Filed - Supreme Court of Texas

More documents

Recommendations

Info

FASB Section 450-20—55-12 (Exhibit 7) lists six factors to be considered in assessing the probability of a loss: 45 (1) nature of litigation, (2) progress of the case, (3) opinions of legal counsel, (4) experience of entity in similar cases, (5) experience of other entities, and (6) any decision of the entity’s management as to how the entity intends to respond to the lawsuit, claim, or assessment (“for example, a decision to contest the case vigorously or a decision to seek an out-of-court settlement.”). 46 These factors have to be considered in assessing whether the underlying judgment is a probable liability. 47 McCullough’s statement that he intends to contest or invalidate all of the judgment is relevant to the analysis. 48 That the case is now between a judgment and an appeal is relevant to the analysis. 49 Melton has not analyzed the six factors stated in FASB Section 450-20—55- 12 and has not been provided that kind of information. 50 He was not provided an opinion of the McCulloughs’ counsel that McCullough owes $365,000.00. 51 Melton cannot reasonably estimate McCullough’s liability. 52 45 RR, Vol. 5 of 6, p. 52-54. 46 RR, Vol. 5 of 6, p. 52-54. 47 RR, Vol. 5 of 6, p. 54. 48 RR, Vol. 5 of 6, p. 54. 49 RR, Vol. 5 of 6, p. 55. 50 RR, Vol. 5 of 6, p. 54-56. 51 RR, Vol. 5 of 6, p. 55. APPELLEES’ RESPONSE TO MOTION TO REVIEW ORDER ON SUPERSEDEAS BOND – Page 14
While Melton’s testimony provides the accounting framework for the GAAP analysis of contingent liabilities, Melton’s testimony does not support the McCulloughs’ argument that there was no conflict in the evidence and that accrual of a $365,000.00 judgment liability is proper. To the contrary, Melton identified six factors to consider in the accrual analysis. Two of the factors – the experience of the McCulloughs in similar cases and the experience of other defendants – were not addressed in the hearing and therefore have no bearing. Of the remaining four factors, three favor SMA and one— Kathryn Shilling’s testimony that McCullough probably owes $365,000.00 (that was never provided to Melton) — is inconsistent with actions taken by the McCulloughs indicating they do not accept her opinion, is colored by the circumstances of being offered to reduce the bond amount, and is inconsistent with Ms. Shilling’s statements in the docketing statement she filed with this Court. Melton testified that whether a liability is probable is a gray area. On this record, the trial court resolved that grayness against the McCulloughs. Melton’s testimony also supports SMA’s argument that under Anderton, the judgment should not be included in the net worth calculation. Melton testified the judgment is a contingent liability. Under Anderton, that liability is not included in the calculation of net worth. (b) Thomas Stewart’s testimony. testified that: The McCulloughs called Thomas Stewart next. On direct examination, Stewart 52 RR, Vol. 5 of 6, p. 56. APPELLEES’ RESPONSE TO MOTION TO REVIEW ORDER ON SUPERSEDEAS BOND – Page 15
Page 1 and 2: NO. 12-0454 IN THE SUPREME COURT OF
Page 3 and 4: SMA contested the McCullough’s cl
Page 5 and 6: III. ARGUMENT & AUTHORITIES The McC
Page 7 and 8: and, as a result, the judgment is n
Page 9 and 10: On June 6, 2012, the McCulloughs fi
Page 11 and 12: including the testimony of Robert M
Page 13 and 14: effectively supersede the judgment
Page 15 and 16: NO. 12-0454 IN THE SUPREME COURT OF
Page 17 and 18: SWORN TO AND SUBSCRIBED before me o
Page 19 and 20: Order issued Febrwu'y 7 , 2012 lJii
Page 21 and 22: Thompson, Dishict Clerk of Collin C
Page 23 and 24: 2. On August 25, 2011, Plaintiffs f
Page 25 and 26: the circumstances existing at the t
Page 27 and 28: "'all" McCulIoughs have additional
Page 29 and 30: $90,000.00 of their assets to third
Page 31 and 32: No. 05-11-01303-CV IN THE COURT OF
Page 33 and 34: amounts for future income taxes, $3
Page 35 and 36: S.W.2d 629, 635 (Tex. 1986) (citing
Page 37 and 38: (i) Anderton compels exclusion of t
Page 39 and 40: has not done so. 19 And, the McCull
Page 41 and 42: have been counted as a liability fo
Page 43: liability is “reasonably possible
Page 47 and 48: unknown. 61 Shilling did not tell S
Page 49 and 50: Other than some additional depositi
Page 51 and 52: McCulloughs are appealing the entir
Page 53 and 54: the misappropriated funds. 80 Stewa
Page 55 and 56: Once the contest is resolved and th
Page 57 and 58: overwhelming weight of the evidence
Page 59 and 60: testimony. 97 The trial court also
Page 61 and 62: Second, the McCulloughs argue that
Page 63 and 64: judgment debtor. It is only substan
Page 65 and 66: asset to pay litigation costs, they
Page 67 and 68: personal effects and jewelry, more
Page 69 and 70: McCulloughs to post an additional $
Page 71 and 72: CAUSE NO. 416-02008-2009 SCARBROUGH
Page 73 and 74: ---_.......----..............- __ _
Page 75 and 76: However, Stewart and Robert McCullo
Page 77 and 78: 6/10/11 -7/8/11 7/9/11-8/10/11 8/11
Page 79 and 80: IT IS THEREFORE ORDERED that Defend
Page 81 and 82: 326 S.W.3d 725, *; 2010 Tex. App. L
Page 83 and 84: MR. AND MRS. ROBERT MCCULLOUGH FINA
Page 85 and 86: ACCOUNTANTS' COMPILATION REPORT Mr.
Page 87 and 88: NOTE A - BASIS OF ACCOUNTING MR.AND
Page 89 and 90: Docket Sheet for: 05-11-01303-CV of
Page 91 and 92: Docket Sheet for: 05-11-01303-CV of
Page 93 and 94: Search http://apps.collincountytx.g
Page 95 and 96:
Search http://apps.collincountytx.g
Page 97 and 98:
Page 99 and 100:
Page 101 and 102:
Page 103 and 104:
Page 105 and 106:
Page 107 and 108:
Page 109 and 110:
Page 111 and 112:
Page 113 and 114:
Page 115 and 116:
Page 117 and 118:
Page 119 and 120:
Page 121 and 122:
Page 123 and 124:
Page 125 and 126:
Page 127 and 128:
show all

Filed - Supreme Court of Texas

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?