IN THE UNITES STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re:

GOODMAN NETWORKS, INC.,

Debtor.

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Case No. 22-31641-mvl7

(Chapter 7) 

SCOTT M. SEIDEL, TRUSTEE, et al., 

Plaintiff,

v. 

HUDSON CLEAN ENERGY 

ENTERPRISES, LLC, et al., 

Defendants.

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Adv. No. 23-03090-mvl 

TRUSTEE’S RESPONSE TO DEFENDANTS HUDSON CLEAN ENERGY 

ENTERPRISES, LLC, ALLIANCE TEXAS HOLDINGS, LLC, NEIL A. AUERBACH, 

JUDITH AUERBACH, AUERBACH PARTNERS, L.P., AND AUERBACH 

CHILDREN’S DYNASTY TRUST U/A/D OCTOBER 9, 2012,’S MOTION TO DISMISS

Davor Rukavina, Esq. 

Tex. Bar No. 24030781 

Thomas D. Berghman, Esq. 

Tex. Bar No. 24082683 

Julian P. Vasek, Esq. 

Tex. Bar No. 24070790 

MUNSCH HARDT KOPF & HARR P.C.

500 N. Akard St., Ste. 4000 

Dallas, Texas 75201 

214-855-7500 

drukavina@munsch.com

tberghman@munsch.com

jvasek@munsch.com

COUNSEL FOR SCOTT M. SEIDEL,

CHAPTER 7 TRUSTEE

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TO THE HONORABLE MICHELLE V. LARSON,

UNITED STATES BANKRUPTCY JUDGE:

Scott M. Seidel, chapter 7 trustee (the “Trustee”) for Goodman Networks, Inc. (the 

“Debtor”), files this his Trustee’s Response to Defendants Hudson Clean Energy Enterprises, LLC, 

Alliance Texas Holdings, LLC, Neil A. Auerbach, Judith Auerbach, Auerbach Partners, L.P., And 

Auerbach Children’s Dynasty Trust U/A/D October 9, 2012,’s Motion to Dismiss, in support of 

which the Trustee would respectfully show as follows: 

I. SUMMARY

1. The Movants’ arguments rest on a fundamentally false premise that insults the 

intelligence of the Court, the Trustee, and the Estate’s creditors: that the Movants paid for and 

owned the Bonds that they “sold” to the Debtor. Perhaps it would have been a shrewd business 

decision to buy the Bonds and then resell them for a massive profit. But that is not what happened. 

In less than one day, the money flowed from the Debtor to GIH, Genesis, and Auerbach Partners, 

and the Bonds flowed from GIH and Genesis to the Debtor. No other money or property changed 

hands. The Movants never used any of their own money, never took any investment risk, and 

never did anything at all but sign some paperwork to act as a shill. In exchange for their role in 

concealing the true nature of an extracontractual, insider transaction, the Movants received $5.9 

million of the Debtor’s money, never having purchased the Bonds they allegedly “sold”. 

2. This is a Court of equity empowered to look behind the form of a transaction to the 

substance, including by collapsing what the Movants disingenuously assert are multiple, separate 

transactions. This is also a Court that will not be “fooled” by the form or structure that coconspirators chose to give a transaction to hide its true nature. The law of fraudulent transfer exists 

to unwind fraudulent transfers regardless of how much effort went into masking the fraud. For the 

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Defendants to argue they did anything to “earn” $5.9 million, or that the Debtor received anything 

of value from them in exchange, really is an afront to logic, equity, and common sense. 

3. The Debtor knew it could purchase the Bonds for some $11 million because that 

was the price Goodman was willing to accept the same day the Debtor bought them. But for 

whatever illegitimate reason, Frinzi did not pay that price. Instead, he paid his friends $5.9 million 

more so act as a shill. In other words, the Debtor overpaid by $5.9 million. The Movants misdirect 

the Court to the face value of the Bonds, but that was not their actual value. What the Debtor was 

buying, and what the Movants were funneling, was a security, and that security had a value less 

than the face amount. The Debtor paid over fifty percent (50%) more than that value. It will be 

interesting indeed for the Movants, under penalty of perjury and consistent with Rule 11, to explain 

to the Court what really happened, and what they really did to earn the $5.9 million. 

II. BACKGROUND

4. On November 7, 2023, the Trustee filed his Original Compliant (Dkt. No. 1, the 

“Compliant”), which sets forth claims and causes of action against the following defendants (the 

“Defendants”): Hudson Clean Energy Enterprises, LLC (“Hudson”), Alliance Texas Holdings, 

LLC (“Alliance”), Neil Z. Auerbach (“Neil Auerbach”), Judith Auerbach (“Judith Auerbach”), 

Auerbach Partners, L.P. (“Auerbach Partners”), James Goodman (“Goodman”), James Frinzi 

(“Frinzi”), Goodman Investment Holdings, LLC (“GIH”), Genesis Networks, Inc. (“Genesis”), 

Genesis Networks Global Services, LLC (“GNGS”), Auerbach Children’s Dynasty Trust U/A/D 

October 9, 2012 (the “Children’s Trust”), and Auerbach Family Dynasty Trust U/A/D October 9, 

2012 (the “Family Trust”). 

5. At a high level, the Complaint alleges the Defendants engaged in a conspiracy to 

enrich themselves at the expense of the Debtor and its creditors by engaging in a shill transaction 

to mask insider self-dealing and breach of contract. Specifically, Goodman and Frinzi sought to 

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continue a general pattern of looting the Debtor for their own benefit by cashing out insider bonds 

in breach of contract and in preference to non-insider creditors, and they directly or indirectly 

enlisted Hudson, Alliance, Auerbach Partners, Neil Auerbach, Judith Auerbach, the Family Trust, 

and the Children’s Trust (collectively, the “Movants”) to play various roles aimed at disguising 

the transactions’ true nature.

6. On February 3, 2022, in furtherance of this scheme, the following events transpired,

all within a 24-hour period: 

a) GIH, Genesis, and Alliance entered into a Purchase Agreement1 under 

which Alliance agreed to purchase (i) the GIH Bonds with a face value of 

$30,146,617.00 for the GIH Purchase Price of $10,570,912.00 and (ii) the 

Genesis Bonds with a face value of $1,600,000.00 for the Genesis Purchase 

Price of $561,041.00. Compl. ¶¶ 40-41, 49-51. However, Alliance did not 

have the funds to pay the GIH Purchase Price or the Genesis Purchase Price, 

Compl. ¶ 52, and Alliance did not, in fact, pay these amounts from its own 

funds. See, e.g., Compl. ¶¶ 1, 47, 99. 

b) Alliance and the Debtor entered into another version of the Purchase 

Agreement under which the Debtor agreed to purchase the GIH Bonds and 

the Genesis Bonds (collectively, the “Bonds”) from Alliance for 

$17,032,060.00—i.e., $5,900,107.00 more than under the other version of 

the Purchase Agreement. Compl. ¶ 62. Again, however, Alliance had not 

paid for the Bonds before entering into this version of the agreement, so it 

did not own the bonds and could not sell them. See, e.g., Compl. ¶¶ 1, 47, 

99. Moreover, this version of the agreement was not shared with the parties’ 

attorneys. Compl. ¶ 64. 

c) The Debtor transferred $17,032,060.00 to Hudson as Alliance’s agent. 

