United Development Funding Responds to Bass Appeal to Texas Supreme Court
January 23, 2020 | James Sprow | Blue Vault
In an article entitled “Appeals Court Rules in Favor of United Development Funding” posted on Blue Vault’s website on August 23, 2019, we stated that the premise of an earlier Blue Vault article posted in December 2017 about Kyle Bass and his closely-held company Hayman Capital Management, L.P. and their perpetration of a “short-and-distort” scheme by spreading false and damaging information about UDF to profit from shorting the UDF stock had been affirmed by the Texas Fifth Court of Appeals. Now Bass as appealed to the Texas Supreme Court in an attempt to reverse previous court judgments against him and his firm.
The following is excerpted from a January 22 press release by United Development Funding:
United Development Funding (“UDF,” as described below) announced on January 22 the filing of its Response to a Petition for Review in the Supreme Court of Texas (the “Supreme Court”) in the matter of J. Kyle Bass, et. al. versus United Development Funding, L.P., et. al.
On November 28, 2017, UDF filed a lawsuit in the Dallas County Court (the “Court”) against defendants J. Kyle Bass (“Bass”) and Hayman Capital (“Hayman,” as described below, and together with Bass, “Bass/Hayman”) asserting Hayman made false statements that disparaged UDF’s business and tortuously interfered with its current and prospective contracts and business relationships, and that those statements were made with malice and caused extensive damage to UDF’s business.
On June 12, 2018, the Court, after allowing limited discovery, ruled that the UDF plaintiffs had set forth a prima facie case of intentional business disparagement and tortious interference by Bass/Hayman, denying Bass/Hayman’s motion to dismiss the lawsuit under the Texas Citizen’s Participation Act (TCPA). On June 29, 2018, Bass/Hayman filed a notice of accelerated appeal with the Texas Judicial Branch Fifth Court of Appeals (the “Appeals Court”). UDF filed its Appellate brief on November 15, 2018, opposing the Bass/Hayman’s appeal and presented its oral argument to the Appeals Court on May 2, 2019.
On August 19, the Appeals Court affirmed the decision by the Court to deny Hayman Capital’s bid to dismiss UDF’s lawsuit under the TCPA. On November 6, 2019 Hayman filed a Petition for Review with the Supreme Court, where the matter is now pending. No assurances can be given that UDF will receive any damages as a result of the lawsuit, nor can any assurances be given regarding a timeframe for a resolution of the lawsuit.
Public documents filed with the court, including discovery and UDF’s filings, can be found at www.udfonline.com/litigation. UDF’s response opposing Hayman’s Petition for Review can be found at the Supreme Court of Texas website (www.search.txcourts.gov), using the Case No. 19-0874.
“UDF” refers to plaintiffs United Development Funding, L.P., United Development Funding II, L.P., United Development Funding III, L.P., United Development Funding IV, United Development Funding Income Fund V, United Mortgage Trust, United Development Funding Land Opportunity Fund, L.P., and United Development Funding Land Opportunity Fund Investors, L.L.C.
“Hayman” refers to defendants Hayman Capital Management, L.P., Hayman Offshore Management, Inc., Hayman Capital Master Fund, L.P., Hayman Capital Partners, L.P., Hayman Capital Offshore Partners, LP and Hayman Investments, LLC.
About United Development Funding IV
United Development Funding IV is a public Maryland real estate investment trust. UDF IV was formed primarily to generate current interest income by investing in secured loans and producing profits from investments in residential real estate. Additional information about UDF IV can be found on its website at www.udfiv.com. UDF IV may disseminate important information regarding its operations, including financial information, through social media platforms such as Twitter, Facebook, and LinkedIn.
Sources: United Development Funding, Blue Vault
