In Re Martin Lee Kay

Supreme Court of Texas
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No. 24-0149
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In re Martin Lee Kay,
Relator

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On Petition for Writ of Mandamus
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PER CURIAM

This mandamus petition arises out of an appeal from a
$54 million judgment awarded to real party in interest Laura Yosowitz
against her ex-husband, relator Martin Lee Kay. Kay argues the trial
court abused its discretion by (1) requiring him to post judgment
security in excess of statutory caps tied to net worth, and (2) refusing to
accept his offer of alternative security. Although we find no basis to
disturb the trial court’s finding of Kay’s net worth, we hold the court of
appeals abused its discretion in concluding alternative security was
categorically unavailable to Kay. We therefore conditionally grant
mandamus relief and direct the court of appeals to consider in the first
instance whether Kay conclusively established the adequacy of his
alternative security.
I.

Yosowitz sued Kay for breach of their divorce agreement and
fiduciary duties. Following a jury trial, the trial court awarded Yosowitz
roughly $54 million in actual damages. Seeking to suspend enforcement
of the judgment, Kay filed an affidavit of net worth, see TEX. R. APP.
P. 24.2(a)(1)(A), (c)(1), which Yosowitz opposed. Kay’s affidavit asserted
he has a net worth of $754,373. Kay also deposited two cashier’s checks
totaling half of his asserted net worth. See TEX. R. APP. P. 24.1(c)(1)(B),
24.2(a)(1)(B).
The trial court held a multi-day bond hearing at which the parties
principally contested Kay’s net worth. Specifically, the parties disputed
the value of Kay’s 8,277,500 shares in his privately held startup, Entera
Holdings, Inc. 1 Relying on Kay’s accounts of unsuccessful attempts to
sell his Entera shares to qualified investors or obtain a loan using the
shares as collateral, 2 Kay’s experts opined that neither the $46 million
figure from a 2022 appraisal commissioned by Entera or the
$182 million valuation offered by Yosowitz’s experts were

1 Yosowitz did not dispute any other component of Kay’s net-
worth calculation.
2 Kay approached Entera’s two institutional investors, Goldman

Sachs and Bullpen Capital, but the investors refused to extend Kay a
loan collateralized by his restricted shares or to purchase any of his
shares. Kay also made unsuccessful inquiries with the Lovett Agency
and Bernstein about seeking a loan or supersedeas bond with the shares
as collateral.

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representative of the shares’ value. 3 Kay’s experts instead opined the
shares should be valued at $0 due to legal restrictions on transferring
the unregistered securities and consequent low marketability.
Yosowitz’s experts relied on similar data points as Kay’s experts but
opined that no liquidity discount was necessary because it was already
inherent in the underlying number. Yosowitz’s experts also testified
that they applied generally accepted accounting principles (GAAP) in
calculating Kay’s net worth.
Crediting the valuation opinion of Yosowitz’s experts over Kay’s 4
and impliedly rejecting Kay’s offer to tender the stock certificate as
alternative security, 5 the trial court found Kay’s net worth was
$147 million and ordered him to submit a $25 million bond or cash
deposit in order to supersede the judgment. 6 Kay then sought review of

3 Starting with the per-share price from Entera’s Series A-1
Preferred round of equity financing, in which Entera issued 779,505
shares at $22.45 per share to investors, the Entera-commissioned study
applied a 40% discount for lack of marketability, resulting in a per-share
value of $5.39. The value also included a 27.15% discount to account
“for market and Company-specific changes since the transaction.”
4 The trial court found that the testimony of Yosowitz’s experts

was credible, supported by credible and consistent evidence, and based
on sound methodology. The trial court also found that Kay’s experts’
calculations were neither credible nor consistent with the evidence and
that their underlying methodology was not sound.
5 During the bond hearing, Kay offered to tender the stock
certificate for his Entera shares instead of a bond. See TEX. R. APP.
P. 24.1(a)(4).
6 The trial court also denied Kay’s related request to lower the

required bond amount to $1,000 due to substantial hardship, which Kay
has since abandoned.