Compl. ¶¶ 54-55, ¶ 57. Hudson immediately transferred $10,570,912.00 to 

GIH, $561,041.00 to Genesis, and $5,900,107.00 to Auerbach Partners (the 

“$5.9 Million Transfer”). Compl. ¶¶ 57, 63. 

7. In other words, if one disregards the shills—i.e., Alliance and Hudson—who did 

nothing but push paper (they did not deploy any capital or place any of their own funds at risk), 

then on February 3, 2022, the Debtor transferred $10,570,912.00 to GIH in exchange for the GIH 

 

1 Capitalized terms not defined herein have the meaning attributed to them in the Complaint.

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Bonds, $561,041.00 to Genesis in exchange for the Genesis Bonds, and $5,900,107.00 to Auerbach 

Partners in exchange for absolutely nothing. This, of course, begs the question, why involve 

Alliance, Hudson, and Auerbach Partners at all?

8. The Complaint plainly answers this question. GIH and Genesis were controlled by 

Goodman. Compl. ¶¶ 25 – 28. Goodman also controlled the Debtor. Compl. ¶¶ 21 – 24. This 

meant GIH, Genesis, and the Debtor were insider-affiliates, and Goodman could not cause the 

Debtor to cash out insider-held bonds in preference to non-insider creditors, given that he knew 

the Debtor was deeply insolvent and contractually prohibited from doing so. Compl. ¶¶ 42 – 43. 

He and Frinzi therefore involved the Auerbachs and their various entities—i.e., the Movants—to 

act as shills in exchange for a $5.9 million kickback. 

9. The Movants now ask this Court to dismiss all the Trustee’s claims against them 

(Dkt. No. 10, the “MTD”). They disingenuously attempt to paint this patently fraudulent 

transaction as merely no more than “cannily (and legally) exploit[ing]” an incredibly lucrative 

business opportunity in which they made $5.9 million in a single day without investing or 

otherwise putting at risk even one penny of their own money. But the Court should deny their 

MTD, open the doors to discovery, and let them make that preposterous claim under oath in a 

deposition or in open court. The detailed, 26-page Complaint provides the Movants more than fair 

notice of the Trustee’s claims against them.

III. ARGUMENT & AUTHORITIES

A. MOTION TO DISMISS STANDARDS

10. The Fifth Circuit has aptly summarized the dismissal standard under rule 12(b)(6) 

as follows: 

To survive a motion to dismiss, a complaint must contain sufficient factual matter 

which, when taken as true, states “a claim to relief that is plausible on its face.” Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955, 167 L. Ed. 2d 929 

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(2007); see also Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937, 173 L. Ed. 

2d 868 (2009). “A claim has facial plausibility when the plaintiff pleads factual 

content that allows the court to draw the reasonable inference that the defendant is 

liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S. Ct. 1937. The

facts alleged must “be enough to raise a right to relief above the speculative level,” 

but the complaint may survive a motion to dismiss even if recovery seems “very 

remote and unlikely.” Twombly, 550 U.S. at 555–56, 127 S. Ct. 1955 (quoting 

Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S. Ct. 1683, 40 L. Ed. 2d 90 (1974)). 

Thus, “the complaint must provide more than conclusions, but it ‘need not contain 

detailed factual allegations.’” Turner v. Pleasant, 663 F.3d 770, 775 (5th Cir. 2011) 

(quoting Colony Ins. Co. v. Peachtree Const., Ltd., 647 F.3d 248, 252 (5th Cir. 

2011) ). 

Innova Hosp. San Antonio, L.P. v. Blue Cross and Blue Shield of Ga., Inc., 892 F.3d 719, 726 (5th 

Cir. 2018). 

11. It bears emphasizing that, when considering a motion to dismiss under rule 

12(b)(6), a court must accept all factual allegations as true and draw all reasonable inferences in 

the plaintiff’s favor. Lormand v. US Unwired, Inc., 565 F.3d 228, 232 (5th Cir. 2009). “‘All 

questions of fact and any ambiguities in the current controlling substantive law must be resolved 

in the plaintiff’s favor.’” Vardeman v. City of Houston, 55 F.4th 1045, 1050 (5th Cir. 2022) 

(“quoting Lewis v. Fresne, 252 F.3d 352, 357 (5th Cir. 2001)). Rule 12(b)(6) motions are viewed 

with disfavor and rarely granted. Lormand, 565 at 232. The Court should therefore “adhere to the 

Supreme Court’s admonition that ‘[t]he plausibility standard is not akin to a ‘probability 

requirement’ ....’” See Innova Hosp. San Antonio, 892 F.3d at 729 (quoting Iqbal, 556 U.S. at 

678, 129 S.Ct. 1937 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955)). 

B. BURDENS OF PROOF ON VALUE

12. The question of “value” comes into play twice with respect to the Trustee’s 

Complaint and the Movants’ arguments. First, there is the question of value with respect to a 

constructively fraudulent transfer, where the Trustee bears the burden of proving the Debtor 

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received less than reasonably equivalent value for the transfer. Second, there is the question of 

value with respect to the affirmative defense of a transferee that gave value for the transfer.

13. With respect to reasonably equivalent value, this is the Trustee’s burden of proof. 

See, e.g., In re L&D Interests Inc., 350 B.R. 391, 399 (Bankr. S.D. Tex. 2006). “This provision 

ensures that there is no great disparity between the value of the goods exchanged. But it does so, 

most importantly, from the perspective of the transferor.” In re Hannover Corp., 310 F.3d 796, 

802 (5th Cir. 2002). This is a fact-laden inquiry, but it is clear that a debtor need not receive a 

dollar-for-dollar exchange. See, e.g., In re Calvillo, 263 B.R. 214, 220 (Bankr. W.D. Tex. 2000). 

