Spring Street Partners - IV, L.P. v Lam et al

Filing 141

OPINION on Final Judgment. (Signed by Judge Lynn N. Hughes) Parties notified. (ghassan, )

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5
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Spring Street Partners,
Plaintiff,

vcrsL1s

Civil Action H-08-107

Douglas Lam, ct al.,
Defendants.

Opinion on Final Judgment
I.

Introduction.
T h e story of Bayou City Fish Company, Inc., and its assets involves a large cast. The

people are:

A. Douglas Lam;
B. T e n Lam, Douglas's sister;
C. Vinh Ngo, Ten's husband;
D. En Kha Lam, Douglas's brother;
E. Long Lam, Douglas's brother; and

F. Diane Lam, Douglas's wife.
T h e companies are:

A. Bayou City Fish Company, Inc., formed by Douglas in 1994;
B. Wells Star Group, Inc., formed by Douglas in 2001;

L Seafood Management, LLC, formed by T e n in 2005;
T
D. L Seafood, LP, formed by Douglas and T e n in 2005 with Douglas owning 49%.
T
T e n owning 50%, and L Seafood Management LLC owning I%;
T
C.

E. DKL hDTL Family Management, LLC, formed by Douglas, Diane, En Kha, and
Long in 2006 with each owning 25%; and

F. JNT Group, LLC, formed by Douglas in 2007.
Bayou borrowed $8.5 million from Wachovia in

200 j.

Wachovia sold the debt to

Spring Street Partners. Bayou defaulted , petitioned for bankruptcy, and had transferred assets
to other businesses without consideration.

2.

Tbc Lam Entities.
Douglas or his family owned the businesses in the transfers. Douglas directed the

transfers, beginning with moving Bayou's retail operations to Seafood.

No record of

consideration exists.
Wachovia lent Bayou $8.5 million. Wells leased the building at 415 East Hamilton
to Seafood. Bayou moved all of its retail operations and assets, worth $I ~ O , O Oto ,
O Seafood.
No evidence of consideration exists for this transfer.
Douglas created Family ten days after Wachovia had notified Bayou that it was
accelerating the loan. Douglas conveyed his 49% interest in Seafood to Family. N o
consideration existed for this transfer. Douglas guaranteed the note Bayou issued to Spring
Street. W h e n Bayou defaulted, it petitioned for bankruptcy.
In 2007, Douglas formed JNT, and then Family conveyed its 49% interest in Seafood
to Vinh. J N T bought 41 5 East Hamilton from Wells, and Gold Bank lentJ N T $I .25 million.
T h e evidence of payment shows no exchange of consideration for the transfers of
ownership and assets, except when actual unrelated parties are involved. Checks show
consideration for current purchases of inventory that were made in the ordinary course of fish
mongering. T h e checks paid for fish, not furniture. The evidence shows amounts that may
equal something, but they are not linked in time. Seafood said it bough trucks from Bayou.
The evidence only confirms that Seafood bought trucks from Hayes Truck Group and that
someone wrecked one truck.

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Concl~lsion.
A person who mixes his property with that of another must separate his property with

precision or have the doubt resolved against him. Douglas Lam and his relatives could account
for nothing.

Signed on February

w,

201 2,

at Houston, Texas.

/

Lynn N. ~ u ~ h e s
United States District Judge

'Joseph Story, Commentaries on the Law of Bailments 28-30 (2d ed. r 8.p); Ray Andrews Brown, The
Law of Personal Property 67.69 (Walter B. Rauschenbush ed., 3d ed. 1 ~ 7 5 ) .