Bill Author, Texas State Representative, and Buck Keenan Partner: Mano DeAyala
https://capitol.texas.gov/tlodocs/88R/billtext/pdf/HB04381F.pdf#navpanes=0
House Bill 4381 provides added access to appeals for small businesses and individuals and protects judgment creditors by adding Civil Procedure and Remedy Code.
HB 4381 provides added access to appeals for small businesses and individuals while protecting judgment creditors by adding Civil Procedure and Remedy Code § 52.007. Effective for cases filed on or after September 1, 2023, the law requires a court to allow a judgment debtor worth less than $10 million to post “alternative security with value sufficient to secure the judgment” if the judgment debtor shows that the amount required by CPRC § 52.006 and TRAP 24.2(a)(1) would “require the judgment debtor to substantially liquidate the judgment debtor’s interests in real or personal property necessary to normal course of the judgement debtor’s business.”
By way of example, if a judgment debtor becomes liable for a $3 million judgment and its sole business is derived from the operation of a small shopping strip or apartment complex worth $5 million, upon showing that posting a cash bond would require the debtor to liquidate its sole business asset the trial court may instead substitute a first lien on the real estate in place of cash bond. In this example, the judgment creditor obtains adequate security, and the debtor is able to pursue appeal without going out of business. Preserving litigants access to appeals while protecting judgment creditors is a win-win for litigants and our civil justice system.
For small businesses facing significant judgments, H.B. 4381 offers a crucial lifeline, ensuring that the right to appeal remains available without jeopardizing the core assets of the business.