The primary focus is on the net effect of the transaction on the debtor's estate and funds available 

to the unsecured creditors. See, e.g., Frontier Bank v. Brown (In re N. Merch., Inc.), 371 F.3d 

1056, 1059 (9th Cir. 2004). “The debtor need not receive a dollar-for-dollar benefit, but rather a 

benefit within the range of an arm’s-length transaction.” In re Victory Medical Ctr. Mid-Cities 

LP, 601 B.R. 739, 748 (Bankr. N.D. Tex. 2019).2 Stated differently, courts “look to see if what 

the debtor received was ‘in the range of a reasonable measure of the value of what the debtor 

transferred.’” Id. at 749.

14. On the issue of reasonably equivalent value, the Trustee discusses at length the 

doctrine of “collapsing” below. For now, he will simply point out the obvious. First, the Debtor 

(through Frinzi, whose knowledge is imputed to the Debtor), knew that Goodman was selling his 

Bonds for 35%. The issue of the face amount of the Bonds, at that point in time, is not controlling, 

since Goodman was selling them for 35%. Yet, under the Movants’ analysis, the Debtor paid 53% 

for the Bonds, knowing that it was paying $5.9 million more than they cost. That is well outside 

 2 This is also the statutory definition under TUFTA: “Reasonably equivalent value includes without 

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

in an arm's length transaction.” Tex. Bus. & Comm. Code Ann. § 24.004(d).

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the “range of a reasonable measure,” as the Debtor paid over than fifty percent (50%) more for the 

Bonds than what they cost. Second, pursuant to the Trustee’s well-pled facts, this was not an 

“arm’s length” transaction. Third, and most critically, the Debtor was not paying $5.9 million for 

the Bonds, but rather for the use of the Movants as a shill to hide and conceal the transaction.

15. The question really is a simple one: what value did the Debtor receive for 

transferring $5.9 million to the Movants? It is a question that the Movants do not address and do 

not want to address, because the answer is obvious: nothing. The Debtor could have purchased 

the Bonds and did purchase the Bonds for $11 million. The $5.9 million was for something entirely 

different, whether a “gift” from Frinzi to his friends or whether to employ the Movants as a “shill,” 

but it was not for the Bonds themselves. Thus, and especially when all reasonable inferences are 

drawn in the Trustee’s favor, at this stage the Trustee has adequately and properly pled the 

elements of a constructively fraudulent transfer (and see the discussion below regarding 

collapsing).

16. The second way that “value” is important concerns the section 548(c) affirmative 

defense:

a transferee or obligee of such a transfer or obligation that takes for value and in 

good faith has a lien on or may retain any interest transferred or may enforce any 

obligation incurred, as the case may be, to the extent that such transferee or obligee 

gave value to the debtor in exchange for such transfer or obligation.

11 U.S.C. § 548(c). TUFTA contains a virtually identical affirmative defense. See TEX. BUS. &

COMM. CODE ANN. § 24.009(a).

17. Section 548(c) (and its TUFTA equivalent) is of course an affirmative defense. See 

In re Positive Health Mgt., 769 F.3d 899, 901 (5th Cir. 2014). It is one on which the Movants bear 

the burden of proof. See In re Hannover Corp., 310 F.3d 796, 799 (5th Cir. 2002). The Movants 

have not even filed an answer in order to assert this affirmative defense and, without even filing 

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such an answer, they cannot prove a non-existant affirmative defense as a matter of law on a Rule 

12(b)(6) standard. Dismissal of a complaint under Rule 12(b)(6) based on an affirmative defense 

is appropriate “only if an affirmative defense or other bar to relief appears on the face of the 

complaint.” Garrett v. Commonwealth Mortg. Corp. of America, 938 F.2d 591, 594 (5th Cir. 

1991). 

18. In this respect, the Movants also complain that the Trustee characterizes the $5.9 

Million Transfer as a “transfer,” arguing that the only transfer at issue is the transfer of 

$17,032,060. See Motion at p. 7. Perhaps, but in reducing the transfer to $5.9 million as against 

the Movants, all that the Trustee has done is to honestly and ethically acknowledge that the Debtor 

did receive a little over $11 million in value for the Bonds (subject to the argument that $1.6 million 

of the Bonds remain to be transferred to the Debtor or cancelled). The Trustee should not be 

penalized for this; he could have sued the Movants for the full $17 million and left it to them to 

prove that any return value was given, but he has taken the high road here. 

C. ACTUAL FRAUDULENT TRANSFER

19. Most if not all of the Movants “value” arguments go to the Trustee’s constructive 

fraudulent transfer claims. But the Trustee has also sued the Movants for actual fraudulent transfer. 

In that respect, reasonably equivalent value is only one of the “badges of fraud,” and the Trustee 

has pled various other “badges of fraud.” 

20. As pointed out above, to the extent that the Movants argue that “value” given the 

Debtor also negates the Trustee’s actual fraudulent transfer claims, that is a bar to relief only if the 

affirmative defense “appears on the face of the complaint.” See Garrett, 938 F.3d at 594. 

However, unlike with respect to reasonably equivalent value, in this context the value given is to 

be determined from the transferee’s perspective: value for purposes of the affirmative defense 

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“must be assessed from the perspective of what the transferee gave up rather than what the debtor 

received.” In re Positive Health Mgt., 769 F.3d 899, 901 (5th Cir. 2014).

21. This is important. First, at the time of the transfer, the Movants did not even own 

the Bonds; at that point in time they had no value to give. Second, and more substantively, because 

the question is the value that the Movants gave, they will have to demonstrate the value that the 

Bonds had. They argue that the Debtor received full value for the retirement of the Bonds, but 

they fail to argue—much less demonstrate—that this is the value they gave up. See id. Clearly, 

when viewed from the Movants’ perspective, the Bonds are not taken at face value. See, e.g., In 

re Clements Mfg. Liquidation Co. LLC, 521 B.R. 231, 252 (Bankr. E.D. Mich. 2014) (holding that 

value of transferred accounts receivable is not determined by their face amount but rather by their 

actual value).

22. Thus, what matters is the actual value of the Bonds that the Movants gave up. Here, 

and taking all reasonable inferences in the Trustee’s favor, the only suggestion of that value is 35% 

of the face amount of the Bonds, as that is the price Goodman simultaneously accepted for the 

Bonds. At most, therefore, the affirmative defense appears on the face of the Complaint to the 

extent of some $11 million (and again, the Trustee has not sued the Movants for that), but nowhere 

on the face of the Complaint does any value for the $5.9 million appear. And the Movants surely 

cannot allege that a nanosecond of their time, in a transaction in which they faced no risk and used 

none of their own capital, was worth any value at all. Again, the issue is not the debt underpinning 

the Bonds. The Movants did not purchase that debt in order to hold it, but rather to immediately 

sell it to the Debtors or to retire the Bonds. What they were purchasing and immediately selling 

(under their theory of the case, of course) was a security, and that security had a defined, market 

value (which is outside of the Complaint, but on which the reasonable inference was that the 

security had a value of 35% of face amount).

