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c. Palmer's Testimony
Respondent contends that Dondi Financial stock had no
liquidating value after 1984 because Palmer, the bankruptcy
trustee's attorney during Dondi Financial's bankruptcy
proceedings, testified that Dondi Financial was insolvent by
1984. Respondent asserts that Palmer's opinion is convincing
because he was independent and his findings are supported by a
reasonable foundation (the real estate downturn from 1982 to
1984, and crash by early 1984; Vernon's liability for the loans
owned by Dondi Residential Properties, Inc., for its property;
and Vernon's extensive lending of money on commercial real estate
projects). We disagree.
Palmer believed that the FSLIC appraisers underappraised
property, yet he relied on the FSLIC appraisals and did not use
an independent appraiser. Palmer did not consider Vernon's non-
Texas assets. Palmer was reviewing whether Dondi Financial had
made any fraudulent conveyances within the last 4 years before
its insolvency. Under the then-applicable Texas fraudulent
conveyances law, a transfer was void if a debtor (Dondi
Financial) did not have enough assets in Texas to pay all of its
debts. Tex. Bus. & Com. Code Ann. sec. 24.03(a) (West 1986).3
Thus, Palmer's valuation of Vernon and Dondi included only Texas
assets. See In re Dondi Financial Corp., 119 Bankr. 106, 108
3 This statute was amended in 1987. See Tex. Bus. & Com.
Code Ann. sec. 24.003, Historical Note (West 1987).
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