Preview
Received and E-Filed for Record
2/3/2017 9:15:52 AM
Barbara Gladden Adamick
District Clerk
Montgomery County, Texas
NO. 16-05-05670
IN THE MATTER OF § IN THE DISTRICT COURT
THE MARRIAGE OF §
§
§ 418TH JUDICIAL DISTRICT
THOMAS JEROME PISULA §
AND §
HENNA MUKTAR MALIK § MONTGOMERY COUNTY, TEXAS
TRIAL BRIEF - HUSBAND’S SEPARATE PROPERTY INTERESTS
Table of Contents:
Authorities: Page 1
Facts Supporting Separate Property Claims Page 2
A. Interests Before the Date of Marriage Page 2
Page 1 – Investments Remaining Under Individual Ownership (entities 1-12)
Page 4 – Investment Interests in SDIRA and Mutations (entities 13-25)
Page 10 - Pass-through Entity (entity 26)
B. Activity During the Marriage Page 13
Page 10 - a. Income
Page 11 - b. Tom’s SDIRA (entities 13 and 27)
Page 12 - c. Transfers to the FLP (entities 13 – 24)
Page 13 - d. Roll-up Transaction (entities 27 and 28)
C. Recap list of 12 Consolidated Entities Page 18
D. Additional Separate Property Entities Page 18
Authorities:
1) Inception of Title - The character of property is fixed at the time of claim or acquisition.
Welder v. Lambert, 44 S.W. 281 (Tex. 1898).
2) Separate Property - Property owned or claimed before marriage is separate property. Id.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 1
3) Mutation – The character of separate property will not be altered by the sale, mutation,
exchange or substitution of the property. Gleich v. Bongio, 99 S.W. 881 (Tex. 1937).
4) Distributions of Income or Profits – Distributions of partnership profits or income during the
marriage are community property. Harris v. Harris, 765 S.W.798 (Tex. Civ. App.—Houston
[14th Dist.] 1989, writ denied).
Facts Supporting Separate Property Claims
A. Interests Before the Date of Marriage
Before the date of marriage on 9/17/14 (DOM), Tom had a net worth of over $18M, including a
home, money in the bank, a 50% interest in land in Conroe, and self-directed IRA (SDIRA) and
investment interests in several entities. Portions of two of the investment interests were held
within Tom’s SDIRA. All of the other investment interests were held outside of Tom’s SDIRA.
Tom also owned and still has a family limited partnership, TJ & AB Pisula Properties, LP and its
1% general partner TJ & AB Management GP, LLC (combined referred to as the FLP) – a FLP
formed before the marriage and which received transfers of some of Tom’s SP investment
interests during the marriage.
There were 35 entities that Tom owned prior to marriage that are pertinent to the divorce
property division. Some of those entities also had subsidiary entities, with the effect that
approximately 50 distinct medical office developments and other real estate investments were
owned as Tom’s separate property prior to the marriage.
Each entity described in this Trial Brief is given an entity number for future reference, cited
throughout this Trial Brief:
List of Entities with direct ownership (entities 1-35)
1. TJ & AB Pisula Properties, LP formed on October 9, 2013. (Exhibit P-2, pages
664-706).
2. TJ & AB Management GP, LLC formed on October 7, 2013 (Exhibit P-2, pages
622-663).
3. RRC Medical Real Estate, LLC was formed before marriage.
4. Devil’s Canyon Ranch, LLC was formed before marriage.
5. Courtland Ventures, LLC was formed on before marriage.
6. IYPIB, LLC was formed on before marriage.
7. Kingwood Acquisitions Medical Partners, LLC was formed on 3/21/11 (Exhibit
P-2, pages 72-126).
8. Brazillian Ventures, LP was formed before marriage.
9. Trumbell Center Limited Partnership was formed on before marriage.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 2
10. DIV Charles River Limited Partnership was formed before marriage.
11. DIV Fifty, LLC was formed before marriage.
12. DMP 40/60 Investor, LLC was formed on before marriage.
13. Realty Risk Capital III, LLC was formed on 9/30/11 (Exhibit P-2, page 349-399).
14. Apollo Hospital Systems, LP. Was formed before marriage.
15. FS Conroe, LLC was formed on 7/29/10 (Exhibit P-2, page 1-71).
16. Six Pines Development, LLC was formed on 6/20/12 (Exhibit P-2 2, page 524-
570).
17. Spring Surgical Hospital Partners, LLC. was formed on 3/5/12 (Exhibit P-2, page
571-621).
18. Hurst Hospital Investors, LLC was formed before marriage.
19. Skip and Bud, LLC (Delta 9 investment) was formed before marriage.
20. KPP I, LLC was formed on 3/9/11 (Exhibit P-2, page 127-173).
21. KPP II, LLC was formed on 11/3/12 (Exhibit P-2, page 174-218).
22. 242 Mac III, LLC was formed before marriage (approximately 14 years ago).
23. Realty Risk Capital, LP was formed on 3/22/05. (Exhibit P-2, page 444-477.
24. Realty Risk Capital GP, LLC was formed on 3/23/05. (Exhibit P-2, page 399-403
25. Pinecroft Manager, LLC was formed before marriage.
26. Pinecroft Core Holdings, LLC was formed on 11/13/15 (Exhibit P-8.2).
27. Pinecroft Core Management, LLC was formed on 11/12/15 (Exhibit P-8.20).
28. Cypress Station Properties, LLC was formed before marriage.
29. Risk Realty Capital II, LLC was formed before marriage.
30. Byrne Real Estate Investments, LLC was formed before marriage.
31. Legato Way Partners, LLC was formed before marriage.
32. Pisula Construction Services, LLC was formed before marriage.
33. Pinecroft Partners was formed before marriage.
34. 2920 Med DEV PARTNERS, LLC was formed before marriage.
35. Visionary Health Investment was formed before marriage.
As addressed below, 12 entities were consolidated into a roll-up transaction during the marriage.
List of Consolidated Entities in the Roll-up (12 entities with cross-references)
Each of these 12 consolidated entities was owned in whole or in part by Tom, entities
owned by Tom, Tom’s SDIRA or Tom’s FLP, all of which were Tom’s separate property
and which constituted the sole initial capitalization of Pinecroft Core Holdings, LLC by
Tom, entities owned by Tom, Tom’s SDIRA and Tom’s FLP (Exhibit P-8.4):
1. 242 Mac III, LLC (entity 22)
2. Coppell ED MOB, LLC (originally part of entity 13)
3. DD Medical Development Partners, LLC (originally part of entity 13)
4. Frisco ED MOB, LLC (originally part of entity 13)
5. Harmony ED MOB, LLC (originally part of entity 13)
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 3
6. KPP I, LLC (entity 20)
7. KPP II, LLC (entity 21)
8. Mansfield ED MOB, LLC (originally part of entity 13)
9. Pinecroft Center II, LP (originally part of entity 23)
10. Realty Risk Capital GP, LLC (entity 24)
11. Six Pines at Research Plaza 2, LLC (originally part of entity 16)
12. St. Luke’s Way Partners, LLC (originally part of entity 13)
a. Investments Remaining Under Individual Ownership
On the DOM Tom also owned the following investment interests that remain in his name
individually:
1. TJ & AB Pisula Properties, LP is a family living partnership (“FLP”) formed on October
9, 2013. (Exhibit P-2, pages 664-706). Tom owns 99% as the limited partner. TJ & AB
Management GP, LLC (entity 2) owns 1% as the general partner (Exhibit P-2, page 698).
On the DOM no investment interest entities had been transferred into the FLP.
K-1 for 2013 (Exhibit P-3) - none. No activity.
