DALLAS (CN) - An investor in several multimillion-dollar debt portfolios asked a judge to ensure that portfolio manager Heritage Pacific Financial does not devalue their joint venture.
Truestar Investments Ltd., HVAC 50 JV and TILHP3 sued the Plano-based company, HP Debt Exchange LLC and Chris Ganter in Dallas County Court in June.
They allege that under the parties' contract, Heritage Pacific was to manage the portfolios and give Truestar the net funds collected on a monthly or quarterly basis.
Truestar allegedly held a 99 percent interest in the HPAC joint venture in December 2011, while Heritage Pacific received the remaining 1 percent.
The plaintiffs moved for a temporary restraining order and temporary injunction on Nov. 19, seeking a full accounting of the venture's assets.
"Since the formation of these joint ventures, however, defendant Heritage Pacific has failed to distribute any net funds, and failed to provide an accounting of funds as required by the joint venture agreements," according to the nine-page motion authored by Brackett Ellis attorney B. Scot Pierce. "Defendants even admit that this is true, and yet plaintiffs still have made no distributions and provided no information."
The plaintiffs say this forced them to exercise their option to sell the portfolio back to HP Debt Exchange - a Heritage Pacific affiliate - in February, but the defendants failed to perform.
"These debt portfolios are at risk," the motion states. "To the extent that Heritage is collecting on the portfolio, then the funds are apparently being diverted or held. Or, to the extent that Heritage is not attempting to collect the portfolio, then the portfolio is rapidly losing value."
The plaintiffs claim they face an "imminent and irreparable" injury in the interim.
If the defendants are allowed to continue, they will not be able to satisfy a judgment that the plaintiffs think they will win, anyway, according to the motion.
"Plaintiffs do not have an adequate remedy at law because if the defendants' conduct continues, then defendants will not have the assets to satisfy an award of damages," Pierce wrote. "The only assets in the joint ventures are the debt portfolios."