Galaz v. Galaz

Appellants Raul Galaz and Segundo Suenos, LLC challenged the district court's award of actual and exemplary damages to debtor. Raul partly founded Artist Rights Foundation (ARF). When debtor divorced Raul, she obtained a 25% economic interest in the company. Raul then transferred ARF's royalty rights to Segundo Suenos without notifying anyone. After debtor filed for Chapter 13 bankruptcy, she brought this adversary proceeding against appellants, alleging the fraudulent transfer of assets. The court affirmed the district court's holding that the purported transfer of the music rights from ARF to Segundo by Raul was fraudulent under the Texas Uniform Fraudulent Transfers Act (TUFTA), Tex. Bus. & Com. Code 24.001 et seq. The district court concluded that TUFTA allowed a court to set aside a fraudulent transfer under 24.008(a)(1), and adopted the bankruptcy court's finding that Raul acted with actual intent to defraud debtor. Therefore, the district court did not err in awarding debtor exemplary damages against both Raul and Segundo. View "Galaz v. Galaz" on Justia Law