K-1 for 2014 (Exhibit P-4) to Tom shows 99% interest. Ordinary business income
was -$899,534, net rental real estate income was -$849,139, interest income was
$15,437, net long-term capital gain was $1,091,354, unrecaptured section 1250
gain was $114,264, and section 1231 gain was $2,295,531, all per the K-1
(Exhibit P-4, page 3).
K-1 for 2014 (Exhibit P-4) to TJ & AB Management CP, LLC (entity 2) shows
1% interest and corresponding income, all per the K-1 (Exhibit P-4, page 5).
K-1 for 2015 (Exhibit P-5) to Tom shows 99% interest. Ordinary business income
was -$45,072, net rental real estate income was -$381,971, interest income was
$116, net long-term capital gain was $73,378, unrecaptured section 1250 gain was
$32,496, and section 1231 gain was $950,966, all per the K-1 (Exhibit P-5, page
32).
K-1 for 2015 (Exhibit P-5) to TJ & AB Management CP, LLC (entity 2) shows
1% interest and corresponding income, all per the K-1 (Exhibit P-5, page 34)
2. TJ & AB Management GP, LLC was formed on October 7, 2013 (Exhibit P-2, pages 622-
663). This GP is owned 100% by Tom (Exhibit P-2, page 629 and 663). This GP owns
1% of TJ & AB Pisula Properties, LP.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 4
K-1 for 2013 (Exhibit P-3) - none.
K-1 for 2014 (Exhibit P-4) – none, flow-through from TJ & AB Pisula Properties,
LP (entity 1) only.
K-1 for 2015 (Exhibit P-5) - none, flow-through from TJ & AB Pisula Properties,
LP (entity 1) only.
Tom still owns 100% of the FLP (Exhibit P-4, pages 3 and 5; Exhibit P-5, pages 32 and 34).
3. RRC Medical Real Estate, LLC. was formed on 7/1/07. RRC Medical Real Estate, LLC
is owned 51% by Tom, 24% by Tom’s brother Jim Pisula, 10% by an employee, and 15%
by Tom’s ex-wife. RRC Medical Real Estate, LLC receives income from development,
leasing and property management related to Tom’s investment entities and other
customers. Tom’s 51% interest is shown on the K-1s for 2013, 2014 and 2015, with no
change since.
K-1 for 2013 (Exhibit P-3) shows 51% interest (Exhibit P-3, page 17).
K-1 for 2014 (Exhibit P-4) shows 51% interest. Income for 2014 was $347,072
ordinary income, $6,468 net rental real estate income, $6,767 guaranteed
payments, no net long-term capital gain, and -$5,146 Section 1231 loss, with the
capital account starting at $599,700, current year increase of $201,550, no
withdrawals or distributions and a capital account ending balance of $801,250, all
per the K-1 (Exhibit P-4, page 1).
K-1 for 2015 (Exhibit P-5) shows 51% interest. Income for 2015 was $205,505
ordinary income, -$73,288 net rental real estate loss, $6,422 guaranteed payments,
$1,517 net long-term capital gain, and -$12,477 Section 1231 loss, with the
capital account starting at $801,250, current year increase of $46,719, no
withdrawals or distributions and a capital account ending balance of $847,969, all
per the K-1 (Exhibit P-5, page 24). Tom recalls that all income was distributed.
4. Devil’s Canyon Ranch, LLC was formed before marriage. Tom owned a 36.11% interest
in Devil’s Canyon Ranch, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 36.11% interest (2013 K-1, page 42).
K-1 for 2014 (Exhibit P-4) shows his 36.11% beginning interest and 27.50%
ending interest held by Tom (Exhibit P-4, page 25). Ordinary income was
$38,615. There was no withdrawal or distribution.
K-1 for 2015 (Exhibit P-5) shows his 27.50% interest (Exhibit P-5, page 21).
Ordinary income was -$137,901.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 5
5. Courtland Ventures, LLC was formed on 11/14/10. Tom owned a 50.0% interest in
Courtland Ventures, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 50.0% interest (2013 K-1, page 35).
K-1 for 2014 (Exhibit P-4) shows his 50.0% (Exhibit P-4, page 12). Ordinary
income was -$95,256. There was no withdrawal or distribution.
K-1 for 2015 (Exhibit P-5) shows _________.
6. IYPIB, LLC was formed before marriage. Tom owned a 50.0% interest in IYPIB, LLC
before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 50.0% interest (2013 K-1, page 27).
K-1 for 2014 (Exhibit P-4) shows _________.
K-1 for 2015 (Exhibit P-5) shows _________.
7. Kingwood Acquisitions Medical Partners, LLC was formed on 3/21/11 (Exhibit P-2,
pages 72-126). Tom owned a 7.15% interest in Kingwood Acquisitions Medical
Partners, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 7.15% interest (2013 K-1, page 56).
K-1 for 2014 (Exhibit P-4) shows _________.
K-1 for 2015 (Exhibit P-5) shows _________.
8. Brazillian Ventures, LP was formed before marriage (at least 6 years ago). Tom initially
owned a 2.756% interest in Brazillian Ventures, LP and a 7.15% interest before the
marriage.
K-1 for 2013 (Exhibit P-3) shows his 2.756% interest (2013 K-1, page 1).
K-1 for 2014 (Exhibit P-4) shows _________.
K-1 for 2015 (Exhibit P-5) shows his 2.756% interest (Exhibit P-5, page 4).
Ordinary income was $12,708. There were no distributions.
9. Trumbell Center Limited Partnership was formed before marriage (at least 10+ years
ago). Tom owned a .20692% interest in Trumbell Center Limited Partnership before the
marriage.
K-1 for 2013 (Exhibit P-3) shows his .20692% interest (2013 K-1, page 50).
K-1 for 2014 (Exhibit P-4) shows his .20692% interest (Exhibit P-4, page 15).
There was no ordinary income. There was -$894 net rental real estate income.
There was no distribution.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 6
K-1 for 2015 (Exhibit P-5) shows his .20692% interest (Exhibit P-5, page 7).
There was no ordinary income. There was -$1,114 net rental real estate income.
There was a 43,867 Section 1231 gain. There was no distribution.
10. DIV Charles River Limited Partnership was formed before marriage (at least 10+ years
ago). Tom owned a .09078% interest in DIV Charles River Limited Partnership before
the marriage.
K-1 for 2013 (Exhibit P-3) shows his .09078% interest (2013 K-1, page 48).
K-1 for 2014 (Exhibit P-4) shows his .09078% interest (Exhibit P-4, page 17).
There was no ordinary income. There was $5,719 net rental real estate income.
There was a $3,712 distribution.
K-1 for 2015 (Exhibit P-5) shows his .09078% interest (Exhibit P-5, page 8).
There was no ordinary income. There was -$7,719 net rental real estate income.
There was a $7,136 distribution.
11. DIV Fifty, LLC was formed before marriage (at least 10+ years ago). Tom owned a
.1321102% interest in DIV Fifty, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his .1321102% interest (2013 K-1, page 44).
K-1 for 2014 (Exhibit P-4) shows his .1321102% interest (PDF, page 23). There
was no ordinary income. There was $1,635 net rental real estate income. There
was a $524 distribution.
K-1 for 2015 (Exhibit P-5) shows his .1321102% interest (PDF, page 11). There
was no ordinary income. There was $1,816 net rental real estate income. There
was a $524 distribution.
12. DMP 40/60 Investor, LLC was formed before marriage (at least 10+ years ago). Tom
owned a .223825% interest in DMP 40/60 Investor, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his .223825% interest (2013 K-1, page 46).
K-1 for 2014 (Exhibit P-4) shows his .223825% interest (Exhibit P-4, page 20).
