Texas Halo J4T Affiliate Fund, LLC Texas Halo J4T Management, LLC Victor Elgohary And Victor Elgohary Derivatively on Behalf of Texas Halo Fund I, LLC Texas Halo J4T Affiliate Fund, LLC Texas Halo J4T Closed Fund, LLC And Texas Halo J4T v. David Steakley Andrew Clark William Wheelock Robert Tucci Travis County, Texas Houston Angel Network, Inc. Chris Winkler N. Jane Pierce Jim Lawnin Aruna Viswanathan David Lee Robert Lary Paul Pryzant Jamie Rhodes Robert Hemker

• Court: Court of Appeals of Texas
• Decided: May 31, 2016
• Docket: 03-16-00230-CV
• Status: Published

Opinion

ACCEPTED 03-16-00230-CV 10897417 THIRD COURT OF APPEALS AUSTIN, TEXAS 5/31/2016 3:31:15 PM JEFFREY D. KYLE CLERK NO. 03-16-00230-CV

IN THE COURT OF APPEALS FILED IN 3rd COURT OF APPEALS FOR THE THIRD DISTRICT OF TEXAS AUSTIN, TEXAS AT AUSTIN 5/31/2016 3:31:15 PM ___________________________________________________________ JEFFREY D. KYLE Clerk TEXAS HALO J4T MANAGEMENT, LLC, ET AL. Appellant, vs. DAVID STEAKLEY, ET AL Appellees. ___________________________________________________________

On Appeal from the 98th Judicial District Court, Travis County, Texas Trial Court Cause No. D-1-GN-15-004109 ___________________________________________________________

HALO FUND MANAGER APPELLEES’ OPPOSITION TO APPELLANT’S “NOTICE OF INTENT TO DISMISS” ___________________________________________________________

REAGAN D. PRATT State Bar No. 00788218 Pratt & Flack, LLP 1331 Lamar, Suite 1250 Houston, Texas 77010 Telephone: (713) 936-2402 Facsimile: (713) 481-0231

Attorneys for Appellees David Steakley, Andrew Clark, William Wheelock, and Robert Tucci Appellees David Steakley, Andrew Clark, William Wheelock, and Robert

Tucci (the “Halo Fund Managers”) ask the Court to not dismiss this appeal until

Appellant has had an opportunity to consider the waiver offered herein.

Background Facts Appellant Victor Elgohary is a serial pro se litigant who happens to be an

attorney. He has filed at least 15 lawsuits on his own behalf over the last few

years. This is at least the fourth time that Elgohary has personally sued someone

for allegedly defaming him, and at least the third time that he has asserted personal

claims against a non-profit corporation while purporting to bring the suit

derivatively on behalf of the non-profit. Two of his prior defamation suits were,

just like this one, against former co-workers who allegedly questioned his

competence and professionalism. Despite sanctions and attorneys’ fees awards

issued against him in prior suits, Elgohary continues to abuse the courts with

vindictive litigation.

This time, Elgohary purported to sue on behalf of Houston Angel Network,

Inc. (“HAN”),1 a non-profit, volunteer-run corporation; an affiliated entity, Texas

Halo Fund I, LLC (“Halo Fund”), and two of Halo Fund’s subsidiaries. He

claimed to have authority to act for those entities even though he had held no office

with HAN since it declined to renew his officer position in January 2014, and he

1 HAN has recently changed its name to “The Houston Texas Angel Network, Inc.”

2 was removed from any roles with the Halo Fund entities—by the unanimous vote

of all those voting—in April 2015. He filed this suit in retribution for that firing,

naming as defendants all 14 of the real directors and managers of those entities.

The Appellants identified above as the Halo Fund Managers are the real

Halo Fund managers, who had successfully sought Elgohary’s removal from the

board of managers.

Elgohary also purported to sue derivatively on behalf of the Halo entities,

based on the fact that he is one of 67 members of the Halo Fund.

The Trial Court Judgment The Defendants challenged Elgohary’s suit with a Rule 12 motion to show

authority, plea to the jurisdiction and motion to dismiss. After an evidentiary

hearing, the trial court granted the Defendants’ motions. The court ordered that

Elgohary could not appear as an attorney in this cause, and that his pleadings

should be stricken. The court expressly found that Elgohary lacked standing to sue

derivatively on behalf of any of the purported plaintiff entities “because he cannot

fairly and adequately represent the interests of any of those entities in a derivative

lawsuit,” and because he did not make an adequate written demand to the entities

before filing the suit. See Exhibit A.

3 Elgohary’s “Notice of Intent to Dismiss” On May 13, 2016, the clerk of this court wrote to Elghoary about his failure

to pay for the clerk’s record that he had asked the district clerk to prepare. The

clerk notified Elgohary that his failure to make payment arrangements might result

in the dismissal of his appeal.