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the trial court’s supersedeas bond order by motion with the court of
appeals. See TEX. R. APP. P. 24.4(a).
The court of appeals affirmed. First, the court rejected Kay’s
contention that the trial court abused its discretion in finding that he
had a net worth over $10 million. Relying on the trial court’s role as the
sole judge of credibility, the court of appeals upheld the trial court’s
discretion to accept Yosowitz’s evidence that Kay might be able to sell
the Entera shares under an applicable exemption. By extension, the
court concluded, the trial court validly rejected Kay’s evidence that the
shares lacked any value due to his inability to sell them. Second, the
court of appeals rejected Kay’s contention that the trial court abused its
discretion in declining to accept the stock certificate for his Entera
shares in lieu of a deposit or bond. The court held that under Texas Rule
of Appellate Procedure 24.2(e), that option is available only to judgment
debtors “with a net worth of less than $10 million.” TEX. R. APP. P.
24.2(e)(1).
Kay then filed a mandamus petition in this Court. See TEX. R.
APP. P. 24.4(a). He argues that the court of appeals abused its discretion
by (1) affirming the trial court’s calculation of his net worth, and
(2) holding that alternative security is available only to judgment
debtors with net worths below $10 million.

II.

“Mandamus will issue only if a court has clearly abused its
discretion . . . .” In re Prudential Ins. Co. of Am., 148 S.W.3d 124, 135-
36 (Tex. 2004). The abuse of discretion requirement “is fulfilled where
a trial court acts without reference to guiding rules or principles or in

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an arbitrary or unreasonable manner. In re Garza, 544 S.W.3d 386, 840
(Tex. 2018). An error of law or erroneous application of law to fact is an
abuse of discretion. In re Ill. Nat’l Ins. Co., 685 S.W.3d 826, 835 (Tex.
2024). 7

III.

We first consider the parties’ dispute regarding the valuation of
Kay’s Entera shares and his net worth. To suspend execution of a money
judgment on appeal, a judgment debtor must post security as required
by Sections 52.006 and 52.007 of the Texas Civil Practice and Remedies
Code and Rule 24 of the Texas Rules of Appellate Procedure. The Rules
of Appellate Procedure allow a judgment debtor to supersede a judgment
by (1) filing a good and sufficient bond (or cash equivalent) with the trial
court clerk, or (2) “providing alternate security under Rule 24.2(e) or
ordered by the court.” TEX. R. APP. P. 24.1(a)(2)-(4). For a bond or cash
deposit, the amount of security necessary to supersede a money
judgment must equal the sum of the amount of compensatory damages
and costs awarded in the judgment, as well as interest for the estimated
duration of the appeal. TEX. CIV. PRAC. & REM. CODE § 52.006(a); see
also TEX. R. APP. P. 24.1(b)(1)(A), (c)(2), 24.2(a)(1). But the amount

7 Generally, a mandamus petitioner must also demonstrate the

absence of an adequate remedy by appeal. In re Prudential Ins. Co. of
Am., 148 S.W.3d at 135-36. But a trial court’s post-judgment order on
the amount and type of security is not part of the final judgment and
thus not subject to review on appeal from that judgment. See TEX. R.
APP. P. 24.4. Because Rule 24.4 provides express authorization for this
Court’s review of supersedeas bond orders by petition for writ of
mandamus, no showing of an inadequate appellate remedy is required.

