Articles Posted in Business Entities

iStock-1215119911A trial court must divide community property in a “just and right” manner in a Texas divorce.  The court must properly characterize the property before it in order to achieve a just and right division. Characterization can be complex when the parties have significant assets acquired through various means.  It can get even more complicated when the parties have ownership interests in business entities that also own property.

A husband recently appealed the property division in his divorce decree, arguing the court had improperly awarded him property owned by business entities as his separate property. The parties got married in 1993.  They lived in Connecticut, but the wife moved to Texas in 2018 for a job.  The husband remained in Connecticut where his construction businesses were located. He told the wife, however, that he would move to Texas in a year to a year and a half, but ultimately did not do so.

Wife Files for Divorce

The wife petitioned for divorce in 2019.  The husband’s father and his company filed suit against three of the husband’s businesses a few days before the divorce trial. The lawsuit alleged the husband’s companies owed his father’s company $770,644 for equipment rental.

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iStock-1215119911A Texas premarital agreement can help protect each party’s assets in the event a marriage ends in divorce. Premarital agreements may also include other provisions, including a requirement to submit certain issues to binding arbitration instead of for determination before a judge or jury. In a recent case, a husband attempted to vacate an arbitrator’s decision, arguing he had exceeded his authority.

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What is a Mediated Settlement Agreement?

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A mediated settlement agreement (“MSA”) in a Texas divorce is binding if it meets certain requirements.  It must state that it is not subject to revocation in bold letters, capital letters or underlined text.  It must also be signed by each party and the party’s attorney, if present. Tex. Fam. Code Ann. § 6.602.  Some Texas courts have held that an MSA may be unenforceable if it is obtained by fraud, duress or coercion.

A husband recently challenged an MSA, partly on the grounds that he allegedly signed it under duress.

The parties had been married since 1981.  Some of the property acquired during the marriage was held by a limited partnership in which the parties owned a 95% interest.  In August 2017, the husband was arrested after the wife reported he had threatened her with a firearm.  The wife filed for divorce the very next day.

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