Case Reference: #2024-TX-0312

Client profile: European industrial manufacturer, annual revenue €200M+, supplying specialised drilling equipment to US energy sector.

Claim: $1,724,000 — three invoices for equipment delivered to a Texas-based energy services company between March and August 2023. Payment terms: Net 60. All three invoices confirmed received. None paid.

Age at mandate: 14 months from first invoice due date. The client's internal credit team had been following up for ten months before engaging us.

The situation as presented

The client's credit manager described it as a dead end. The debtor's office in Houston — previously a busy operation with 40+ employees — was vacant. The phone number was disconnected. The company's registered agent had filed a certificate of termination with the Texas Secretary of State. The client's US attorney advised that pursuing a dissolved entity was "unlikely to yield meaningful recovery" and recommended writing off the balance.

$1.7 million. Written off on the advice of a lawyer who checked the obvious and stopped looking.

The complication

Texas is generous to businesses, including those that would prefer to stop being businesses when inconvenient creditors come calling. The Texas Business Organizations Code allows companies to dissolve and wind up affairs with relative speed. But dissolution doesn't eliminate obligations — it transfers them. The question is: transferred to whom, and where?

What we found

Our Houston team — which, among other capabilities, includes a former investigator from the Texas Comptroller's office — started with the dissolved entity's final franchise tax filing. The filing listed a "successor entity" responsible for remaining obligations. That entity was a newly formed LLC, registered in Delaware but operating from an address in Midland, Texas.

The Midland operation was running the same rigs, serving the same clients, employing many of the same people, and generating revenue from the same contracts. The principals were the same. The equipment — including our client's drilling components — was physically present on site. The dissolution wasn't a closure. It was a costume change.

The former Houston entity's directors had transferred operational assets — equipment, contracts, client relationships — to the new LLC while leaving the debts behind with the dissolved shell. In Texas, this is called a fraudulent transfer under the Texas Uniform Fraudulent Transfer Act (TUFTA), codified in the Texas Business & Commerce Code, Chapter 24. It's also remarkably common in the energy sector, where companies routinely restructure between boom and bust cycles.

Deployment

We filed a TUFTA action in Midland County District Court, naming both the dissolved entity and the successor LLC. Simultaneously, we obtained a temporary restraining order preventing further asset transfers from the successor entity — a critical step, because once a debtor knows enforcement is coming, assets tend to develop mobility.

The debtor's counsel initially contested the filing on jurisdictional grounds, arguing that the Delaware LLC was not subject to Texas court authority. This argument lasted approximately as long as it took our counsel to point out that the LLC maintained a physical office, employees, and equipment in Midland County, Texas. The court agreed.

Resolution

Settlement reached 62 days after filing. The successor LLC paid $1,620,000 — representing the full principal less a negotiated reduction on one disputed invoice — via wire transfer. The settlement included a confession of judgment for the remaining $104,000, payable in quarterly instalments. Our client's credit manager described the outcome as "the resurrection of a receivable we'd already eulogised."

Key capability demonstrated

Forensic asset tracing through dissolved and successor entities. The ability to identify fraudulent transfers requires more than legal knowledge — it requires investigative capability: accessing state filings, cross-referencing corporate registries, conducting physical site verification, and maintaining relationships with local professionals who know the operational landscape.

The Texas intelligence note

Texas has a four-year statute of limitations on debt (Texas Civil Practice & Remedies Code §16.004). Energy sector restructurings accelerate during commodity price downturns. If you're holding a receivable against a Texas entity that has gone quiet, dissolved, or "ceased operations," the asset trail is warmest in the first six months. After that, successor entities have time to further restructure, transfer, or encumber assets.

The debtor's strategy depends on you running out of patience before they run out of moves. Our strategy is simpler: we find the assets first.

If you're holding an unpaid receivable against a Texas-based company — active, dissolved, or somewhere in between — deploy our Houston team. Request a situation report.