Tuesday, February 17, 2015
Court filing: David Wallace denies everything
Taylor claims that Wallace failed to pay the $1.2 million the Securities and Exchange Commission ordered him to repay to the investors who were cheated in the BizRadio scheme.
"Defendant denies each and every allegation," the document says. Though Wallace lists a prominent Houston attorney as his lawyer, he filed the papers himself. In the document, he says the receiver, Thomas Taylor, shouldn't get anything, and that Wallace's costs and attorney fees should be covered.
The entire $1.2 million was supposed to be repaid by December 31, 2012, but Wallace kept pushing the deadline back, all the way to December 31, 2014, by feeding court-appointed receiver Thomas Taylor III a series of stories about the money Wallace-Bajjali was going to make on its projects in Joplin and Amarillo and the millions the firm would make when it went public.
When the December 31 deadline passed, Taylor sent letters to Wallace and Bajjali January 5 letting them know that the game was over and action was going to be taken against them and they had only 10 business days to repay the debt in full.
By the end of those 10 days, Wallace and Bajjali had both resigned from all of the companies that owed the money, in what appears to be an effort to avoid paying what they owe.
The following letter was sent to both Wallace and Bajjali:
Reference is made to certain replacement promissory notes payable to the order of Thomas L. Taylor III, as Receiver for Kaleta Capital Management, LP, a Texas Limited Partnership as detailed below:
- Replacement Promissory Note dated as of May 6, 2006:
-Laffer Frishberg Wallace Economic Opportunity Fund, L.P. in the amount of $25,000.00 plus accrued interest to date hereof in the amount of $6,743.15;
-Replacement Promissory Note dated as of August 12, 2008: Laffer Frishberg Wallace Economic Opportunity Fund, L.P. in the amount of $250,000.00 plus accrued interest to date hereof in the amount of $119,383.56;
-Replacement Senior Secured Promissory Note dated as of March 26, 2009: West Houston WB Realty Fund, LP in the amount of $360,176.35 plus accrued interest to date hereof in the amount of $101,599.33;
-Replacement Promissory Note dated as of April 7, 2009: West Houston WB Realty Fund, LP in the amount of $20,000.00 plus accrued interest to date hereof in the amount of $7,769.32;
-Replacement Senior Secured Promissory Note dated as of March 30, 2009 in the amount of $215,000 plus accrued interest to date hereof in the amount of $60,388.49.
Copies of the above-referenced Promissory Notes are enclosed.
Pursuant to the terms of the referenced notes, each was due and payable on December 31, 2014. Demand for payment in full of the principal and accrued interest was made on January 5, 2014. The Makers of the Notes have failed to make payment and are now in default. On November, 26, 2013, you executed a Guaranty as to each of the above-referenced notes. A copy of each Guaranty is enclosed. Pursuant to the terms of the Guarantys executed by you related to each of the referenced notes, demand is hereby made for payment in full of the principal amount plus accrued interest, due within ten business days of the date of this demand.
When Taylor received no response, he filed the legal action against Wallace and Bajjali.