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23. And, equally as importantly, the Trustee’s well-pled allegations negate any possible 

“good faith” of the Movants, whether under section 548(c) or 550 of the Bankruptcy Code, or 

under TUFTA. The opposite is alleged. Again, any affirmative defense of value does not 

conclusively appear on the face of the Complaint and it will be for the Movants to plead such an 

affirmative defense and then to prove it, together with sworn testimony and upon discovery (which, 

the Trustee is confident, will demonstrate the bad faith of the Movants).

24. Thus, in no event should the Court dismiss the Trustee’s actual fraudulent transfer 

claims under the Movants’ theory that the value the Debtor received for the transfer or retirement 

of the Bonds negates all of the Trustee’s causes of action.

25. The Movants argue the Trustee has failed to satisfy rule 9(b) with respect to his 

intentional fraudulent transfer claims. As an initial matter, while some courts in this Circuit apply

rule 9(b) to such claims, others do not. According to Judge Fish, “the trend in this district is to 

conclude that fraudulent consideration claims are not subject to Rule 9(b)’s pleading 

requirements.” U.S. Bank N.A. v. Verizon Comms., Inc., 3:10-CVC-1842-G, 2012 WL 3100778, 

*11 (N.D. Tex. July 31, 2012) (citing Janvey v. Alguire, No. 3:09–CV–0724–N, 2011 WL 

7047035, at * 10 (N.D. Tex. Sept. 6, 2011) (Godbey, J.); GE Capital Commercial, Inc. v. Wright 

& Wright, Inc., No. 3:09–CV–0572–L, 2009 WL 5173954, at * 10 (N.D. Tex. Dec. 31, 2009) 

(Lindsay, J.)). 

26. Judge Fish held, “there is ‘no principled reason for applying Rule 9’s pleading 

requirements to [the plaintiff’s] fraudulent transfer claims.’” Id. (quoting Janvey, 2011 WL 

7047035 at * 10). “This is because fraud is simply not an aspect of a fraudulent transfer claim.” 

Id. “In a fraud claim, the plaintiff must show that the defendant had both ‘knowledge’ of the fraud 

and an ‘intention to induce reliance.’” Id. “In contrast, in a fraudulent transfer claim, the 

defendant’s intent or conduct is irrelevant.” Id. So, irrespective of whether rule 9(b) applies, the 

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Movants’ argument concerning Auerbach’s knowledge on p. 13 of the MTD makes no sense. “The 

statute focuses on the transferor’s intent, not the transferee’s.” Stettner v. Smith (In re IFS Fin. 

Corp.), 669 F.3d 255, 264 (5th Cir. 2012).

27. Even if rule 9(b) applies, Judge Gargotta found an appropriate middle ground 

regarding how to apply it to fraudulent transfer claims:

Rule 7009(b) distinguishes between pleading the circumstances of the alleged fraud 

and the conditions of the defendant's mind at the time of the alleged fraud. Thus, 

the heightened standard requiring the specifics of the “who, what, when, where, 

and how” of the alleged fraud applies to the circumstances surrounding the fraud, 

not the conditions of the defendant's mind at the time of the alleged fraud. 

Therefore, to the extent that the Trustee needs to plead the how element, the Trustee 

need only plead the logistics of the transfer—for example, how the transfer was 

executed or the means by which the transfer occurred—not how the transfer was 

made with actual intent to hinder, delay, or defraud.

* * *

Rule 9(b) permits “malice, intent, knowledge, and other conditions of a person mind 

[t]o be alleged generally.” Therefore, to properly plead the actual intent to hinder, 

delay, or defraud element of § 548(a)(1)(A), the Trustee must plead such intent with 

factual allegations that show that relief is plausible. See Iqbal, 556 U.S. at 677–78, 

129 S.Ct. 1937 (explaining that conditions of a person's mind under Rule 9(b) be 

plead according to Rule 8 standards.).

in Rodriguez v. Cyr (In re Cyr), 602 B.R. 315, 328-29 (Bankr. W.D. Tex. 2019). 

28. “The Fifth Circuit has recognized that reliance on badges of fraud is permissible 

for establishing fraudulent intent ....” Id. at 329 (citing In re Soza, 542 F.3d 1060,1067 (5th Cir. 

2008). “It is not necessary that all or any one of the badges of fraud be established to support a 

finding of actual fraudulent intent by the debtor; however, more than one badge of fraud must be 

shown to establish actual fraudulent intent.” Id. “Because badges of fraud are used to establish 

actual intent to hinder, delay, or defraud—the condition of the debtor’s mind at the time of the 

transfer—factual allegations regarding badges of fraud need only comply with Rule 8 and [the 

Trustee need only] plead factual allegations that demonstrate relief is plausible. Id. at 330.

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29. Badges of fraud include, among other things, (a) “the lack or inadequacy of 

consideration;” (b) “the family, friendship or close associate relationship between the parties;” and 

(c) “the general chronology of the events and transactions under inquiry.” Soza, 542 F.3d at 1067. 

Other badges of fraud include (d) “the transfer or obligation was concealed;” and (e) “the debtor 

was insolvent ....” TEX. BUS. & COMM. CODE ANN. § 24.005(b)(3), (9). The Trustee has plausibly 

alleged each of these in the Complaint:

a) As discussed above, the Debtor did not receive anything in exchange for the 

$5.9 Million Transfer. Compl. ¶¶ 1 (“Goodman entered into an agreement 

with Auerbach whereby Auerbach, through his entities, would purchase the 

bonds with the Debtor’s funds—not his own funds—and would keep $5.9 

million for himself with no benefit whatsoever to the Debtor”); ¶ 58 

(“difference of $5,900,107.00 (the “$5.9 Million Transfer”) was intended to 

benefit and enrich Auerbach for acting as the intermediary to hide the true 

nature of the transaction”); ¶ 67 (“for no money of their own and for no risk 

of their own, they had the Debtor fund the purchase and then make an 

immediate $5.9 million profit”).

b) The Complaint alleges the parties are long-time friends. Compl. ¶ 33 

(“Auerbach, Goodman, and Frinzi, directly and through their respective 

families, have been friends for a long period of time and, upon information 

and belief, have engaged in business together. Furthermore, upon 

information and belief, Zakharyayev is friends with Auerbach’s son, 

Shalom Auerbach (“Shalom”), and has done business with him. Thus, all of 

the individuals involved in this matter have personal, familial, and/or 

business relationships predating the Debtor”). 

