Net Worth and Supersedeas

The Dallas Court of Appeals has reaffirmed its opinion in Anderton v. Cauley, in which the court held that the trial court's judgment being appealed is not to be included as a liability of the judgment debtor in calculating the judgment debtor's net worth for purposes of determining the amount of an appeal bond.

In McCullough v. Scarbrough, Medlin  and Assocs., the court held that the trial court did not err by refusing to allow the judgment debtor to deduct the amount of the judgment from net worth.  The Appellants also argued that they would suffer substantial economic harm if required to post additional security.  The court of appeals concluded that there was no abuse of discretion on the trial court's part in rejecting this argument because the court determined that there was evidence the appellants could access funds from their retirement accounts to post the supersedeas bond.  This holding is significant as it would seem to suggest that funds that are otherwise exempt from execution must be included in a judgment debtor's net worth calculation.  To put it another way, to avoid execution on non-exempt assets during an appeal, it appears that an appellant may have to pledge exempt assets and thereby put more at risk for the right of appeal than would otherwise be at risk had no supersedeas bond been filed.  The court's opinion may be found here.

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