A South Central Texas wagyu beef company filed for bankruptcy Monday in the Southern District of Texas after getting hit a year ago with a $30 million breach of contract and fraud verdict.
Flatonia-based HeartBrand Holdings and its subsidiary American Akaushi Association filed for protection under Chapter 11 of the U.S. Bankruptcy Code citing liabilities between $10 million and $50 million and assets between $50 million and $100 million.
In its filing, HeartBrand points to a court requirement that it post a cash bond in order to appeal the Fort Bend County jury verdict – money needed to prevent the plaintiff in the case, Simonton-based Twinwood Cattle Company, from collecting on the judgment.
Vinson & Elkins partner Harry Perrin of Houston is the lead bankruptcy lawyer advising HeartBrand. V&E also represented the company during the trial.
Twinwood sued HeartBrand claiming that American Akaushi withheld valuable information about the pedigree of its rare Japanese cattle.
In its filing, HeartBrand said it has “no choice” but to seek bankruptcy court protection.
“Faced with the inability to post additional security in an ongoing appeal of an unjust trial verdict in a Texas state court, the debtors find themselves out of options, out of time, and with only one path forward to maximize value for the shareholders – Chapter 11,” HeartBrand wrote in its bankruptcy petition.
Lawyers at McKool Smith and Yetter Coleman represented Twinwood in the civil trial.
The case is In re HeartBrand Holdings, Inc., SDTX Bankruptcy, No. 22-90127.