Elgohary responded on May 18, advising the Court that he no longer wished

to pursue this appeal because “Appellants” have refiled certain claims in Harris

County District Court, and “have also made a new derivative demand upon certain

Appellees.” By “Appellants,” Elgohary apparently means himself, personally.

The Halo Fund Managers Waive Reliance on Elgohary’s Failure to Make Demand Elgohary apparently believes that by dismissing this appeal he can avoid the

collateral estoppel effect of the trial court’s finding that “he cannot fairly and

adequately represent the interests of any of [the subject] entities in a derivative

lawsuit.” By making a “new derivative demand,” he apparently believes that he

can re-litigate the issue of his suitability as a derivative plaintiff, in a new venue.

Elgohary’s understanding of the law of collateral estoppel in incorrect. To

avoid any doubt, however, the Halo Fund Managers hereby waive any argument in

this appeal that the trial court’s order as to Elghohary’s lack of standing to bring a

derivative action against them can be sustained solely on his failure to make an

adequate written demand. The Halo Fund Managers stipulate, for the purpose of

4 this appeal, that the trial court’s order as to Elghohary’s lack of standing to bring

derivative claims against them should be affirmed only on the basis that Elgohary

cannot fairly and adequately represent the interests of any of the subject entities in

a derivative lawsuit.

Request for Elgohary to Have an Opportunity to Respond In light of this waiver and stipulation, the Halo Fund Managers ask the court

to give Elgohary a further opportunity to decide whether he wants to continue this

appeal, or dismiss it.

Respectfully Submitted,

PRATT & FLACK LLP

By: /s/ Reagan D. Pratt Reagan D. Pratt State Bar No. 00788218 4306 Yoakum Blvd., Suite 500 Houston, Texas 77006 Telephone: (713) 936-2402 Facsimile: (713) 481-0231 Email: rpratt@prattflack.com

Attorney for Appellees, David Steakley, et al.

5 CERTIFICATE OF SERVICE I hereby certify that I caused a true and correct copy of the foregoing to be served on the following counsel of record on this the 27th day of May, 2016.

Victor S. Elgohary 6406 Arcadia Bend Court Houston. TX 77041 Telephone: 281-858-0014 Email: victor@velgohary.com

Mitchell D. Savrick David A. Buono II The Overlook at Gaines Ranch 4330 Gaines Ranch Loop, #150 Austin TX 78735 Email: mitchell@ssjmlaw.com Email: david@ssjmlaw.com

Thomas A. Zabel Zabel Freeman 1135 Heights Boulevard Houston, TX 77008 Email: tzabel@zflaw.com

/s/ Reagan D. Pratt Reagan D. Pratt

6 Filed in The District Court of Travis County, Texas

JAN 13 2016 CAUSE NO. D-1-GN-15-004109 At ~~ 'L/f AM. Velva L. Price, District 'clerk TEXAS HALO J4T MANAGEMENT, § IN THE DISTRICT COURT OF LLC, ct al. § § w. § TRAVIS COUNTY, TEXAS § HOUSTON ANGEL NETWORK, INC., § ctd. § 98TH JUDICIAL DISTRICT

ORDER ON DEFENDANTS' MOTIONS TO SHOW AUTHORJTY, PLEAS TO THE JURJSDICTION, and MOTIONS TO DISMISS

On this day came to be heard the Defendants' Motions to Show Authority, Pleas to the

Jurisdiction and Motions to Dismiss.

The Court finds that Victor Elgohary has not sustained his burden of proving that he has

been authorized, by any of the entities named as plaintiffs in this cause, to file suit on behalf of

those entities. Therefore, pursuant to Rule 12 ofthe Texas Rules of Civil Procedure, it is

ORDERED that Victor Elghohary may not appear as attorney in this cause. It is further

ORDERED that the pleadings filed by Victor Elgohary in this cause be STRJCKEN.

In addition and alternatively, the Comt finds that Victor Elghohary lacks standing to

bring any of the claims described in his pleadings. Among other things, Elgohary lacks standing

(either individually or derivatively) to assert claims on behalf of any of the entities for which he

purports to sue (Texas Halo J4T Management, LLC, Texas Halo J4T Affiliate Fund, LLC, Texas

Halo Fund I, LLC, and Houston Angel Network, Inc.) because he lacks authority to act on behalf

of those entities; because he has no individual standing to assert claims for damages allegedly

done to those entities; because he cannot fairly and adequately represent the interests of any of

those entities in a derivative lawsuit, due to his personal claims against the entities for damages

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and attorneys' fees; because he did not make an adequate written demand to the entities before

filing this purported derivative suit; and, with respect to two of those entities, because those

entities never bought or sold the securities which are the subject to their purported claims.

Accordingly, the Defendants' Pleas to the Jurisdiction and Motions to Dismiss are

GRANTED. It is therefore

ORDERED that all claims of all purported plaintiffs are DISMISSED for lack of subject

matter jurisdiction.

This is a final judgment, disposing of all parties and all claims. Any and all relief sought

in this case and not granted herein is denied.

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