the evidence is legally and factually insufficient to support 

the finding. In Houser, we concluded that although “appellees’ presentation to the trial court 

raised questions [regarding net worth] and caused the trial court to be ‘skeptical’ of them,” 

appellees’ presentation was not sufficient to controvert appellants’ evidence. Houser, 204 

S.W.3d at 846. As the judgment creditor, appellees bore the burden to offer evidence suggesting 

the elements of fraudulent transfer, and they failed to do so. Id. at 842. 

The trial court here identified in its findings four of the eleven badges listed above—(1) 

the gift occurred about three weeks after White was served with the lawsuit; (2) White received 

no reasonably equivalent value in exchange for his thirty percent interest; (3) the transfer was to 

insiders - his family; and (4) White retained control over Tri-Properties by retaining sixty-nine 

percent ownership interest and retaining control over the interest he gave his minor daughter. 
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White does not dispute the transfer was to insiders, but contends no evidence contradicted that 

the transfer of his thirty percent interest in Tri-Properties was in exchange for “reasonably 

equivalent value”—his family’s “assum[ing] and undertak[ing] to perform and discharge any and 

all of the obligations accruing from and after the date hereof that are attributable to the Assigned 

LP Interest.” He also contends the transfer’s effective date of January 1, 2011 preceded the date 

he was served with the suit by over a month. Finally, he contends no evidence showed he 

maintained control of the transferred interest, other than to the extent he exercised control over 

his daughter’s portion because of her minority. White is correct. While appellees may have cast 

doubt on the truthfulness of White’s testimony and evidence, appellees offered no evidence 

disputing the transfer of interest in Tri-Properties was in exchange for reasonably equivalent 

value, the effective date of the transfer preceded the date he was served with the lawsuit, or that 

he maintained control of the transferred interest. Under Houser, they failed to meet their burden, 

and the evidence is insufficient to support the finding that the gift/assignment was a fraudulent 

transfer and White remained a ninety-nine percent owner of Tri-Properties. 

Considering White a sixty-nine percent owner in Tri-Properties, the value of his interest 

is $7,708,532. That amount added to White’s other $8,751,200 in assets totals $16,459,732. 

Subtracting White’s $12,244,617 in liabilities from that amount, his net worth is $4,215,115. 
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III. CONCLUSION

We grant White’s motion to the extent the trial court’s order finding White’s net worth to 

be $7,566,651 is reversed and White is ordered to post a bond or provide a cash deposit or other 

security equal to the lesser of (1) half his net worth of $4,215,115 or (2) the sum of the 

compensatory damages awarded in the judgment, two years’ post-judgment interest for the 

estimated duration of the appeal, and costs awarded in the judgment. See TEX. R. APP. P.

24.2(a)(1).

140675F.P05

/ Craig Stoddart/

CRAIG STODDART

JUSTICE