c) The general chronology—i.e., the fact that the Movants made an alleged 

$5.9 million profit in less than 24 hours without investing a penny—raises 

huge red flags. Compl. ¶ 46 (“Goodman and Auerbach (directly or through 

agents) entered into an agreement whereby each would enrich himself at the 

expense of the Debtor: the Debtor would fund a purchase of the GIH Bonds 

and Genesis Bonds for 35 cents on the dollar, and Auerbach would make a 

large premium for acting as some kind of intermediary to conceal the 

transaction and to participate as a Straw Man, to hide the fact of actual 

payment or repayment of the Bonds to Goodman and his entities”); ¶ 47 

(Auerbach ... was not using his own funds to purchase the Bonds”); ¶ 49-

67 (detailing the series of events that took place on Feb. 3, 2022).

d) The express purpose of engaging Alliance as a middle man was to conceal 

Goodman’s efforts to cash out his insider-held bonds in preference to noninsider creditors. Compl. ¶ 36 (“Commencing in late 2021, and through 

early 2022, however, the Debtor had amassed tens of millions of dollars in 

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cash on hand, mainly because it stopped paying its largest creditors, 

including FedEx. The question for Goodman was how to exploit this cash 

for his or his other companies’ and friends’ benefit, before creditors would 

exercise their remedies and the cash would be seized); ¶ 42 (“Goodman did 

not want the Debtor to simply pay on the Bonds, because he would then 

have to share in the proceeds of such payment with other holders of the 

Bonds”); ¶ 43 (“Goodman knew that he could not direct payments by the 

Debtor on the GIH Bonds and the Genesis Bonds and that he, GIH, and UFS 

would face potential liability for breach of contract if he did so”); ¶ 44 

(“Frinzi encouraged Goodman to make some money on these Bonds, and 

advised that a third party be used for the transaction”); ¶ 45 (“the intent in 

using a third party was to hide the true nature of the transaction from the 

Debtor’s creditors, make it more difficult to claw-back any payments 

through the use of intermediaries and conduits, and for Goodman to avoid 

potential breach of contract claims related to the UFS agreement”); ¶ 47 

(“rather than Auerbach buying the Bonds with his funds, or rather than the 

Debtor redeeming or paying the Bonds directly, Goodman, Frinzi, and 

Auerbach agreed to hide the true nature of the persons involved and the 

payments and transactions involved”); ¶ 47 (“Auerbach knew or should 

have known that he would not be offered millions of dollars in profit, 

without putting in any money or assuming any risk, except as a payment to 

participate in the fraudulent and concealed nature of the transaction”). 

e) The Debtor was insolvent. Compl. ¶ 24 (“As of February 1, 2022, and at all 

times material hereto, the Debtor was insolvent”); see also Compl. ¶ 35 

(“the Debtor lost its largest customer in October 2021, had stopped paying 

Federal Express Logistics (a major creditor) tens of millions of dollars and 

knew that FedEx would soon begin to exercise its remedies, had stopped 

paying other large creditors and vendors, and knew that it would soon be 

unable to make payment on the Bonds”); ¶ 42 (“Goodman knew that the 

Debtor was insolvent, would not be able to repay the Bonds and would 

shortly default on the Bonds”); 47 (“Auerbach knew or should have known 

that the Debtor was insolvent”).

30. In light of these allegations and others set forth in the Complaint, the Trustee has 

more than adequately pled his claims for actual fraudulent transfer under both the Bankruptcy 

Code and TUFTA, based on the applicable pleading standards, even if rule 9(b) applies. 

D. THE COURT SHOULD COLLAPSE THE FRAUDULENT TRANSACTIONS AND DISREGARD 

THE FORM THE PARTIES USED TO HIDE THE TRUTH. 

31. This is a Court of equity that exists to see through the form of a transaction to its 

substance. This Court is empowered not to permit itself to be “fooled” by the form of any given 

transaction, and it is not bound by any such form. Here, all legal arguments aside for the moment, 

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there can be no question that the Movants made an ill-gotten gain of $5.9 million when they put 

no capital of their own into the transaction, assumed no risk of holding and collecting the Bonds, 

and were paid only and solely to act as a shill to hide and conceal the transaction from the Debtor’s 

creditors, or by way of a “gift” from Frinzi to his friends to impress upon them how profitable his 

friendship can be. There is no question that the Debtor lost $5.9 million in the transaction, because 

the price of the Bonds was 35% and not 53%. The $5.9 million was “dirty,” plain and simple. Is 

the Court now to be fooled into concluding that everything was above-board, ethical, and 

transparent? Of course not. 

32. The Movants argue “there is no legal basis for bifurcating an otherwise singular 

transaction into a ‘Main Transfer’ component and another component.” MTD p. 8. But they cite 

various cases in support that say no such thing. Those cases deal with title to wired funds. See 

Barnhill v. Johnson, 503 U.S. 393, 400 (1992) (holding that “the debtor has implemented a mode, 

direct or indirect . . . of disposing . . . of property or . . . an interest in property” when the debtor 

loses its claim against the bank for the transferred funds and the transferee obtains the claim against 

the bank for the deposited funds) (emphasis in original); Regions Bank v. Provident Bank, Inc., 

345 F.3d 1267, 1277 (11th Cir. 2003) (“Title to funds in a wire transfer passes to the beneficiary 

bank upon acceptance of a payment order.”); United States v. BCCI Holdings (Luxembourg), S.A., 

980 F. Supp. 21, 27 (D.D.C. 1997) (“Because an accepted transfer cannot be revoked without the 

consent of the beneficiary, and the beneficiary bank incurs an obligation to the beneficiary upon 

acceptance of the funds, the ownership interest in those funds must pass from the originator upon 

completion of the funds transfer.”).

33. The Court need not employ anything beyond common sense to conclude a single 

wire transfer might contain more than one component. A customer might, for example, pay pastdue invoices and pre-pay for future goods with one wire. If that customer later filed for 

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bankruptcy, the part of the wire attributable to past-due invoices might constitute a preference, 

whereas the balance would not. See 11 U.S.C. § 547(b)(2) (transfer must be “for or on account of 

an antecedent debt owed by the debtor before such transfer was made” to constitute a preference). 

Surely the Movants do not mean to suggest the Court has no power to bifurcate the wire in this 

hypothetical or other similar situations.