There was no ordinary income. There was $1,823 net rental real estate income.
There was a $2,117 distribution.
K-1 for 2015 (Exhibit P-5) shows his .223825% interest (Exhibit P-5, page 14).
There was no ordinary income. There was $1,915 net rental real estate income.
There was a $1,878 distribution.
b. Investment Interests in SDIRA and Mutations
On the date of marriage Tom owned investment interests in other entities, including two interests
in his Self-Directed IRA (SDIRA) and other investment interests that he later contributed in
whole or in part to his FLP or rolled-up into a new entity. Those interests are:
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 7
13. Realty Risk Capital III, LLC was formed on 9/30/11 (Exhibit P-2, page 349-399). Tom
individually owned a 11.6732% interest in Realty Risk Capital III, LLC before the
marriage. Tom’s SDIRA owned a 3.8911% interest in Realty Risk Capital III, LLC
before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 9.4862% individual interest (2013 K-1, page
14).
K-1 for 2014 (Exhibit P-4) shows his 9.4862% interest held by his FLP (Exhibit
P-4, page 45). There was ordinary income of -$11,275. Net rental real estate
income was -$114,923. There was a distribution of $60,000.
K-1 for 2015 (Exhibit P-5) shows his 10.2766% interest held by his FLP (Exhibit
P-5, page 53). There was ordinary income of $76,697. Net rental real estate
income was -$147,706. There was a Section 1231 gain of $1,032,124. The K-1
shows a withdrawal of $1,248,498 and an ending capital account balance of
$99,080.
Contribution and Admission Agreement 12/11/15 (Exhibit P-8.6) shows
that Tom’s individual interest remained at 10.2766% and Tom’s SDIRA
interest remained at 3.9526%, with other member’s interests being
reduced and Pinecroft Manager, LLC received 19.9729% as a promoted
interest.
A Distribution Agreement dated 12/11/15 (Exhibit P-8.2) shows that
Realty Risk Capital III, LLC’s interests in the following entities was
distributed 10.2767% to Tom’s FLP, 3.9526% to Tom’s SDIRA and
19.9729% to Pinecroft Manager, LLC, with these interests contributed into
the roll-up transaction, see below:
1. Coppell ED MOB, LLC, 100% membership interest
2. DD Medical Development Partners, LLC, 67.2678%
membership interest
3. Frisco ED MOB, LLC, 48.333% membership interest
4. Harmony ED MOB, LLC, 26.2300% membership interest
5. Mansfield ED MOB, LLC, 64.4515% membership interest
6. St. Luke’s Way Partners, LLC, 80.5431% membership interest
The distributed interests in the above 6 investments were rolled-up into
Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an
Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an
Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-
8.5).
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 8
A Contribution and Admission Agreement of Harmony MOB, LLC dated
12/11/15 (Exhibit P-8.8) shows that Realty Risk Capital III, LLC owned a
26.23% interest in Harmony MOB, LLC, and that Realty Risk Capital III,
LLC’s interest remained at 26.23%, with other member’s interests being
reduced and Pinecroft Manager, LLC received 13.2462% as a promoted
interest - the promoted interest was distributed 50% to Tom pursuant to a
Distribution Agreement dated 12/11/5 (Exhibit P-8.18) and rolled-up into
Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an
Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an
Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-
8.5).
A Contribution and Admission Agreement of Frisco ED MOB, LLC dated
12/11/15 (Exhibit P-8.9) shows that Realty Risk Capital III, LLC owned a
48.3333% interest in Frisco ED MOB, LLC, and that Realty Risk Capital
III, LLC’s interest remained at 48.3333%, with other member’s interests
being reduced and Pinecroft Manager, LLC received 7.4817% as a
promoted interest - the promoted interest was distributed 50% to Tom
pursuant to a Distribution Agreement dated 12/11/5 (Exhibit P-8.18) and
rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15
pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and
pursuant to an Amended and Restated Company Agreement dated
12/15/15 (Exhibit P-8.5).
A Contribution and Admission Agreement of Legato Way Partners, LLC
(1 of 2) dated 12/11/15 (Exhibit P-8.10) shows that Realty Risk Capital
III, LLC owned a 36% interest in Legato Way Partners, LLC, and that
Realty Risk Capital III, LLC’s interest decreased to 22.1722%, with other
member’s interests changing also and Pinecroft Manager, LLC received
38.4105% as a promoted interest - the promoted interest was distributed
50% to Tom pursuant to a Distribution Agreement dated 12/11/5 (Exhibit
P-8.18) and rolled-up into Pinecroft Core Holdings, LLC (entity 26) on
12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-
8.4) and pursuant to an Amended and Restated Company Agreement dated
12/15/15 (Exhibit P-8.5).
A Distribution Agreement of 2920 MED DEV PARTNERS, LLC dated
12/11/15 (Exhibit P-8.14) provides that Realty Risk Capital III, LLC
owned a 21.1268% interest in 2920 MED DEV PARTNERS, LLC, which
in turn owned a 32.73% interest in DD Medical Development Partners,
LLC. Realty Risk Capital II, LLC was distributed 21.1268% of the 32.73
interest in DD Medical Development Partners, LLC, which was then
rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 9
pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and
pursuant to an Amended and Restated Company Agreement dated
12/15/15 (Exhibit P-8.5).
A Contribution and Admission Agreement of Legato Way Partners, LLC
(2 of 2) dated 12/11/15 (Exhibit P-8.11) shows that Realty Risk Capital
III, LLC owned a 22.1722% interest in Legato Way Partners, LLC (2 of
2), and that Realty Risk Capital III, LLC’s interest increased to 80.5431%,
with other member’s interests being reduced, in exchange for a cash
contribution by Realty Risk Capital III, LLC in the amount of
$3,063,260.45 (Realty Risk Capital III, LLC used $3M of its cash to buy-
out the other partners of Legato Way that did not want to stay in the
investment).
14. Apollo Hospital Systems, LP. was formed on June __, 2013. Tom owned a 10.7100%
interest in Apollo Hospital Systems, LP before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 10.7100% interest (2013 K-1, page 39).
K-1 for 2014 (Exhibit P-4) shows his 10.7100% interest held by Tom (Exhibit P-
4, page 27). Ordinary income was -$892,649.
K-1 for 2015 (Exhibit P-5) shows his 10.7100% interest held by his FLP (Exhibit
P-5, page 5). Ordinary income was -$404,492.
15. FS Conroe, LLC was formed on 7/29/10 (Exhibit P-2, page 1-71). Tom owned a
15.5355% interest in FS Conroe, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 15.5355% interest (2013 K-1, page 3).
K-1 for 2014 (Exhibit P-4) shows his 15.5355% interest held by his FLP (Exhibit
P-4, page 31). There was no ordinary income. Net rental real estate income was
$21,155.
K-1 for 2015 (Exhibit P-5) shows his 15.5355% interest held by his FLP (Exhibit
P-5, page 36). There was no ordinary income. Net rental real estate income was
$22,301.
16. Six Pines Development, LLC was formed on 6/20/12 (Exhibit P-2 2, page 524-570). Tom
owned a 21.5385% interest in Six Pines Development, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 21.5385% interest (2013 K-1, page 15).
K-1 for 2014 (Exhibit P-4) shows his 21.5385% interest held by his FLP (Exhibit
P-4, page 46). There was no ordinary income. Net rental real estate income was -
$46,635.
K-1 for 2015 (Exhibit P-5) shows his 21.5385% interest held by his FLP (Exhibit
P-5, page 65). There was no ordinary income. Net rental real estate income was -
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 10
$48,381. The K-1 shows a withdrawal of $226,124 and an ending capital account
balance of $166,183.
