Texas Business Court Decision – Wednesday, May 6, 2026
No. 25-BC08B-oo25 The Mark at Weatherford Owner, LLC v. Darwin German, etc., et al. (Div. 8, Judge Stagner) 25-bc08b-0025-the-mark-at-weatherford-owner-v-german-2026-tex-bus-22.pdf
Contracts.
Background. Plaintiff agreed to sell a multi-million apartment complex to defendants and when they struggled to assemble the acquired cash, plaintiff salvaged the deal by extending them a $4.7 million bridge loan; in return, plaintiff accepted membership units in the buying entity as collateral, with the understanding plaintiff would be repaid within months; to guarantee repayment, plaintiff received a “Put Right;” if certain conditions – automatic triggers – occurred, including any contractual default by defendants, plaintiff could demand that defendant German personally repurchase the membership units for cash. Plaintiff exercised the Put Right, and defendant German did not repay the loan. Plaintiff sued. The matter comes before the court on plaintiff’s motion for summary judgment, and the issue for the court is whether any of the automatic triggers had been activated, in particular whether defendants breached a requirement that they turn over certain fees or distributions arising from the property until plaintiff’s interest was fully redeemed; at closing, two fees amounting to more than $1 million were owed to defendants. Plaintiff argues the fees became payable to him regardless of whether defendants had sufficient cash on hand to pay them and that failure to remit the funds amounted to an automatic trigger allowing him to exercise the Put Right; defendants disagreed, contending the fees were not payable because they did not have the funds at closing and they were not required to honor the Put Right. The court rejects defendants’ position: “A contractual obligation does not evaporate simply because the obligor lacks liquidity. The fees were due and payable at closing and defendants’ failure to remit them triggered the Put Right.” The court grants plaintiff’s motion for summary judgment.
Held: (1) the term “default” is unambiguous, and the parties’ agreements concerning the automatic triggers was not limited to material defaults; (2) neither is the term “payable” ambiguous – it refers to amounts that are due or owed, regardless of whether the obligor has the means to satisfy them; the relevant documents for the deal leave no room for dispute: the relevant fees were due at closing, a point defendants concede, and were due plaintiff whether defendants could pay them or couldn’t – “A party can be flat broke and still owe every penny;” economic impracticability is not a recognized defense in Texas; (3) however, the provision is limited to a specific pool of money and is not a general lien on defendants’ entire business operations, and alleged failures to remit funds from unrelated transactions would not establish automatic triggers; (4) plaintiff’s argument that German breached confidentiality provisions in the agreements by posting a You-Tube video about the deal was not sufficiently developed factually to provide a standalone basis for summary judgment; (5) nor can plaintiff’s claim that defendants breached their contractual duties to use “reasonable efforts” to reacquire plaintiff’s interest by the deadline set out in the agreements be resolved on this factual record, and the court declines to grant summary judgment on this theory; (6) plaintiff has, however, established a default based on defendants’ failure to remit the fees set out in the agreement: (a) turnover of the fees at closing was a contractual duty; (b) the fees were payable because they were legally owed, and defendants’ lack of liquidity does not change that; (c) the fees were due because they were in the category of “payable” funds; and (d) defendants did not pay them to plaintiff; (7) this default was an automatic trigger which triggered the Put Right; plaintiff exercised the Put Right and German, who had guaranteed repayment, did not pay. Plaintiff is granted summary judgment.