34. Even setting aside the Movants’ failure to employ common sense, they also 

evidently failed to identify the doctrine of collapsing multiple related transactions:

In comparing the value received with the value transferred, courts generally limit 

their inquiry to the specific transaction that the plaintiff seeks to avoid. However, 

where there are multiple related transactions, courts will sometimes “collapse” the 

transactions and consider the transactions as one integrated transaction for purposes 

of assessing whether the debtor received reasonably equivalent value. United States 

v. Tabor Court Realty Corp., 803 F. 2d 1288, 1301–03 (3d Cir. 1986), cert. denied, 

483 U.S. 1005, 107 S. Ct. 3229, 97 L. Ed. 2d 735 (1987). See also Voest–Alpine 

Trading USA Corp. v. Vantage Steel Corp., 919 F. 2d 206, 212–13 (3d Cir. 1990); 

HBE Leasing Corp. v. Frank, 48 F.3d 623, 635–36 (2d Cir. 1995); In re Old CarCo 

LLC, 435 B.R. 169 (Bankr. S.D.N.Y. 2010) (quoting In re Sunbeam Corp., 284 

B.R. 355, 370 (Bankr. S.D.N.Y. 2002) (“The collapsing concept is usually applied 

when a series of transactions actually comprise a single integrated transaction, 

notwithstanding the fact that the ‘formal structure erected and labels attached’ make 

them appear distinct.”)). Whether multiple distinct transactions should be 

“collapsed” and viewed as a single integrated transaction turns on the substance 

rather than the form of the transactions, and courts consider the overall intent and 

impact of the transactions. See, e.g., Liquidation Trust v. Preferred Bank (In re 

Syntax–Brillian Corp.), 2011 WL 3101809, at *11 (Bankr. D. Del. July 25, 2011) 

(“Instead of focusing on one of several transactions, a court should consider the 

overall financial consequences these transactions have on the creditors.”) (citations 

omitted). In other words, courts focus “not on the structure of the transaction but 

the knowledge and intent of the parties involved in the transaction.” In re Hechinger 

Inv. Co. of Del., 274 B.R. 71, 91 (D. Del. 2002). Factors that courts have considered 

in deciding whether or not to collapse multiple transactions include (1) whether all 

parties involved in the individual transactions had knowledge of the other 

transactions, (2) whether each transaction would have occurred on its own, and (3) 

whether each transaction was dependent or conditioned on the other transactions. 

In re Mervyn's Holdings, LLC, 426 B.R. 488, 497 (Bankr. D. Del. 2010); In re Jevic 

Holding Corp., 2011 WL 4345204, at *5 (Bankr. D. Del. Sept. 15, 2011); In re 

Syntax–Brillian Corp., 2011 WL 3101809 (Bankr. D. Del. July 25, 2011). 

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Goodman v. H.I.G. Capital, LLC (In re Gulf Fleet Holdings, Inc.), 491 B.R. 747, 770-71 (W.D. 

La. 2013); see Wesco Aircraft Holdings, Inc. v. SSD Investments, Ltd. (In re Wesco Aircraft 

Holdings, Inc.), Adv. 23-3091, 2024 WL 156211, *19-20 (Bankr. S.D. Tex. Jan. 14, 2024) 

(discussing and denying summary judgment due to fact issues under collapsing doctrine, a/k/a 

integrated transaction doctrine or step-transaction doctrine).

35. Applying this doctrine, the Court should collapse (a) the alleged sale of the Bonds 

from GIH and Genesis to Alliance with (b) the alleged sale of the Bonds from Alliance to the 

Debtor. These were not legitimately distinct transactions. Both agreements were executed 

simultaneously, and Alliance never paid for the Bonds. By their very nature, these transactions 

could not have occurred on their own; they were dependent or conditioned on one another, and 

everyone involved knew what was going on. The Defendants all but admit this by (a) 

acknowledging in their MTD that “a major holder of these bonds—James Goodman—was 

reluctant to directly sell these bonds back to the company on which he previously served as a 

director for fear of having the transactions attacked should the company default” and (b) boasting 

in their MTD that “[t]his created an opportunity that the Auerbach Defendants cannily (and legally) 

exploited simultaneously negotiating two separate deals.” MTD p. 4. 

36. After eliminating Alliance as a completely fictitious middleman or shill, however, 

the true nature of the transaction becomes clear. On February 3, 2022, the Debtor wired 

$17,032,060.00 to Alliance, and Alliance immediately transferred $10,570,912.00 to GIH, 

$561,041.00 to Genesis, and $5,900,107.00 to Auerbach Partners. No other money changed hands. 

Simultaneously, GIH and Genesis conveyed the Bonds to Alliance, and Alliance immediately 

conveyed the Bonds to the Debtor. But once collapsed, it becomes clear that in reality the Debtor 

transferred $10,570,912.00 to GIH in exchange for the GIH Bonds, $561,041.00 to Genesis in 

exchange for the Genesis Bonds, and $5,900,107.00 to Auerbach Partners in exchange for 

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absolutely nothing. The money and the bonds flowed right through Alliance in opposite directions 

to and from the real parties to the transaction. 

E. THE DEBTOR DID NOT RECEIVE ANY VALUE IN EXCHANGE FOR THE $5.9 MILLION 

TRANSFER. 

37. The Movants’ argument that the Debtor received reasonably equivalent value 

depends entirely on its already debunked claim that the Court cannot look behind the form of the 

underlying transactions to their substance. But once the Court collapses those transactions, the 

Movants’ reasonably-equivalent-value argument falls apart. The Trustee does not dispute that the 

Debtor received value for the $10,570,912.00 it transferred to GIH and the $561,041.00 it 

transferred to Genesis. The Trustee has not sued to recover those amounts. Auerbach Partners, 

however, provided nothing in exchange for the $5.9 Million Transfer, and that is the transfer the 

Trustee seeks to avoid. None of the authority the Movants cite has any bearing on the situation at 

hand. 

38. What the Movants fail to acknowledge is the obvious: they were paid $5.9 million 

for acting as a shill to hide and conceal the transaction. Perhaps Goodman or someone else 

received some value for that, but the Debtor did not. The Debtor could and did purchase the Bonds 

for $11 million at a discount, but it received nothing by way of having the transaction hidden and 

concealed. And, principles of in pari delicto and estoppel apply to the Movants’ arguments here: 

one participating in a known wrong can hardly use his knowing participation in that wrong as a 

defense or an affirmative defense.

39. On this issue, there is one more important principle to consider. Texas law implies 

a resulting trust into the transaction here: “A resulting trust arises by operation of law when title is 

conveyed to one person but the purchase price or a portion thereof is paid by another. The parties 

are presumed to have intended that the grantee hold title to the use of him who paid the purchase 

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price and whom equity deems to be the true owner.” Troxel v. Bishop, 201 S.W.3d 290, 298 (Tex. 

App. – Dallas 2006). Unlike a constructive trust, a resulting trust is implied by law ab initio and 

does not need a court’s adjudication to exist. See San Antonio Loan & Trust Co. v. Hamilton, 283 

S.W.2d 19, 27 (Tex. 1955). Again, the Debtor’s funds were used by Alliance to purchase the 

Bonds. At that very moment in time, Texas law provides that the Debtor, and not Alliance, owned 

the Bonds. For Alliance to then “sell” to the Debtor what the Debtor already “owned” for an added 

$5.9 million is both a constructively and an actually fraudulent transfer. 