Distribution Agreement 12/11/15 (Exhibit P-8.15) shows that Six Pines
Development, LLC’s 57.3676% interest in Six Pines at Research Plaza 2,
LLC was distributed to Tom at his 21.5385% ownership interest (schedule
1), so that he received a 12.3561% interest in Six Pines at Research Plaza
2, LLC (21.5385% of the 57.3637% total ownership). Should have
referenced distribution to the FLP.
The distributed interests in Six Pines at Research Plaza 2, LLC were
rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15
pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and
pursuant to an Amended and Restated Company Agreement dated
12/15/15 (Exhibit P-8.5).
Tom’s FLP continues to own the 21.5385% interest Six Pines
Development, LLC.
17. Spring Surgical Hospital Partners, LLC. was formed on 3/5/12 (Exhibit P-2, page 571-
621). Tom owned a 3.2609% interest in Spring Surgical Hospital Partners, LLC before
the marriage.
K-1 for 2013 (Exhibit P-3) shows his 3.2609% starting interest and 2.8548%
ending interest (2013 K-1, page 52).
K-1 for 2014 (Exhibit P-4) shows his 2.8548% interest held by his FLP (Exhibit
P-4, page 48). Ordinary income was -$76. Net rental real estate income was
$6,863. There was a withdrawal of $115,527.
K-1 for 2015 (Exhibit P-5) shows his 2.8548% interest held by his FLP (Exhibit
P-5, page 67). There was no ordinary income. Net rental real estate income was -
$63,790. There was a withdrawal of $8,637.
18. Hurst Hospital Investors, LLC was formed before marriage. Tom owned a 10.8303%
interest in Hurst Hospital Investors, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 10.8303% interest (2013 K-1, page 4).
K-1 for 2014 (Exhibit P-4) shows his 10.8303% beginning interest and his
13.1291% ending interest in held by his FLP (Exhibit P-4, page 36). Ordinary
income was -$2,490. Net rental real estate income was -$20,694. There was a
$269,449 Section 1231 gain. There was a withdrawal of $370,084.
K-1 for 2015 (Exhibit P-5) shows his 13.1291% interest held by his FLP (Exhibit
P-5, page 41). There was ordinary income of $1,375. There was a net long-term
capital gain of $10,087. There was a withdrawal of $7,032.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 11
19. Skip and Bud, LLC (Delta 9 investment) was formed before marriage. Tom owned
approx. 8% interest in Skip and Bud, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows _______.
K-1 for 2014 (Exhibit P-4) shows ______.
K-1 for 2015 (Exhibit P-5) shows ______.
20. KPP I, LLC was formed on 3/9/11 (Exhibit P-2, page 127-173). Tom initially owned a
11.3719% interest in KPP I, LLC initially and a 12.5385% interest before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 12.5385% interest (2013 K-1, page 9).
K-1 for 2014 (Exhibit P-4) shows his 12.5385% interest held by his FLP (Exhibit
P-4, page 43). There was no ordinary income. Net rental real estate income was
$17,054. There was a withdrawal of $18,306.
K-1 for 2015 (Exhibit P-5) shows his 12.5385% interest held by his FLP (Exhibit
P-5, page 72). There was no ordinary income. Net rental real estate income was
$29,246. There was a withdrawal of $18,557 and an ending 0% interest.
Tom’s FLP’s 12.5385% interest in KPP I, LLC was rolled-up into Pinecroft Core
Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of
Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated
Company Agreement dated 12/15/15 (Exhibit P-8.5).
21. KPP II, LLC was formed on 11/3/12 (Exhibit P-2, page 174-218). Tom owned a
16.4271% interest in KPP II, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 16.4271% interest (2013 K-1, page 10).
K-1 for 2014 (Exhibit P-4) shows his 16.4271% interest held by his FLP (Exhibit
P-4, page 44). There was no ordinary income. Net rental real estate income was -
$38,032. There was no withdrawal.
K-1 for 2015 (Exhibit P-5) shows _______.
A Contribution and Admission Agreement 12/11/15 (Exhibit P-8.7) shows that
Tom’s individual interest remained at 16.4271%, with other member’s interests
being reduced and Pinecroft Manager, LLC received 4.9788% as a promoted
interest.
Tom’s FLP’s 16.4271% interest in KPP II, LLC was rolled-up into Pinecroft Core
Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of
Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated
Company Agreement dated 12/15/15 (Exhibit P-8.5).
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 12
22. 242 Mac III, LLC was formed before marriage (approximately 14 years ago). Tom
owned a 14.15% interest in 242 Mac III, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 14.15% interest (2013 K-1, page 32).
K-1 for 2014 (Exhibit P-4) shows his _________.
K-1 for 2015 (Exhibit P-5) shows his 14.15% interest held by his FLP (Exhibit P-
5, page 69). There was no ordinary income. Net rental real estate income was
$9,979. There was a withdrawal of $8,515 and an ending 0% interest.
Tom’s FLP’s 14.15% interest in 242 Mac III, LLC was rolled-up into Pinecroft
Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of
Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated
Company Agreement dated 12/15/15 (Exhibit P-8.5).
23. Realty Risk Capital, LP was formed on 3/22/05. (Exhibit P-2, page 444-477). Tom
owned a 55.8606% interest in Realty Risk Capital, LP initially and a 26.50 interest just
before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 26.50% interest (2013 K-1, page 31).
K-1 for 2014 (Exhibit P-4) shows his _________.
K-1 for 2015 (Exhibit P-5) shows his 26.50% interest held by his FLP (Exhibit P-
5, page 81). There was no ordinary income. Net rental real estate income was
$9,827. There was a withdrawal of $6,095 and an ending 0% interest.
Distribution Agreement 12/11/15 (Exhibit P-8.16) shows that Realty Risk Capital,
LP’s 14% % interest in Pinecroft Center II, LP was distributed to Tom at his 26%
ownership interest (schedule 1), so that he received a 3.64% interest in Pinecroft
Center II, L (26% of the 14% total ownership). Should have referenced
distribution to the FLP.
The distributed interests in Pinecroft Center II, LP were rolled-up into Pinecroft
Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of
Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated
Company Agreement dated 12/15/15 (Exhibit P-8.5).
Tom’s FLP continues to own the 21.5385% interest Realty Risk Capital, LP.
24. Realty Risk Capital GP, LLC was formed on 3/23/05. (Exhibit P-2, page 399-403). Tom
owned a 50% interest in Realty Risk Capital GP, LLC before the marriage.
K-1 for 2013 (Exhibit P-3) shows his 50% interest (2013 K-1, page 38).
K-1 for 2014 (Exhibit P-4) shows _________.
In the Matter of the Marriage of Pisula and Malik
Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 13
K-1 for 2015 (Exhibit P-5) shows his 50% interest held by his FLP (Exhibit P-5,
page 77). There was no ordinary income. Net rental real estate income was
$1,347. There was no withdrawal and an ending 0% interest.
See Roll-up transaction.
c. Pass-through Entity
Tom also owned a pass-through entity before the DOM:
25. Pinecroft Manager, LLC was formed before marriage. Tom owned a 51% interest in
Pinecroft Manager, LLC before the marriage. Tom’s brother, Jim Pisula, owns the other
49%. Pinecroft Manager, LLC is the Manager for Realty Risk Capital III, LLC.
Pinecroft Manager, LLC was entitled to receive and has received promote interests on
investment interests from before the DOM.
K-1 for 2013 (Exhibit P-3) - none no income.
K-1 for 2014 (Exhibit P-4) - none no income.
K-1 for 2015 (Exhibit P-5) - none no income.
