It’s been more than two years since the Garden Oaks Maintenance Organization (GOMO) filed for bankruptcy, which prompted nearly 450 current and former property owners in the neighborhood to file claims against the homeowners association in an attempt to recoup the transfer fees they paid upon purchasing their properties.
The total amount of those claims exceeds $1.4 million, but they might not get any of it back. And if that happens, the bankruptcy case will have been costly to the neighborhood and ultimately unnecessary.
Houston attorney Randy Williams, appointed as GOMO trustee after its bankruptcy case was converted from Chapter 11 to Chapter 7 last June, filed an omnibus objection to those claims last week in federal bankruptcy court. Williams argued that the claims should be disallowed because they are either baseless or time barred under the law.
GOMO filed for bankruptcy after it was found to not have the authority to collect transfer fees in a 2016 state district court case against homeowners Peter and Katherine Chang, because it violated the Texas Property Code when it added the fee provision to Garden Oaks’ deed restrictions in the early 2000s. But in his filing last week, Williams asserted that the ruling applies only to the Changs and not the other homeowners in the neighborhood, meaning they have no legal basis for requesting a refund of their transfer fees. Williams also claimed the statute of limitations for the property code violation expired after 180 days, which was not brought up by GOMO’s defense in the case against the Changs.
According to last week’s court filings, those who made claims against GOMO have until July 4 to file a response to the objection or risk having their claim disallowed without a hearing. A hearing before Judge David Jones is scheduled for 2 p.m. July 29 in the Bob Casey United States Courthouse at 515 Rusk Ave.
Williams did not respond to a Tuesday voicemail seeking comment. He said in January, after filing a motion to allow an omnibus claim objection, that Jones “is going to have to decide whether or not the way we read the law is correct.”
Jones converted GOMO’s bankruptcy case from Chapter 11 to Chapter 7 after the HOA’s restructuring plan did not garner enough support from the neighborhood and it continued to be at odds with the court-appointed committee of unsecured creditors, which included Peter Chang. Both Chang and Pam Parks, who served as office manager for GOMO, said in January the organization’s leadership knew before filing for bankruptcy the statute of limitations could protect it from claims regarding the .75 percent transfer fees, which served as GOMO’s primary source of revenue.
Williams enlisted GOMO’s bankruptcy attorney, Johnie Patterson, to also serve as his counsel after his appointment as Chapter 7 trustee. Patterson submitted the court documents filed last week.
Before the case was converted by Jones, Parks said Patterson intended to argue the claims against GOMO were invalid because of the statute of limitations.
GOMO had nearly $585,000 in assets as of Dec. 18, according to court documents.
“The judge might say, ‘You know, for whatever reason, that statute of limitations doesn’t apply, so I am going to carve up the corpse and give everyone 15 cents on their dollar,’ ” Parks said Tuesday.