GRAPEVINE, Texas, April 27, 2020 (GLOBE NEWSWIRE) — United Development Funding (“UDF,” as described below) announced today the Court of Appeals for the Fifth District of Texas at Dallas, (the “Appeals Court”) issued a mandate in the matter of United Development Funding, L.P., et. Al. versus J. Kyle Bass, et. al., affirming the decision by Judge Sally Montgomery of Dallas County Court at Law No. 3 (the “Trial Court”) denying a bid to dismiss UDF’s lawsuit under the Texas Citizens Participation Act (TCPA) filed by defendants Kyle Bass (“Bass”) and Hayman Capital (“Hayman”).
The Appeals Court mandate, effective immediately, comes shortly after last month’s ruling by the Supreme Court of Texas (the “Supreme Court”) denying Bass/Hayman’s petition to review. The mandate allows UDF’s litigation against Bass and Hayman to resume and reinstates UDF’s ability to complete discovery.
UDF filed this lawsuit in November 2017 claiming Bass/Hayman made malicious false statements that disparaged UDF’s business, interfered with its contracts and business relations, and caused extensive damage to UDF’s business. After limited discovery, the Trial Court denied Bass/Hayman’s motion filed under the TCPA, known as an anti-SLAPP motion.
In August 2019, the Appeals Court affirmed the earlier decision by the Trial Court to deny Bass/Hayman’s bid to dismiss UDF’s lawsuit. In their 47-page opinion, the Appeals Court concluded that “UDF satisfied its burden to establish a prima facie case that Hayman’s internet posts were false” and that “UDF met its burden under the TCPA to provide clear and specific evidence establishing that Hayman acted with actual malice and proximately caused UDF’s alleged damages and losses.”
Hollis Greenlaw, CEO of UDF, stated, “The Appeals Court decision confirmed that we sufficiently established that Bass/Hayman intentionally harmed UDF so that they could profit at the expense of UDF’s investors.” Greenlaw reiterated that “UDF now has the green light to obtain the relief UDF sought when we filed this lawsuit—to expose the truth necessary to hold Bass/Hayman accountable for their actions and to make UDF’s investor’s whole.”
Greenlaw also confirmed that “UDF welcomes the renewed litigation, predicting that the full discovery process will reveal how Bass and those with whom he schemed tried to hide behind a false identity to perpetrate their short and distort scheme. UDF expects that Bass and Hayman Capital will finally be held accountable to UDF’s shareholders.”
The UDF plaintiffs are represented by Ellen A. Cirangle, Jonathan E. Sommer and Kyle A. Withers with Lubin Olson & Niewiadomski LLP, who have extensive experience successfully litigating market manipulation claims against hedge funds; Judge Scott A. Brister of Hunton Andrews Kurth LLP, who has previously provided 20 years of judicial service at all levels of the Texas Court system including the Texas Supreme Court; Rodney Smolla, Dean of the Delaware Law School of Widener University and a nationally-recognized expert in First Amendment law; and Leland C. de la Garza, Stewart H. Thomas, Elizabeth A. Fitch, and Joshua C. Rovelli with Hallett & Perrin, P.C.
The Appeals Court mandate and their earlier 47-page opinion can be found at the Texas Judicial Branch Fifth Court of Appeals website (www.search.txcourts.gov), using the Case No. 05-18-00752-CV. Public documents filed with the Supreme Court can be found at the Supreme Court of Texas website (www.search.txcourts.gov), using the Case No. 19-0874. Public documents filed with the court, including discovery and UDF’s filings, can be found at www.udfonline.com/litigation. A complete history of all the court filings related to this case can be found at the Trial Court’s website (https://courtsportal.dallascounty.org/DALLASPROD), using the Case No. CC-17-06253-C. 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.
“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.
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This press release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements may relate to business prospects, outcome of litigation and other matters. We make these forward-looking statements in reliance on the safe harbor protections provided under the Private Securities Litigation Reform Act of 1995. All statements included in this press release that address activities, events or developments that we expect, believe or anticipate will exist or may occur in the future, are forward-looking statements. These forward-looking statements are based on management’s current intents, beliefs, expectations and assumptions and on information currently available to management that are subject to risks and uncertainties, many of which are outside of our control, and could cause future events or results to be materially different from those stated or implied in these forward-looking statements. Words such as “may,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “would,” “could,” “should” and variations of these words and similar expressions are intended to identify forward-looking statements. Investors should read the cautionary statements set forth in our periodic filings with the U.S. Securities and Exchange Commission.
