Firm News, Client Results

Cain & Skarnulis wins $2 million fraud trial in Dallas bankruptcy court

Cain & Skarnulis recently won a fraud trial in the United States Bankruptcy Court for the Northern District of Texas, along with a ruling that the judgment of approximately $2 million cannot be discharged by the bankruptcy process.  C&S filed its application for more than $400,000 in attorney’s fees May 2, 2017. 

C&S associate Zach Bowman took the lead in the trial, backed by C&S partner Charlie Cain. 

Fort Apache Energy, Inc. vs. Billy Huddleston was tried in an adversary proceeding.  Fort Apache, an oil and gas operator, proved that the defendant fraudulently induced it into drilling a well without payment for nearly $2 million in expenses.  The defendant represented that he had not raised the money necessary from investors.  At trial, Fort Apache proved that not only had the investor money been raised, it had been misappropriated by the defendant for personal expenses, including significant sums lost gambling in casinos. 

Judge Stacey G.C. Jernigan found that Fort Apache proved that it agreed to the project based on false pretenses.  She further determined that the fraud was sufficient to give rise to a nondischargeable debt, meaning that even after the bankruptcy discharges other debts, the defendant will continue to be liable for the judgment.  C&S seeks to recover more than $400,000 in attorney's fees for the successful prosecution of the case. 

The case began in two separate state court proceedings (one filed by the defendant in Dallas).  C&S pushed the case through complex discovery and motion practice, successfully obtaining several important pretrial verdicts.  C&S transferred the case to bankruptcy court when the defendant sought bankruptcy protection. 

“We’ve prided ourselves on being able to tackle complex disputes from beginning to end,”  Charlie Cain, one of the founders of the firm, said. “The ruling today highlights our firm’s diverse practice and deep talent pool.”  Zach Bowman said, “The court absolutely got this one right.  But results like this are never guaranteed.  It took a coordinated and focused effort to get through litigation in the state courts and trial in the bankruptcy court to protect our client’s rights.”


Since 2007, C&S has represented both plaintiffs and defendants in a tailored litigation approach to meet clients’ individual needs.  The firm combines the high‑end legal service of a large firm with the flexibility and value afforded by a smaller boutique, to achieve outstanding client results.

The firm is a growing business law boutique with expertise in litigation, arbitration, and transactional services.  C&S boasts accomplished trial lawyers and advisers with experience in a broad range of areas, including contractual and business disputes, securities, antitrust, labor and employment law, insurance and risk transfer, and a litany of other practice areas.  The firm has represented clients ranging from Fortune 500 companies to individuals, across many industries including oil and gas, insurance/reinsurance, technology, software, construction, banking and finance, hospitality, real estate, music, and fashion.