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Home New Cases Tex-Gas Holdings Accuses Multiple Defendants of Fraud and Breach of Contract In a Transaction Involving $30,000,000.00 Revolving Loan

Tex-Gas Holdings Accuses Multiple Defendants of Fraud and Breach of Contract In a Transaction Involving $30,000,000.00 Revolving Loan


June 1, 2021, Southern District of Texas – Debtor-Plaintiff Tex-Gas Holdings, LLC brings a lawsuit against two foreign individuals, a British Virgin Island company and three others, seeking a declaratory judgment to resolve a $30 million dispute between the parties regarding defendants’ failure to abide by their financing obligations under a promissory note, loan agreement, and a deed of trust.

By way of background, Tex-Gas, a U.S.-based affiliate of Gate Corporation Limited along with certain other non-debtor affiliates allegedly sought financing from domestic and international investors for providing a working capital revolving line of credit for their ongoing operations. Paul Haffner, the President of the British Virgin Island Company, Fortune Insight Limited, one of the Defendants, allegedly agreed to provide funding to the Debtor under a loan agreement and a promissory note. The promissory note and loan agreement was required to be secured by a security agreement and deed of trust on the property. According to the complaint, the parties allegedly executed the documents, filed and recorded the deed of trust. Per the deed of trust, Defendants Yuk and Bun were allegedly a part of the loan syndicate and were responsible to fund $30,000,000 to Fortune Insight, which would, in turn, be available to fund the loan to Debtors.

Through its complaint, Plaintiff accuses Defendants of making multiple false representations and promises to induce Plaintiff to enter into the transaction. The complaint states that Plaintiff relied on Defendants’ representations and promises, but allegedly did not receive a single dollar of the loan promised and agreed to by Defendants. According to the complaint, while Tex-Gas performed its obligations, Defendants failed to perform their contractual obligations and allegedly breached the loan documents by failing to fund the loan. 

Accordingly, Plaintiff charges Defendants with breach of contract and breach of fiduciary duty claims and seeks to determine the extent, validity, and priority of Defendants’ alleged lien. Plaintiff alleges that the Defendants’ lien and secured interest on the property are invalid, unenforceable, and must be avoided. Plaintiff urges the court to enter judgment in its favor and issue an order extinguishing the deed of trust, disallowing any claims alleged by the Defendants, declaring the Defendants’ actions as fraudulent, and enter a judgment against the Defendants for actual and exemplary damages as allowed by law.


Jones & Associates

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