F. THE TRUSTEE HAS ADEQUATELY PLED A CLAIM FOR CIVIL CONSPIRACY AND/OR 

KNOWING PARTICIPATION IN BREACH OF FIDUCIARY DUTY. 

40. The Movants do not claim the Trustee has failed to plead claims for breach of 

fiduciary duty against Goodman and Frinzi. They merely take the position that the Trustee has not 

adequately pled that Auerbach and Auerbach Partners (the “Conspiracy Defendants”) engaged in 

a conspiracy with Goodman and Frinzi to breach their fiduciary duties. Specifically, the Movants 

make three arguments: (a) the Trustee does not allege the Conspiracy Defendants had a meeting 

of the minds with Frinzi; (b) the Complaint ignores the structure of the transaction; and (c) there 

was no injury to the bankruptcy estate. 

41. The first argument falls apart with a simple quote from the Complaint: “In other 

words, rather than Auerbach buying the Bonds with his funds, or rather than the Debtor redeeming 

or paying the Bonds directly, Goodman, Frinzi, and Auerbach agreed to hide the true nature of the 

persons involved and the payments and transactions involved.” Compl. ¶ 46. The Trustee also 

alleged that Auerbach, Goodman, and Frinzi had a long-standing friendship, Compl. ¶ 33; that 

Goodman and Frinzi brought Auerbach up to speed on the Debtors’ financial woes, Compl. ¶ 35; 

and that Auerbach knew his role was to facilitate something nefarious, Compl. ¶ 47. Even if ¶ 46 

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did not expressly say it, the Court can certainly infer from these additional allegations that the 

Conspiracy Defendants and Frinzi had a meeting of the minds.

42. The second argument makes no sense. Structuring the transaction the way they did 

was the key to the conspiracy. The Movants argue that “[n]either of the Conspiracy Defendants 

were ever Debtor’s fiduciary ....” MTD p. 17. But the Trustee never claimed they were. They 

argue “their decision to purchase the Bonds from Goodman did not implicate Goodman’s fiduciary 

duties to Debtor since Goodman owned the Bonds.” MTD p. 17 (emphasis original). But they cite 

no authority for this puzzling proposition. The Complaint alleges Goodman owed fiduciary duties 

to the Debtor, Compl. ¶¶ 21, 23, and the duty of loyalty prohibits self-dealing. The Movants argue 

“Frinzi—not Goodman—‘personally authorized and instructed’ Debtor’s purchase of the Bonds 

....” MTD p. 17 (quoting Compl. ¶ 128). But the Complaint also alleges Goodman was ... the 

person who controlled Frinzi ... and whose instructions Frinzi followed ....” Compl. ¶ 24. It 

would not be necessary or even expected for two people to direct a particular corporate action, but 

that does not mean two or more people cannot conspire for one of them to act. 

43. This argument feels like a sovereign citizen invoking the alleged difference 

between “driving” and “traveling.” See Van Horne v. Valencia, 1:21-CV-00173-BU, 2022 WL 

3574299, *4 n.2 (N.D. Tex. Feb. 16, 2022) (“Van Horne then appears to base his arguments [that 

he was not driving his vehicle] on the assertion that he was traveling, not driving. Such a 

distinction is frivolous and without merit.”). In other words, the Movants seem to believe their 

scheme to obfuscate and legitimize an illegitimate transaction by involving a shill actually worked. 

But again they elevate form over substance. They also completely ignore the fact that Alliance 

never paid GIH or Genesis for the Bonds. Even if the Court were bound to honor the form the 

conspirators gave the transaction, it would mean the Debtor transferred more than $17 million to 

Alliance in exchange for property Alliance did not own.

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44. The third argument does not really add up either. The Movants claim the Trustee 

“cannot recover because [he] cannot establish any injury to the Bankruptcy Estate.” MTD p. 17. 

They argue “[t]he Debtor benefitted from the [transaction], leaving more funds available for 

distribution to unsecured creditors than would have been available if the transaction had never 

occurred.” Id. But, again, it is not clear why they believe this, and again they seem to believe 

their scheme succeeded. In reality, more than $17 million dollars went out the door, and the Debtor 

received absolutely nothing in exchange for the $5.9 million that went to Auerbach Partners. In 

any event, the fact that the Debtor had less debt (the relative quantity of which is unknown) does 

not mean the Debtor had more funds. It objectively had $17 million fewer dollars than before. 

The Complaint does not address the quantity of non-insider bonds that remained outstanding after 

this transaction, but the Court can reasonably infer that a hidden insider payment reduced the 

amount available to distribute to non-insider bondholders given the Debtor’s imploding financial 

situation at the time.

45. The analysis does not end with the elements of a traditional conspiracy. Even 

though the Trustee has referred to this claim as one for “conspiracy,” he has also alleged a claim 

for knowing participation in a breach of fiduciary duty. Judge Lindsay recently considered a 

motion to dismiss and held the following:

[T]he allegations in the Second Amended Complaint are sufficient to put Powers 

on notice that Plaintiff is asserting a claim for knowingly participating in Mr. 

Pethick's alleged breaches of fiduciary duty. This is so even though Count 4 is titled 

“Aiding and Abetting Breach of Fiduciary Duties.” As Plaintiff's pleadings satisfy 

the elements for a claim of knowing participation in a breach of fiduciary duty, 

dismissal of Count 4 is not appropriate at this juncture.

DeWolff, Boberg & Assoc., Inc. v. Pethick, 3:20-CV-3649-L, 2022 WL 4589161, *8 (N.D. Tex. 

Sept. 29, 2022) (record citation omitted); see Smith v. Morris R Greenhaw Oil and Gas, Inc. (In 

re Greenhaw Energy, Inc.), 359 B.R. 636, 641 (Bankr. S.D. Tex. 2007) (“the Fifth Circuit has held 

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that court may took to the substance of pleadings rather than the labels stated in the pleadings in 

determining what relief the [plaintiff] seeks”).

46. Likewise, it does not matter that the Trustee labeled this claim as one for 

“conspiracy” because he has more than adequately pled a claim for knowing participation. “Under 

Texas law, ‘where a third party knowingly participates in the breach of duty of a fiduciary, such 

third party becomes a joint tortfeasor with the fiduciary and is liable as such.’” Meadows v. 

