Sale of 5 San Antonio-spot dental clinics’ belongings potential customers to fraud lawsuit towards Dallas purchaser
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The owners of 5 dental clinics in San Antonio and Schertz sold the small business property to a Dallas firm in 2016 for $3.5 million.
But finding buyer KP-SA Administration and principal Thang “Kido” V. Pham to pay back has been like pulling tooth, say the sellers — providers owned by dentists Scott and Diana Malone of San Antonio.
The Malone firms this week sued KP-SA Administration and Pham for fraud, conversion — the unauthorized using of home — and breach of deal in point out District Court in San Antonio.
The clinics work underneath the title Smiley Dental & Orthodontics.
Under conditions of the offer, KP-SA paid $300,000 up front and financed the remaining $3.2 million with the Malones. The purchase cost was comprised of nearly $3.2 million in goodwill, $160,000 in accounts receivable, $100,000 in stock and $80,000 in fixtures and machines.
KP-SA ought to have paid out practically $3 million by now but has only paid $781,140, the lawsuit alleges. The plaintiffs are trying to find far more than $3.8 million in damages and fascination.
The parties’ agreement grants the Malone firms an quick right to foreclose and choose possession of the collateral on a default without having heading to court, the fit claims.
In response to desire letters and foreclosures notices, even so, Pham “threatened to abscond and solution away all collateral” so the plaintiffs would under no circumstances locate it, the go well with provides.
“Mr. Pham has constantly designed these threats and lately has reiterated that he has no challenge with emptying all accounts and hiding all the collateral and gear of the dental methods,” Scott Malone suggests in a declaration connected to the lawsuit.
To halt that from going on, the Malone corporations acquired a non permanent restraining order that stops the defendants from distributing any earnings or eliminating furniture and equipment from the methods.
It could not be established if Pham or his associates opposed the ask for for the order. He could not be achieved for comment Thursday. Austin lawyer John P. Ferguson, who represents the Malone organizations, said he could not remark devoid of his clients’ authorization.
A listening to to increase the get until eventually a demo is set for Jan. 24
The clinics, 4 in San Antonio and one particular in Schertz, had operated both as M&M Orthodontics or U Far too Dental & Orthodontics in advance of the asset sale to KP-SA.
A Malone partnership ongoing to possess the clinics’ authentic estate, so it has been KP-SA’s landlord.
The clinics have been rebranded as Smiley Dental & Orthodontics following the asset sale closed. A different Dallas corporation, Smiley Dental Management Co., has managed the techniques and gets 15 % of the earnings, although KP-SA gets 85 per cent of the income, the match says. Smiley Dental has 31 spots in Texas, its site states.
Smiley Dental Administration is owned by Pham’s ex-spouse, dentist Lynh Thy Pham, the accommodate suggests. It also is a defendant in the match, accused of having possession of the Malone companies’ collateral and making use of the collateral even though they remain unpaid. She did not straight away reply to a request for remark.
In his declaration, Scott Malone claimed Thang Pham has threatened personal bankruptcy when pressed to make payments on the loan. KP-SA basically filed for Chapter 11 in November 2017. The petition listed the Malone partnership as the largest unsecured creditor, owed $3.2 million.
Two months just after submitting, KP-SA voluntarily dismissed its bankruptcy circumstance. It did not want to continue the situation for the reason that it reported all troubles with the landlord had been fixed. In his declaration, Scott Malone reported the individual bankruptcy was dismissed just after he built a deal with KP-SA to postpone payments.
In the meantime, KP-SA held an “exclusive to start with option” to purchase the clinics’ office environment structures, according to files submitted with the lawsuit.
At some level, Smiley Dental required to purchase the five place of work buildings and a further that was not part of the 2016 offer, Malone says in his declaration. After Smiley Dental was not able to line up the revenue for the obtain, Malone moved to offer the true estate to a further investor.
“When Kido discovered out I was marketing the actual estate to somebody else, he threatened to consider me to court and tie anything up, as properly as shift all of the collateral and people to Smiley’s place of work on Fredericksburg Road … where I could not get it,” Malone says.
The Malone partnership previous month bought its Schertz place of work constructing, the Guadalupe County Appraisal District’s website exhibits.