A Distribution Agreement for HSRE-Pisula III, LLC dated 12/11/15 (Exhibit P-8.12)
provides that Legato Way Partners, LLC owns 100% of HSRE-Pisula III, LLC and that
HSRE-Pisula III, LLC is distributing its 100% interest in St. Luke’s Way Partners, LLC
to Legato Way Partners, LLC.
A Distribution Agreement for Legato Way Partners, LLC dated 12/__/15 (Exhibit P-8.13)
provides that Pinecroft Manager, LLC owns 9.6026% in Legato Way Partners, LLC, and
that Legato Way Partners, LLC is distributing its 100% ownership interest in St. Luke’s
Way Partners, LLC with a 9.06025% in
Preview
Received and E-Filed for Record 2/3/2017 9:15:52 AM Barbara Gladden Adamick District Clerk Montgomery County, Texas NO. 16-05-05670 IN THE MATTER OF § IN THE DISTRICT COURT THE MARRIAGE OF § § § 418TH JUDICIAL DISTRICT THOMAS JEROME PISULA § AND § HENNA MUKTAR MALIK § MONTGOMERY COUNTY, TEXAS TRIAL BRIEF - HUSBAND’S SEPARATE PROPERTY INTERESTS Table of Contents: Authorities: Page 1 Facts Supporting Separate Property Claims Page 2 A. Interests Before the Date of Marriage Page 2 Page 1 – Investments Remaining Under Individual Ownership (entities 1-12) Page 4 – Investment Interests in SDIRA and Mutations (entities 13-25) Page 10 - Pass-through Entity (entity 26) B. Activity During the Marriage Page 13 Page 10 - a. Income Page 11 - b. Tom’s SDIRA (entities 13 and 27) Page 12 - c. Transfers to the FLP (entities 13 – 24) Page 13 - d. Roll-up Transaction (entities 27 and 28) C. Recap list of 12 Consolidated Entities Page 18 D. Additional Separate Property Entities Page 18 Authorities: 1) Inception of Title - The character of property is fixed at the time of claim or acquisition. Welder v. Lambert, 44 S.W. 281 (Tex. 1898). 2) Separate Property - Property owned or claimed before marriage is separate property. Id. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 1 3) Mutation – The character of separate property will not be altered by the sale, mutation, exchange or substitution of the property. Gleich v. Bongio, 99 S.W. 881 (Tex. 1937). 4) Distributions of Income or Profits – Distributions of partnership profits or income during the marriage are community property. Harris v. Harris, 765 S.W.798 (Tex. Civ. App.—Houston [14th Dist.] 1989, writ denied). Facts Supporting Separate Property Claims A. Interests Before the Date of Marriage Before the date of marriage on 9/17/14 (DOM), Tom had a net worth of over $18M, including a home, money in the bank, a 50% interest in land in Conroe, and self-directed IRA (SDIRA) and investment interests in several entities. Portions of two of the investment interests were held within Tom’s SDIRA. All of the other investment interests were held outside of Tom’s SDIRA. Tom also owned and still has a family limited partnership, TJ & AB Pisula Properties, LP and its 1% general partner TJ & AB Management GP, LLC (combined referred to as the FLP) – a FLP formed before the marriage and which received transfers of some of Tom’s SP investment interests during the marriage. There were 35 entities that Tom owned prior to marriage that are pertinent to the divorce property division. Some of those entities also had subsidiary entities, with the effect that approximately 50 distinct medical office developments and other real estate investments were owned as Tom’s separate property prior to the marriage. Each entity described in this Trial Brief is given an entity number for future reference, cited throughout this Trial Brief: List of Entities with direct ownership (entities 1-35) 1. TJ & AB Pisula Properties, LP formed on October 9, 2013. (Exhibit P-2, pages 664-706). 2. TJ & AB Management GP, LLC formed on October 7, 2013 (Exhibit P-2, pages 622-663). 3. RRC Medical Real Estate, LLC was formed before marriage. 4. Devil’s Canyon Ranch, LLC was formed before marriage. 5. Courtland Ventures, LLC was formed on before marriage. 6. IYPIB, LLC was formed on before marriage. 7. Kingwood Acquisitions Medical Partners, LLC was formed on 3/21/11 (Exhibit P-2, pages 72-126). 8. Brazillian Ventures, LP was formed before marriage. 9. Trumbell Center Limited Partnership was formed on before marriage. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 2 10. DIV Charles River Limited Partnership was formed before marriage. 11. DIV Fifty, LLC was formed before marriage. 12. DMP 40/60 Investor, LLC was formed on before marriage. 13. Realty Risk Capital III, LLC was formed on 9/30/11 (Exhibit P-2, page 349-399). 14. Apollo Hospital Systems, LP. Was formed before marriage. 15. FS Conroe, LLC was formed on 7/29/10 (Exhibit P-2, page 1-71). 16. Six Pines Development, LLC was formed on 6/20/12 (Exhibit P-2 2, page 524- 570). 17. Spring Surgical Hospital Partners, LLC. was formed on 3/5/12 (Exhibit P-2, page 571-621). 18. Hurst Hospital Investors, LLC was formed before marriage. 19. Skip and Bud, LLC (Delta 9 investment) was formed before marriage. 20. KPP I, LLC was formed on 3/9/11 (Exhibit P-2, page 127-173). 21. KPP II, LLC was formed on 11/3/12 (Exhibit P-2, page 174-218). 22. 242 Mac III, LLC was formed before marriage (approximately 14 years ago). 23. Realty Risk Capital, LP was formed on 3/22/05. (Exhibit P-2, page 444-477. 24. Realty Risk Capital GP, LLC was formed on 3/23/05. (Exhibit P-2, page 399-403 25. Pinecroft Manager, LLC was formed before marriage. 26. Pinecroft Core Holdings, LLC was formed on 11/13/15 (Exhibit P-8.2). 27. Pinecroft Core Management, LLC was formed on 11/12/15 (Exhibit P-8.20). 28. Cypress Station Properties, LLC was formed before marriage. 29. Risk Realty Capital II, LLC was formed before marriage. 30. Byrne Real Estate Investments, LLC was formed before marriage. 31. Legato Way Partners, LLC was formed before marriage. 32. Pisula Construction Services, LLC was formed before marriage. 33. Pinecroft Partners was formed before marriage. 34. 2920 Med DEV PARTNERS, LLC was formed before marriage. 35. Visionary Health Investment was formed before marriage. As addressed below, 12 entities were consolidated into a roll-up transaction during the marriage. List of Consolidated Entities in the Roll-up (12 entities with cross-references) Each of these 12 consolidated entities was owned in whole or in part by Tom, entities owned by Tom, Tom’s SDIRA or Tom’s FLP, all of which were Tom’s separate property and which constituted the sole initial capitalization of Pinecroft Core Holdings, LLC by Tom, entities owned by Tom, Tom’s SDIRA and Tom’s FLP (Exhibit P-8.4): 1. 