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required must not exceed the lesser of: “(1) 50 percent of the judgment
debtor’s current net worth; or (2) $25 million.” TEX. CIV. PRAC. & REM.
CODE § 52.006(b); see also TEX. R. APP. P. 24.2(a)(1).
Kay contends the trial court’s unreasonably high valuation of his
net worth allowed the court to require a bond of $25 million instead of
the roughly $400,000 in cashier’s checks he deposited. In particular,
Kay emphasizes that buyers for his Entera shares must meet certain
criteria, including access to detailed financial information about Entera
that he is not privileged to disclose. Although Kay points to practical
difficulties in finding a buyer who qualifies for one of the available
exemptions, he concedes the sale of his Entera shares is not “an absolute
impossibility.” Instead, Kay argues that Yosowitz failed to identify a
buyer who meets that qualification aside from the two he already
approached. It is the “judgment debtor,” however, who “has the burden
of proving net worth.” TEX. R. APP. P. 24.2(c)(3).
All parties agree the trial court’s calculation of Kay’s net worth
depended entirely on its credibility determinations as to the value of
Kay’s Entera shares. Each party’s team of experts testified in support
of their respective positions, and the trial court found that Yosowitz’s
team was more credible. Cf. City of Keller v. Wilson, 168 S.W.3d 802,
819 (Tex. 2005) (explaining that the factfinder is “the sole judge[] of the
credibility of the witnesses and the weight to give their testimony” and
that “[r]eviewing courts cannot impose their own opinions to the
contrary”). We may not resolve disputed factual matters in a mandamus
proceeding. In re Angelini, 186 S.W.3d 558, 560 (Tex. 2006). Under

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these circumstances, the trial court did not abuse its discretion in
adopting Yosowitz’s valuation of the Entera shares over Kay’s.

IV.

Having found no basis to set aside the trial court’s finding of Kay’s
net worth, we next determine whether the court of appeals erred in
construing Rules 24.1 and 24.2 of the Rules of Appellate Procedure.
Citing Rule 24.2(e)(1), the court of appeals determined that alternative
security is available only to judgment debtors whose net worth is less
than $10 million. We disagree.
Rule 24.2(e) was added in 2023 to address the availability of
alternative security “in [c]ertain [c]ases.” TEX. R. APP. P. 24.2(e). The
addition followed the Legislature’s enactment of Section 52.007 of the
Civil Practice and Remedies Code, which provides that if “a judgment
debtor with a net worth of less than $10 million” makes a required
showing, “the trial court shall allow the judgment debtor to post
alternative security.” Under Rule 24.2(e), the judge is likewise required
to allow alternative security for such debtors. See TEX. R. APP.
P. 24.2(e)(1)-(2).
But Rule 24.2(e) is not the exclusive authority for alternative
security. Instead, Rule 24.1(a) has long permitted a court to order
alternative security, and this permission was preserved by the 2023
amendments. Rule 24.1(a) now contemplates supersedeas by, among
other things, “providing alternate security under Rule 24.2(e) or ordered
by the court.” TEX. R. APP. P. 24.1(a)(4) (emphasis added). Thus, trial
courts are not limited to the alternative security that Rule 24.2(e)
requires in certain cases; they retain discretion to allow alternative

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security under Rule 24.1(a)(4) for judgment debtors with net worths of
$10 million or more.
We therefore hold the court of appeals erred in concluding that
the alternative-security option was categorically unavailable to Kay.
Mandamus relief is appropriate in these circumstances. See TEX. R. APP.
P. 24.4(a); see also In re Corral-Lerma, 451 S.W.3d 385, 388 (Tex. 2014)
(granting mandamus relief in supersedeas case).
Given the court of appeals’ incorrect conclusion that alternative
security was not an option, that court did not reach the question whether
the trial court abused its discretion in impliedly rejecting Kay’s offer to
tender the Entera stock certificate as alternative security. Because the
parties dispute whether Kay provided sufficient proof of the adequacy of
the stock certificate as alternative security, see TEX. R. APP. P. 24.1(d),
we direct the court of appeals to consider that question in the first
instance. We express no view as to the outcome on remand. But we note
that if a court finds a judgment debtor’s net worth to require a
$25 million supersedeas 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 demonstrates a particular need for different
treatment.

V.

Accordingly, without hearing oral argument, we conditionally
grant mandamus relief and direct the court of appeals to determine
whether the trial court abused its discretion in refusing to accept the
Entera stock certificate as alternative security. See TEX. R. APP.

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P. 52.8(c). We are confident the court of appeals will comply, and our
writ will issue only if it does not.

OPINION DELIVERED: June 13, 2025

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