Sale of 5 San Antonio-location dental clinics’ property potential customers to fraud lawsuit in opposition to Dallas purchaser

The Malone providers this 7 days sued KP-SA Administration and Pham for fraud, conversion — the unauthorized having of home — and breach of deal in state District Courtroom in San Antonio.

The clinics function underneath the title Smiley Dental & Orthodontics.

Under phrases of the deal, KP-SA compensated $300,000 up front and financed the remaining $3.2 million with the Malones. The acquire price was comprised of just about $3.2 million in goodwill, $160,000 in accounts receivable, $100,000 in stock and $80,000 in fixtures and equipment.

KP-SA ought to have paid out almost $3 million by now but has only compensated $781,140, the lawsuit alleges. The plaintiffs are in search of more than $3.8 million in damages and interest.

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The parties’ settlement grants the Malone corporations an speedy appropriate to foreclose and consider possession of the collateral on a default with out likely to court docket, the match suggests.

In reaction to desire letters and foreclosures notices, however, Pham “threatened to abscond and mystery absent all collateral” so the plaintiffs would hardly ever uncover it, the suit provides.

“Mr. Pham has consistently manufactured these threats and not long ago has reiterated that he has no dilemma with emptying all accounts and hiding all the collateral and gear of the dental tactics,” Scott Malone states in a declaration connected to the lawsuit.

To end that from going on, the Malone organizations received a temporary restraining purchase that helps prevent the defendants from distributing any gains or taking away furniture and tools from the tactics.

It could not be determined if Pham or his representatives opposed the request for the get. He could not be arrived at for remark Thursday. Austin attorney John P. Ferguson, who signifies the Malone businesses, stated he could not comment with no his clients’ authorization.

A listening to to lengthen the get right up until a demo is set for Jan. 24

The clinics, four in San Antonio and a person in Schertz, had operated either as M&M Orthodontics or U Much too Dental & Orthodontics just before the asset sale to KP-SA.

A Malone partnership continued to very own 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. Another Dallas organization, Smiley Dental Administration Co., has managed the techniques and gets 15 p.c of the gains, though KP-SA gets 85 p.c of the profits, the accommodate suggests. Smiley Dental has 31 locations in Texas, its web site claims.

Smiley Dental Management is owned by Pham’s ex-wife, dentist Lynh Thy Pham, the fit suggests. It also is a defendant in the go well with, accused of getting possession of the Malone companies’ collateral and employing the collateral though they stay unpaid. She did not instantly respond to a request for remark.