242 Mac III, LLC (entity 22) 2. Coppell ED MOB, LLC (originally part of entity 13) 3. DD Medical Development Partners, LLC (originally part of entity 13) 4. Frisco ED MOB, LLC (originally part of entity 13) 5. Harmony ED MOB, LLC (originally part of entity 13) In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 3 6. KPP I, LLC (entity 20) 7. KPP II, LLC (entity 21) 8. Mansfield ED MOB, LLC (originally part of entity 13) 9. Pinecroft Center II, LP (originally part of entity 23) 10. Realty Risk Capital GP, LLC (entity 24) 11. Six Pines at Research Plaza 2, LLC (originally part of entity 16) 12. St. Luke’s Way Partners, LLC (originally part of entity 13) a. Investments Remaining Under Individual Ownership On the DOM Tom also owned the following investment interests that remain in his name individually: 1. TJ & AB Pisula Properties, LP is a family living partnership (“FLP”) formed on October 9, 2013. (Exhibit P-2, pages 664-706). Tom owns 99% as the limited partner. TJ & AB Management GP, LLC (entity 2) owns 1% as the general partner (Exhibit P-2, page 698). On the DOM no investment interest entities had been transferred into the FLP. K-1 for 2013 (Exhibit P-3) - none. No activity. K-1 for 2014 (Exhibit P-4) to Tom shows 99% interest. Ordinary business income was -$899,534, net rental real estate income was -$849,139, interest income was $15,437, net long-term capital gain was $1,091,354, unrecaptured section 1250 gain was $114,264, and section 1231 gain was $2,295,531, all per the K-1 (Exhibit P-4, page 3). K-1 for 2014 (Exhibit P-4) to TJ & AB Management CP, LLC (entity 2) shows 1% interest and corresponding income, all per the K-1 (Exhibit P-4, page 5). K-1 for 2015 (Exhibit P-5) to Tom shows 99% interest. Ordinary business income was -$45,072, net rental real estate income was -$381,971, interest income was $116, net long-term capital gain was $73,378, unrecaptured section 1250 gain was $32,496, and section 1231 gain was $950,966, all per the K-1 (Exhibit P-5, page 32). K-1 for 2015 (Exhibit P-5) to TJ & AB Management CP, LLC (entity 2) shows 1% interest and corresponding income, all per the K-1 (Exhibit P-5, page 34) 2. TJ & AB Management GP, LLC was formed on October 7, 2013 (Exhibit P-2, pages 622- 663). This GP is owned 100% by Tom (Exhibit P-2, page 629 and 663). This GP owns 1% of TJ & AB Pisula Properties, LP. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 4 K-1 for 2013 (Exhibit P-3) - none. K-1 for 2014 (Exhibit P-4) – none, flow-through from TJ & AB Pisula Properties, LP (entity 1) only. K-1 for 2015 (Exhibit P-5) - none, flow-through from TJ & AB Pisula Properties, LP (entity 1) only. Tom still owns 100% of the FLP (Exhibit P-4, pages 3 and 5; Exhibit P-5, pages 32 and 34). 3. RRC Medical Real Estate, LLC. was formed on 7/1/07. RRC Medical Real Estate, LLC is owned 51% by Tom, 24% by Tom’s brother Jim Pisula, 10% by an employee, and 15% by Tom’s ex-wife. RRC Medical Real Estate, LLC receives income from development, leasing and property management related to Tom’s investment entities and other customers. Tom’s 51% interest is shown on the K-1s for 2013, 2014 and 2015, with no change since. K-1 for 2013 (Exhibit P-3) shows 51% interest (Exhibit P-3, page 17). K-1 for 2014 (Exhibit P-4) shows 51% interest. Income for 2014 was $347,072 ordinary income, $6,468 net rental real estate income, $6,767 guaranteed payments, no net long-term capital gain, and -$5,146 Section 1231 loss, with the capital account starting at $599,700, current year increase of $201,550, no withdrawals or distributions and a capital account ending balance of $801,250, all per the K-1 (Exhibit P-4, page 1). K-1 for 2015 (Exhibit P-5) shows 51% interest. Income for 2015 was $205,505 ordinary income, -$73,288 net rental real estate loss, $6,422 guaranteed payments, $1,517 net long-term capital gain, and -$12,477 Section 1231 loss, with the capital account starting at $801,250, current year increase of $46,719, no withdrawals or distributions and a capital account ending balance of $847,969, all per the K-1 (Exhibit P-5, page 24). Tom recalls that all income was distributed. 4. Devil’s Canyon Ranch, LLC was formed before marriage. Tom owned a 36.11% interest in Devil’s Canyon Ranch, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 36.11% interest (2013 K-1, page 42). K-1 for 2014 (Exhibit P-4) shows his 36.11% beginning interest and 27.50% ending interest held by Tom (Exhibit P-4, page 25). Ordinary income was $38,615. There was no withdrawal or distribution. K-1 for 2015 (Exhibit P-5) shows his 27.50% interest (Exhibit P-5, page 21). Ordinary income was -$137,901. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 5 5. Courtland Ventures, LLC was formed on 11/14/10. Tom owned a 50.0% interest in Courtland Ventures, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 50.0% interest (2013 K-1, page 35). K-1 for 2014 (Exhibit P-4) shows his 50.0% (Exhibit P-4, page 12). Ordinary income was -$95,256. There was no withdrawal or distribution. K-1 for 2015 (Exhibit P-5) shows _________. 6. IYPIB, LLC was formed before marriage. Tom owned a 50.0% interest in IYPIB, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 50.0% interest (2013 K-1, page 27). K-1 for 2014 (Exhibit P-4) shows _________. K-1 for 2015 (Exhibit P-5) shows _________. 7. Kingwood Acquisitions Medical Partners, LLC was formed on 3/21/11 (Exhibit P-2, pages 72-126). Tom owned a 7.15% interest in Kingwood Acquisitions Medical Partners, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 7.15% interest (2013 K-1, page 56). K-1 for 2014 (Exhibit P-4) shows _________. K-1 for 2015 (Exhibit P-5) shows _________. 8. Brazillian Ventures, LP was formed before marriage (at least 6 years ago). Tom initially owned a 2.756% interest in Brazillian Ventures, LP and a 7.15% interest before the marriage. K-1 for 2013 (Exhibit P-3) shows his 2.756% interest (2013 K-1, page 1). K-1 for 2014 (Exhibit P-4) shows _________. K-1 for 2015 (Exhibit P-5) shows his 2.756% interest (Exhibit P-5, page 4). Ordinary income was $12,708. There were no distributions. 9. Trumbell Center Limited Partnership was formed before marriage (at least 10+ years ago). Tom owned a .20692% interest in Trumbell Center Limited Partnership before the marriage. K-1 for 2013 (Exhibit P-3) shows his .20692% interest (2013 K-1, page 50). K-1 for 2014 (Exhibit P-4) shows his .20692% interest (Exhibit P-4, page 15). There was no ordinary income. There was -$894 net rental real estate income. There was no distribution. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 6 K-1 for 2015 (Exhibit P-5) shows his .20692% interest (Exhibit P-5, page 7). There was no ordinary income. There was -$1,114 net rental real estate income. There was a 43,867 Section 1231 gain. There was no distribution. 10. DIV Charles River Limited Partnership was formed before marriage (at least 10+ years ago). Tom owned a .09078% interest in DIV Charles River Limited Partnership before the marriage. K-1 for 2013 (Exhibit P-3) shows his .09078% interest (2013 K-1, page 48). K-1 for 2014 (Exhibit P-4) shows his .09078% interest (Exhibit P-4, page 17). There was no ordinary income. There was $5,719 net rental real estate income. There was a $3,712 distribution. K-1 for 2015 (Exhibit P-5) shows his .09078% interest (Exhibit P-5, page 8). There was no ordinary income. There was -$7,719 net rental real estate income. There was a $7,136 distribution. 11. DIV Fifty, LLC was formed before marriage (at least 10+ years ago). Tom owned a .1321102% interest in DIV Fifty, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his .1321102% interest (2013 K-1, page 44). K-1 for 2014 (Exhibit P-4) shows his .1321102% interest (PDF, page 23). There was no ordinary income. There was $1,635 net rental real estate income. There was a $524 distribution. K-1 for 2015 (Exhibit P-5) shows his .1321102% interest (PDF, page 11). There was no ordinary income. There was $1,816 net rental real estate income. There was a $524 distribution. 