# In re Kay

Supreme Court of Texas, No. 24-0149

**In re Kay, No. 24-0149 (Tex. June 13, 2025). Holding: The trial court did not abuse its discretion in finding Kay's net worth, because that finding rested on crediting one side's experts; but the court of appeals abused its discretion in concluding that alternative security was categorically unavailable to Kay, because Rule 24.2(e) is not the exclusive authority and Rule 24.1(a)(4) lets a court allow alternative security for debtors with a net worth of $10 million or more.**

Practice areas: civil procedure, family law, financial services

## Key issues

- A trial court may order alternative security to supersede a money judgment under Rule of Appellate Procedure 24.1(a)(4) even for a judgment debtor whose net worth is $10 million or more; Rule 24.2(e), which requires alternative security for debtors under that threshold, is not the exclusive source of the authority, so the court of appeals erred in holding alternative security categorically unavailable.
- The Court found no abuse of discretion in the trial court's $147 million net-worth finding, which rested on crediting one side's valuation experts, and noted that tendering the very property whose valuation drove a $25 million bond generally will be adequate alternative security absent a particular need.

## Factual History
Laura Yosowitz sued her ex-husband, Martin Lee Kay, for breach of their divorce agreement and fiduciary duties, and after a jury trial the trial court awarded her roughly $54 million in actual damages (Opinion, PDF p. 2). To suspend enforcement of the judgment on appeal, Kay filed an affidavit of net worth asserting $754,373 and deposited two cashier's checks totaling half of that figure (Opinion, PDF p. 2). Yosowitz opposed, and the parties principally contested the value of Kay's 8,277,500 shares in his privately held startup, Entera Holdings, Inc., which is his one asset of material value (Opinion, PDF p. 2; Petition for Writ of Mandamus filed (Martin Lee Kay), PDF p. 17). Kay's experts, relying on his unsuccessful attempts to sell the shares or borrow against them and on legal restrictions on transferring the unregistered securities, valued them at $0, while Yosowitz's experts, who testified that they applied generally accepted accounting principles, supported a value of about $182 million, against a $46 million figure from a 2022 appraisal commissioned by Entera (Opinion, PDF pp. 2-3 & nn.2-3).

## Procedural History
After a multi-day bond hearing, the trial court found the testimony of Yosowitz's experts credible and Kay's not, found his net worth to be $147 million, ordered a $25 million bond or cash deposit, and impliedly rejected his offer to tender the stock certificate as alternative security under Rule of Appellate Procedure 24.1(a)(4) (Opinion, PDF p. 3 & nn.4-5). Kay challenged the order by motion in the court of appeals, which affirmed: it deferred to the trial court's credibility determinations on net worth, and it held that under Rule 24.2(e) alternative security is available only to judgment debtors with a net worth under $10 million (Opinion, PDF p. 4). Kay petitioned for mandamus in this Court under Rule 24.4(a) on February 28, 2024, and the Court decided the petition per curiam on June 13, 2025, without oral argument (Docket; Opinion, PDF pp. 4, 8-9). Kay says the Court's temporary stay has so far kept him from declaring bankruptcy (Brief on the Merits (Martin Lee Kay), PDF p. 19).

## Issues Presented
Kay presents whether the court of appeals clearly abused its discretion by disregarding the proper level of review and categorically disregarding his sworn evidence of net worth in favor of the opponent's speculation, whether it abused its discretion by disregarding the possibility of alternative security, and whether he has an adequate remedy by appeal (Brief on the Merits (Martin Lee Kay), PDF p. 11; Petition for Writ of Mandamus filed (Martin Lee Kay), PDF p. 10). Yosowitz frames the issues as whether the appellate court abused its discretion in denying Kay's supplemental motion to lower the bond and whether Kay conclusively established the facts supporting his net worth and his proposed alternative security (Brief on the Merits (Laura Yosowitz), PDF p. 10). The Court decided whether the net-worth finding should be disturbed and whether alternative security is categorically unavailable to debtors with net worth of $10 million or more (Opinion, PDF pp. 1, 5-7).

## Standard(s) of Review
Mandamus issues only if a court clearly abused its discretion, which includes acting without reference to guiding rules or principles, and an error of law or erroneous application of law to fact is an abuse of discretion (Opinion, PDF pp. 4-5). No showing of an inadequate remedy by appeal is required, because Rule 24.4 expressly authorizes review of supersedeas orders by mandamus (Opinion, PDF p. 5 n.7). The Court may not resolve disputed fact questions in mandamus (Opinion, PDF p. 6).