Hartford Life Ins. Co., 492 F.3d 634, 639 (5th Cir. 2007) (quoting Kinzbach Tool Co. v. Corbett–

Wallace Corp., 138 Tex. 565, 160 S.W.2d 509, 514 (1942)). “To establish a claim for knowing 

participation in a breach of fiduciary duty, a plaintiff must assert: (1) the existence of a fiduciary 

relationship; (2) that the third party knew of the fiduciary relationship; and (3) that the third party 

was aware that it was participating in the breach of that fiduciary relationship.” Id. (citing Cox 

Tex. Newspapers, L.P. v. Wootten, 59 S.W.3d 717, 721–22 (Tex. App. 2001)). In addition to 

pleading a conspiracy in detail, the Trustee also pled each of these elements. Either way, the Court 

should deny the MTD. Even if the Court were to conclude the Trustee has not alleged and cannot 

allege a conspiracy claim, the Court can interpret this as a claim for knowing participation. 

G. THE TRUSTEE HAS ADEQUATELY PLED A CLAIM FOR UNJUST ENRICHMENT. 

47. The Movants quote King v. Baylor Univ., 46 F.4th 344, 367 (5th Cir. 2022), for the 

propositions that “the unjust enrichment theory ‘does not operate to rescue a party from the 

consequences of a bad bargain’” and “‘the enrichment of one party at the expense of the other is 

not unjust where it is permissible under the terms of an express contract.’” MTD p. 18. But they 

omit another critical quote from that case: “‘[g]enerally speaking, when a valid, express contract 

covers the subject matter of the parties’ dispute, there can be no recovery under [such] a quasicontract theory[.]’” Id. (quoting Fortune Prod. Co. v. Conoco, Inc., 52 S.W.3d 671, 684 (Tex. 

2000) (emphasis added). Here there was no valid contract because Alliance could not contract to 

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sell Bonds it had not paid for and did not own. Furthermore, there was no contract between the 

Debtor and Auerbach Partners, the recipient of the $5.9 Million Transfer. The Trustee has stated 

a plausible claim for unjust enrichment.

H. THE TRUSTEE HAS A VIABLE CLAIM FOR PARTNERSHIP LIABILITY

48. The Movants ask the Court to dismiss the partnership liability claim against the 

Trusts because they claim the Trustee has not stated a claim against the partnership, Auerbach 

Partners. For reasons already discussed, the Trustee has stated multiple claims against Auerbach 

Partners, so the Court should deny the MTD with respect to partnership liability. The Movants do 

not content general partners are not liable for partnership debts nor give any other reason for 

dismissal.

49. On this issue, the Movants argue that the Trustee has pled no claim against the 

Trusts or against Mrs. Auerbach. But he has: the trusts are the general partners of Auerbach 

Partners. He has sued Mrs. Auerbach as the trustee of the trusts, but he states in his complaint: 

As the Trustee does not know what type of trust this trust is, or what jurisdiction it 

is organized under, he does not know whether he is required to sue the trustee in 

order to sue the trust, or whether he may sue the trust directly. The trustee is 

prepared to dismiss J. Auerbach from this Complaint, without prejudice, provided 

that Auerbach Trust 1 and Auerbach Trust 2 agree that the Trustee does not need to 

sue her in order to sue and to obtain a judgment against these trusts. 

Complaint at p. 5, n. 1. 

50. If the Trustee needs not sue the trustee of the trusts to obtain a judgment against the 

trusts, then the trust defendants need only so state and agree, and the Trustee will dismiss Mrs. 

Auerbach without prejudice. 

IV. ALTERNATIVE MOTION

FOR LEAVE TO AMEND

51. Alternatively, to the extent the Court determines the Trustee failed to plead any 

element of a cause of action with sufficient particularity, the Trustee requests leave to amend. Rule 

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15 provides: “[t]he court should freely grant leave when justice so requires.” Fed. R. Civ. P. 

15(a)(2). There is a bias in favor of granting leave to amend, and the Court should not deny leave 

to amend with a substantial reason. E.g. Laruche Imports, Inc. v. APL Ltd., No. 11-3127, 2012 

U.S. Dist. LEXIS 15731, *2 (S.D. Tex. Feb. 8, 2012). “Normally, courts will afford a plaintiff the 

opportunity to overcome pleading deficiencies, unless it appears that the defects are incurable.” 

Bryan v. City of Dallas, 188 F. Supp. 3d 611, N.D. Tex. 2016) (citing Great Plains Trust Co. v. 

Morgan Stanley Dean Witter & Co., 313 F.3d 305, 329 (5th Cir. 2002) (“[D]istrict courts often 

afford plaintiffs at least one opportunity to cure pleading deficiencies before dismissing a case, 

unless it is clear that the defects are incurable or the plaintiffs advise the court that they are 

unwilling or unable to amend in a manner that will avoid dismissal.”); Hitt v. City of Pasadena, 

561 F.2d 606, 608 (5th Cir. 1977) (stating that “a court ordinarily should not dismiss the complaint 

except after affording every opportunity for the plaintiff to state a claim upon which relief can be 

granted” (internal alterations omitted))). 

52. Accordingly, the Court should permit the Trustee to amend the Complaint to the 

extent necessary to meet applicable pleading standards.

V. CONCLUSION

WHEREFORE, PREMISES CONSIDERED, the Trustee respectfully request that the 

Court enter an order (A) denying the MTD; (B) granting leave to amend the Complaint to the 

extent the Court would otherwise be inclined to grant the MTD; and (C) providing the Trustee 

such other and further relief to which he is entitled at law or in equity. 

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 RESPECTFULLY SUBMITTED this 19th day of March, 2024. 

MUNSCH HARDT KOPF & HARR P.C.

By: /s/ Davor Rukavina 

Davor Rukavina, Esq. 

Tex. Bar No. 24030781 

Thomas D. Berghman, Esq. 

Tex. Bar No. 24082683 

Julian P. Vasek, Esq. 

Tex. Bar No. 24070790 

500 N. Akard St., Ste. 4000 

Dallas, Texas 75201 

214-855-7500 

drukavina@munsch.com 

tberghman@munsch.com 

jvasek@munsch.com 

COUNSEL FOR SCOTT M. SEIDEL, 

CHAPTER 7 TRUSTEE

CERTIFICATE OF SERVICE

The undersigned hereby certifies that, on March 19, 2024, a true and correct copy of this 

document (along with any attachments) was served via the Court’s CM/ECF system on all parties 

entitled to such notice, including counsel for the Movants (jgolinkin@jlcfirm.com). 

By: /s/ Davor Rukavina 

Davor Rukavina, Esq. 

4868-7722-0014v.2 013229.00016

Case 23-03090-mvl Doc 13 Filed 03/19/24 Entered 03/19/24 15:42:52 Desc Main

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