12. DMP 40/60 Investor, LLC was formed before marriage (at least 10+ years ago). Tom owned a .223825% interest in DMP 40/60 Investor, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his .223825% interest (2013 K-1, page 46). K-1 for 2014 (Exhibit P-4) shows his .223825% interest (Exhibit P-4, page 20). There was no ordinary income. There was $1,823 net rental real estate income. There was a $2,117 distribution. K-1 for 2015 (Exhibit P-5) shows his .223825% interest (Exhibit P-5, page 14). There was no ordinary income. There was $1,915 net rental real estate income. There was a $1,878 distribution. b. Investment Interests in SDIRA and Mutations On the date of marriage Tom owned investment interests in other entities, including two interests in his Self-Directed IRA (SDIRA) and other investment interests that he later contributed in whole or in part to his FLP or rolled-up into a new entity. Those interests are: In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 7 13. Realty Risk Capital III, LLC was formed on 9/30/11 (Exhibit P-2, page 349-399). Tom individually owned a 11.6732% interest in Realty Risk Capital III, LLC before the marriage. Tom’s SDIRA owned a 3.8911% interest in Realty Risk Capital III, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 9.4862% individual interest (2013 K-1, page 14). K-1 for 2014 (Exhibit P-4) shows his 9.4862% interest held by his FLP (Exhibit P-4, page 45). There was ordinary income of -$11,275. Net rental real estate income was -$114,923. There was a distribution of $60,000. K-1 for 2015 (Exhibit P-5) shows his 10.2766% interest held by his FLP (Exhibit P-5, page 53). There was ordinary income of $76,697. Net rental real estate income was -$147,706. There was a Section 1231 gain of $1,032,124. The K-1 shows a withdrawal of $1,248,498 and an ending capital account balance of $99,080. Contribution and Admission Agreement 12/11/15 (Exhibit P-8.6) shows that Tom’s individual interest remained at 10.2766% and Tom’s SDIRA interest remained at 3.9526%, with other member’s interests being reduced and Pinecroft Manager, LLC received 19.9729% as a promoted interest. A Distribution Agreement dated 12/11/15 (Exhibit P-8.2) shows that Realty Risk Capital III, LLC’s interests in the following entities was distributed 10.2767% to Tom’s FLP, 3.9526% to Tom’s SDIRA and 19.9729% to Pinecroft Manager, LLC, with these interests contributed into the roll-up transaction, see below: 1. Coppell ED MOB, LLC, 100% membership interest 2. DD Medical Development Partners, LLC, 67.2678% membership interest 3. Frisco ED MOB, LLC, 48.333% membership interest 4. Harmony ED MOB, LLC, 26.2300% membership interest 5. Mansfield ED MOB, LLC, 64.4515% membership interest 6. St. Luke’s Way Partners, LLC, 80.5431% membership interest The distributed interests in the above 6 investments were rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P- 8.5). In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 8 A Contribution and Admission Agreement of Harmony MOB, LLC dated 12/11/15 (Exhibit P-8.8) shows that Realty Risk Capital III, LLC owned a 26.23% interest in Harmony MOB, LLC, and that Realty Risk Capital III, LLC’s interest remained at 26.23%, with other member’s interests being reduced and Pinecroft Manager, LLC received 13.2462% as a promoted interest - the promoted interest was distributed 50% to Tom pursuant to a Distribution Agreement dated 12/11/5 (Exhibit P-8.18) and rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P- 8.5). A Contribution and Admission Agreement of Frisco ED MOB, LLC dated 12/11/15 (Exhibit P-8.9) shows that Realty Risk Capital III, LLC owned a 48.3333% interest in Frisco ED MOB, LLC, and that Realty Risk Capital III, LLC’s interest remained at 48.3333%, with other member’s interests being reduced and Pinecroft Manager, LLC received 7.4817% as a promoted interest - the promoted interest was distributed 50% to Tom pursuant to a Distribution Agreement dated 12/11/5 (Exhibit P-8.18) and rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). A Contribution and Admission Agreement of Legato Way Partners, LLC (1 of 2) dated 12/11/15 (Exhibit P-8.10) shows that Realty Risk Capital III, LLC owned a 36% interest in Legato Way Partners, LLC, and that Realty Risk Capital III, LLC’s interest decreased to 22.1722%, with other member’s interests changing also and Pinecroft Manager, LLC received 38.4105% as a promoted interest - the promoted interest was distributed 50% to Tom pursuant to a Distribution Agreement dated 12/11/5 (Exhibit P-8.18) and rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P- 8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). A Distribution Agreement of 2920 MED DEV PARTNERS, LLC dated 12/11/15 (Exhibit P-8.14) provides that Realty Risk Capital III, LLC owned a 21.1268% interest in 2920 MED DEV PARTNERS, LLC, which in turn owned a 32.73% interest in DD Medical Development Partners, LLC. Realty Risk Capital II, LLC was distributed 21.1268% of the 32.73 interest in DD Medical Development Partners, LLC, which was then rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 9 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). A Contribution and Admission Agreement of Legato Way Partners, LLC (2 of 2) dated 12/11/15 (Exhibit P-8.11) shows that Realty Risk Capital III, LLC owned a 22.1722% interest in Legato Way Partners, LLC (2 of 2), and that Realty Risk Capital III, LLC’s interest increased to 80.5431%, with other member’s interests being reduced, in exchange for a cash contribution by Realty Risk Capital III, LLC in the amount of $3,063,260.45 (Realty Risk Capital III, LLC used $3M of its cash to buy- out the other partners of Legato Way that did not want to stay in the investment). 14. Apollo Hospital Systems, LP. was formed on June __, 2013. Tom owned a 10.7100% interest in Apollo Hospital Systems, LP before the marriage. K-1 for 2013 (Exhibit P-3) shows his 10.7100% interest (2013 K-1, page 39). K-1 for 2014 (Exhibit P-4) shows his 10.7100% interest held by Tom (Exhibit P- 4, page 27). Ordinary income was -$892,649. K-1 for 2015 (Exhibit P-5) shows his 10.7100% interest held by his FLP (Exhibit P-5, page 5). Ordinary income was -$404,492. 15. FS Conroe, LLC was formed on 7/29/10 (Exhibit P-2, page 1-71). Tom owned a 15.5355% interest in FS Conroe, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 15.5355% interest (2013 K-1, page 3). K-1 for 2014 (Exhibit P-4) shows his 15.5355% interest held by his FLP (Exhibit P-4, page 31). There was no ordinary income. Net rental real estate income was $21,155. K-1 for 2015 (Exhibit P-5) shows his 15.5355% interest held by his FLP (Exhibit P-5, page 36). There was no ordinary income. Net rental real estate income was $22,301. 