## Legal Arguments
**Whether the net-worth finding and the security amount can stand.**

**Relator (Kay):** The courts below misapplied the supersedeas protections the Legislature enacted after *Texaco v. Pennzoil*; his shares have no readily available market, so the valuation was unreasonably high, and the resulting $25 million requirement would deny his right to appeal and could cost him his business (Brief on the Merits (Martin Lee Kay), PDF p. 19; Petition for Writ of Mandamus filed (Martin Lee Kay), PDF p. 17).

**Real party in interest (Yosowitz):** The trial court, as it was free to do, credited her experts over Kay's, and the court of appeals simply deferred to those credibility determinations, which is not an abuse of discretion; Kay's argument appeals to public policy without regard to the plain language of Rule 24.2 and section 52.006 of the Civil Practice and Remedies Code (Response to Petition (Laura Elizabeth Yosowitz), PDF p. 16; Brief on the Merits (Laura Yosowitz), PDF p. 37).

**Whether alternative security is available.** Kay argues that the court of appeals clearly abused its discretion by disregarding the possibility of alternative security (Brief on the Merits (Martin Lee Kay), PDF p. 11). Yosowitz argues that Kay failed to show conclusively the adequacy of his proposed alternative security, and the court of appeals held that Rule 24.2(e) limits alternative security to debtors with net worth under $10 million (Brief on the Merits (Laura Yosowitz), PDF p. 10; Opinion, PDF p. 4).

## Stated Reasons the Court Should Take the Case
Kay argued that the case reflects challenges to Texas's effort to build a business-friendly legal environment and that, without direction from the Court, the same result could occur in many cases against founders of privately held businesses (Petition for Writ of Mandamus filed (Martin Lee Kay), PDF p. 17). Yosowitz argued that the court of appeals applied established rules of deference to credibility findings and that mandamus was unwarranted (Response to Petition (Laura Elizabeth Yosowitz), PDF p. 16).

## Practice Area Tags
civil-procedure, family-law, financial-services

## Procedural Posture/Vehicle
Original proceeding (petition for writ of mandamus) under Rule of Appellate Procedure 24.4(a) challenging a supersedeas order after the court of appeals affirmed; decided per curiam without oral argument (Opinion, PDF pp. 1, 4-5, 8-9).

## Amicus Involvement
None. The docket shows no amicus filings.

## Holding
The trial court did not abuse its discretion in finding Kay's net worth, because that finding rested on crediting one side's experts; but the court of appeals abused its discretion in concluding that alternative security was categorically unavailable to Kay, because Rule 24.2(e) is not the exclusive authority and Rule 24.1(a)(4) lets a court allow alternative security for debtors with a net worth of $10 million or more (Opinion, PDF pp. 1, 6-8).

## Court's Reasoning
**Net worth.** To supersede a money judgment, the amount of a bond or cash deposit must not exceed the lesser of 50 percent of the debtor's current net worth or $25 million, and the judgment debtor has the burden of proving net worth (Opinion, PDF pp. 5-6). Kay conceded that selling his shares is not "an absolute impossibility," and the parties agree that the trial court's calculation depended entirely on its credibility determinations about the value of the shares; because the trial court found Yosowitz's experts more credible and the Court may not resolve disputed fact questions in mandamus, the finding stands (Opinion, PDF pp. 6-7).

**Alternative security.** Rule 24.2(e), added in 2023 after the Legislature enacted Civil Practice and Remedies Code section 52.007, requires a court to allow alternative security for debtors with a net worth under $10 million, but it is not the exclusive authority: Rule 24.1(a) has long permitted supersedeas by "providing alternate security under Rule 24.2(e) or ordered by the court," so trial courts retain discretion to allow it for debtors with higher net worth (Opinion, PDF p. 7). Because the court of appeals wrongly held alternative security unavailable, it did not decide whether the trial court abused its discretion in impliedly rejecting Kay's offer of the stock certificate, and the Court directed it to consider that question first, expressing no view on the outcome (Opinion, PDF p. 8). The Court noted that if a court finds a net worth requiring a $25 million bond only because of the valuation of particular personal property, an unrestricted tender of that very property into the registry of the court generally will constitute adequate alternative security unless the record shows a particular need for different treatment (Opinion, PDF p. 8).

## Disposition
Without hearing oral argument, the Court conditionally granted mandamus relief and directed the court of appeals to determine whether the trial court abused its discretion in refusing to accept the Entera stock certificate as alternative security; the writ will issue only if it does not comply (Opinion, PDF pp. 8-9).

## Vote Breakdown
Per curiam opinion of the Court (Opinion, PDF p. 1).


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Source: The SCOTX Report, https://scotxreport.com/cases/24-0149. AI-generated summary of the Court's opinion, orders and the parties' briefs, with pin cites to the page of each document; verify against the Court's own documents at search.txcourts.gov.