Turning One Legal Order Debit Into a Playbook for Other Owners
TM
This is the story of how one “legal order debit” on a Wells Fargo business account in Texas turned into a full‑blown court case, regulatory complaints, and a practical playbook other small‑business owners can use when their bank account is suddenly frozen or emptied. It starts with a merchant cash advance, runs through a defective New York judgment, and ends with Wells Fargo seizing funds from a confirmed Chapter 11 debtor‑in‑possession account and triggering a chain reaction that put an entire reorganization plan at risk.
How the Wells Fargo Seizure Actually Happened
AR Construction LLC had a confirmed Subchapter V Chapter 11 plan in 2025, and the Wells Fargo account ending in 8262 was the designated debtor‑in‑possession (DIP) account for plan payments, insurance, and operating expenses. In October 2025, Monday Funding LLC obtained a default judgment in New York for about 30,898 dollars, based on a merchant cash advance agreement originally made with BroncBuster LLC, not with AR Construction LLC.
Service in that New York case was never actually completed: certified mail was refused, went unclaimed, and was returned, even though the affidavit of service claimed it had been delivered and accepted. The New York judgment was never domesticated in any Texas court under the Uniform Enforcement of Foreign Judgments Act before Wells Fargo acted on it.
On November 4–5, 2025, Wells Fargo froze the Texas DIP account and removed about 32,379 dollars through “legal order debits,” exceeding the face amount of the New York judgment and immediately driving the account balance to zero. That seizure wiped out funds earmarked for a December 10 plan payment of roughly 6,146 dollars and set off a cascade of plan defaults, insurance lapses, and repossession and foreclosure risks.
What the Lawsuit Against Wells Fargo Says
In December 2025, a lawsuit was filed in the 466th District Court in Comal County, Texas, laying out why the seizure is alleged to be unlawful and what relief is being requested. The petition claims, among other things, that:
The New York judgment is void from the start because there was no valid service and therefore no personal jurisdiction.
Even if it were valid, it was never domesticated in Texas, so it could not support a Texas‑based garnishment or bank levy against a Texas account.
Wells Fargo violated Texas Finance Code 59.201 by seizing funds without mandatory advance written notice to the account holder.
The creditor had no perfected security interest under the UCC because there was no UCC‑1 filing or deposit account control agreement in Texas.
The seizure interfered with a confirmed Chapter 11 plan and a protected DIP account, contrary to 11 U.S.C. 1141 and the bankruptcy court’s confirmation order.
The petition also alleges unfair and deceptive practices under the Texas Deceptive Trade Practices Act, breach of the deposit account agreement, negligence and gross negligence, and asks for return of the funds, statutory penalties, consequential damages, and exemplary damages based on a claimed pattern of willful disregard for state and federal law.
What Wells Fargo’s Own Papers and Policies Show
Parallel to the lawsuit, regulatory complaints were filed with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC), attaching the Wells Fargo Business Deposit Account Agreement and the bank’s written responses. Those documents highlight several key points:
The account agreement says Wells Fargo “may accept and act on any legal process we believe to be valid regardless of how and where it is served,” while also saying all terms are subject to, and void to the extent they conflict with, applicable law in the state where the account is located.
In a November 24, 2025 email, outside counsel for Wells Fargo stated the bank “takes no stance” on the propriety of the judgment or garnishment and simply complies with the New York restraint, even as it controls a Texas DIP account.
In a November 26, 2025 letter, Wells Fargo acknowledged the account and customer were in Texas, but said it had reviewed exemptions under New York law and might withdraw money again in response to the same legal order.
The CFPB complaint packages that together into a systemic policy argument—that Wells Fargo’s “any legal process we believe to be valid” language, its no‑notice approach, and its “no stance” admission create a structure where the bank has an incentive to act aggressively on out‑of‑state legal orders while doing little to verify domestication, notice, or bankruptcy protections.
How the Monday Funding MCA Fits In
At the root of the New York judgment is a July 2025 Standard Merchant Cash Advance Agreement between Monday Funding LLC and BroncBuster LLC. The document is framed as a “sale of future receivables,” with Monday Funding purchasing a 30,000 dollar “Receivables Purchased Amount” for a 20,000 dollar purchase price, netting 18,000 dollars in funds delivered to the merchant after fees.
The contract includes:
Daily ACH debits based on an “Estimated Payment” of 500 dollars tied to an estimated 21.5 percent of future receipts.
A dense fee stack, including origination, compliance, NSF, blocked/stop‑payment, default, and UCC filing fees, plus a 5,000 dollar default fee or 25 percent of the outstanding purchased amount if there is a default.
A broad security interest in all accounts and receivables and strong default protections, including the right to debit any merchant account and proceed to litigation or arbitration.
In practice, that MCA—made to BroncBuster—became the basis for a New York case that named multiple parties, including AR Construction, and resulted in a default judgment that was later used to hit AR’s Texas DIP account at Wells Fargo. The “sale of receivables” label on the MCA and the “any legal process we believe to be valid” clause in the Wells Fargo agreement ended up intersecting in a way that put a reorganized Texas debtor’s core operating account in the crosshairs of a distant court order.
Why Tell This Story Publicly
This story is not just about one account freeze; it is about showing other owners what can happen when high‑cost merchant cash advances, out‑of‑state default judgments, and national bank policies collide with local law and active bankruptcy protections. By publishing the timeline, filings, and regulatory complaints, the goal is to create a concrete example others can point to when they ask hard questions about domestication, notice, DIP accounts, and a bank’s duty to verify legal process before draining a small‑business account.
If any part of your situation sounds familiar—MCA contracts out of New York, surprise legal order debits on a local account, or a bank saying it “takes no stance” on the legality of a judgment—you can use this case as a reference point when you talk with your own lawyer or regulators.