16. Six Pines Development, LLC was formed on 6/20/12 (Exhibit P-2 2, page 524-570). Tom owned a 21.5385% interest in Six Pines Development, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 21.5385% interest (2013 K-1, page 15). K-1 for 2014 (Exhibit P-4) shows his 21.5385% interest held by his FLP (Exhibit P-4, page 46). There was no ordinary income. Net rental real estate income was - $46,635. K-1 for 2015 (Exhibit P-5) shows his 21.5385% interest held by his FLP (Exhibit P-5, page 65). There was no ordinary income. Net rental real estate income was - In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 10 $48,381. The K-1 shows a withdrawal of $226,124 and an ending capital account balance of $166,183. Distribution Agreement 12/11/15 (Exhibit P-8.15) shows that Six Pines Development, LLC’s 57.3676% interest in Six Pines at Research Plaza 2, LLC was distributed to Tom at his 21.5385% ownership interest (schedule 1), so that he received a 12.3561% interest in Six Pines at Research Plaza 2, LLC (21.5385% of the 57.3637% total ownership). Should have referenced distribution to the FLP. The distributed interests in Six Pines at Research Plaza 2, LLC were rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). Tom’s FLP continues to own the 21.5385% interest Six Pines Development, LLC. 17. Spring Surgical Hospital Partners, LLC. was formed on 3/5/12 (Exhibit P-2, page 571- 621). Tom owned a 3.2609% interest in Spring Surgical Hospital Partners, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 3.2609% starting interest and 2.8548% ending interest (2013 K-1, page 52). K-1 for 2014 (Exhibit P-4) shows his 2.8548% interest held by his FLP (Exhibit P-4, page 48). Ordinary income was -$76. Net rental real estate income was $6,863. There was a withdrawal of $115,527. K-1 for 2015 (Exhibit P-5) shows his 2.8548% interest held by his FLP (Exhibit P-5, page 67). There was no ordinary income. Net rental real estate income was - $63,790. There was a withdrawal of $8,637. 18. Hurst Hospital Investors, LLC was formed before marriage. Tom owned a 10.8303% interest in Hurst Hospital Investors, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 10.8303% interest (2013 K-1, page 4). K-1 for 2014 (Exhibit P-4) shows his 10.8303% beginning interest and his 13.1291% ending interest in held by his FLP (Exhibit P-4, page 36). Ordinary income was -$2,490. Net rental real estate income was -$20,694. There was a $269,449 Section 1231 gain. There was a withdrawal of $370,084. K-1 for 2015 (Exhibit P-5) shows his 13.1291% interest held by his FLP (Exhibit P-5, page 41). There was ordinary income of $1,375. There was a net long-term capital gain of $10,087. There was a withdrawal of $7,032. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 11 19. Skip and Bud, LLC (Delta 9 investment) was formed before marriage. Tom owned approx. 8% interest in Skip and Bud, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows _______. K-1 for 2014 (Exhibit P-4) shows ______. K-1 for 2015 (Exhibit P-5) shows ______. 20. KPP I, LLC was formed on 3/9/11 (Exhibit P-2, page 127-173). Tom initially owned a 11.3719% interest in KPP I, LLC initially and a 12.5385% interest before the marriage. K-1 for 2013 (Exhibit P-3) shows his 12.5385% interest (2013 K-1, page 9). K-1 for 2014 (Exhibit P-4) shows his 12.5385% interest held by his FLP (Exhibit P-4, page 43). There was no ordinary income. Net rental real estate income was $17,054. There was a withdrawal of $18,306. K-1 for 2015 (Exhibit P-5) shows his 12.5385% interest held by his FLP (Exhibit P-5, page 72). There was no ordinary income. Net rental real estate income was $29,246. There was a withdrawal of $18,557 and an ending 0% interest. Tom’s FLP’s 12.5385% interest in KPP I, LLC was rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). 21. KPP II, LLC was formed on 11/3/12 (Exhibit P-2, page 174-218). Tom owned a 16.4271% interest in KPP II, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 16.4271% interest (2013 K-1, page 10). K-1 for 2014 (Exhibit P-4) shows his 16.4271% interest held by his FLP (Exhibit P-4, page 44). There was no ordinary income. Net rental real estate income was - $38,032. There was no withdrawal. K-1 for 2015 (Exhibit P-5) shows _______. A Contribution and Admission Agreement 12/11/15 (Exhibit P-8.7) shows that Tom’s individual interest remained at 16.4271%, with other member’s interests being reduced and Pinecroft Manager, LLC received 4.9788% as a promoted interest. Tom’s FLP’s 16.4271% interest in KPP II, LLC was rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 12 22. 242 Mac III, LLC was formed before marriage (approximately 14 years ago). Tom owned a 14.15% interest in 242 Mac III, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 14.15% interest (2013 K-1, page 32). K-1 for 2014 (Exhibit P-4) shows his _________. K-1 for 2015 (Exhibit P-5) shows his 14.15% interest held by his FLP (Exhibit P- 5, page 69). There was no ordinary income. Net rental real estate income was $9,979. There was a withdrawal of $8,515 and an ending 0% interest. Tom’s FLP’s 14.15% interest in 242 Mac III, LLC was rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). 23. Realty Risk Capital, LP was formed on 3/22/05. (Exhibit P-2, page 444-477). Tom owned a 55.8606% interest in Realty Risk Capital, LP initially and a 26.50 interest just before the marriage. K-1 for 2013 (Exhibit P-3) shows his 26.50% interest (2013 K-1, page 31). K-1 for 2014 (Exhibit P-4) shows his _________. K-1 for 2015 (Exhibit P-5) shows his 26.50% interest held by his FLP (Exhibit P- 5, page 81). There was no ordinary income. Net rental real estate income was $9,827. There was a withdrawal of $6,095 and an ending 0% interest. Distribution Agreement 12/11/15 (Exhibit P-8.16) shows that Realty Risk Capital, LP’s 14% % interest in Pinecroft Center II, LP was distributed to Tom at his 26% ownership interest (schedule 1), so that he received a 3.64% interest in Pinecroft Center II, L (26% of the 14% total ownership). Should have referenced distribution to the FLP. The distributed interests in Pinecroft Center II, LP were rolled-up into Pinecroft Core Holdings, LLC (entity 26) on 12/1/15 pursuant to an Agreement and Plan of Reorganization (Exhibit P-8.4) and pursuant to an Amended and Restated Company Agreement dated 12/15/15 (Exhibit P-8.5). Tom’s FLP continues to own the 21.5385% interest Realty Risk Capital, LP. 24. Realty Risk Capital GP, LLC was formed on 3/23/05. (Exhibit P-2, page 399-403). Tom owned a 50% interest in Realty Risk Capital GP, LLC before the marriage. K-1 for 2013 (Exhibit P-3) shows his 50% interest (2013 K-1, page 38). K-1 for 2014 (Exhibit P-4) shows _________. In the Matter of the Marriage of Pisula and Malik Petitioner’s Trial Brief – Husband’s Separate Property Interests Page 13 K-1 for 2015 (Exhibit P-5) shows his 50% interest held by his FLP (Exhibit P-5, page 77). There was no ordinary income. Net rental real estate income was $1,347. There was no withdrawal and an ending 0% interest. See Roll-up transaction. c. Pass-through Entity Tom also owned a pass-through entity before the DOM: 25. Pinecroft Manager, LLC was formed before marriage. Tom owned a 51% interest in Pinecroft Manager, LLC before the marriage. Tom’s brother, Jim Pisula, owns the other 49%. Pinecroft Manager, LLC is the Manager for Realty Risk Capital III, LLC. Pinecroft Manager, LLC was entitled to receive and has received promote interests on investment interests from before the DOM. K-1 for 2013 (Exhibit P-3) - none no income. K-1 for 2014 (Exhibit P-4) - none no income. K-1 for 2015 (Exhibit P-5) - none no income. A Distribution Agreement for HSRE-Pisula III, LLC dated 12/11/15 (Exhibit P-8.12) provides that Legato Way Partners, LLC owns 100% of HSRE-Pisula III, LLC and that HSRE-Pisula III, LLC is distributing its 100% interest in St. Luke’s Way Partners, LLC to Legato Way Partners, LLC. A Distribution Agreement for Legato Way Partners, LLC dated 12/__/15 (Exhibit P-8.13) provides that Pinecroft Manager, LLC owns 9.6026% in Legato Way Partners, LLC, and that Legato Way Partners, LLC is distributing its 100% ownership interest in St. Luke’s Way Partners, LLC with a 9.06025% in