Texas Court Nixes Trans-Gulf Director’s $2.8M Payout

Law360, New York (June 17, 2011, 1:38 PM EDT) -- A Texas appeals court struck down a $2.8 million judgment against the director of bankrupt Trans-Gulf Drilling Services Inc. on Thursday, ruling Community National Bank is owed less because it received sale and insurance proceeds from Trans-Gulf's rig and equipment.

However, Trans-Gulf director C. Kyle Smith was unable to persuade the court that he had fully satisfied his obligations as guarantor of a promissory note with Community National and thus owed nothing. The promissory note was secured by Trans-Gulf's drilling rig, which collapsed in October 2008,...
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