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November 1, 2015Texas Journal of Business Law

Volume 46, Issue 2 (Fall, 2015)

The entire issue, all in one file.

November 1, 201506477000

Dissident Director Who Harms Corporation to Further Personal Objectives Violates Duty of Loyalty

Directors owe fiduciary duties to a corporation on whose Board of Directors (“Board”) they serve and effectively to all of its stockholders. The fiduciary duty of loyalty dictates that directors act in good faith and not allow their personal interests to prevail over those of the corporation. Thus, a director may not use confidential company information, or disclose it to third parties, for personal gain without authorization from his fellow directors. This principle is often memorialized in corporate policies

November 1, 2013George Parker Young, Vincent P. Circelli, Kelli L. Walter

Fiduciary Duties and Minority Shareholder Oppression From the Defense Perspective: Differing Approaches in Texas, Delaware, and Nevada

Suits by minority shareholders in Texas are on the rise and represent an expanding,cutting-edge area of civil litigation in this state and across the country. While the TexasSupreme Court and several appellate courts in Texas have yet to recognize a cause of actionfor shareholder oppression or to define its parameters, a growing number of courts have upheldclaims for shareholder oppression or at least recognized it as a viable claim. But these courts’justifications for recognizing a broad shareholder oppression claim are questionable, becausethey rely on: (1) a Texas Supreme Court case that never blessed shareholder oppression as avalid claim; (2) a Texas receivership statute that allows relief from oppression only in limitedand extreme circumstances; and (3) a Texas appellate court case that relied on the previous twofaulty grounds and on inapplicable case law from other jurisdictions. The Texas SupremeCourt recently granted review to a shareholder oppression case (Ritchie v. Rupe), and willconfront this issue in the very near future. Argument was heard on February 26, 2013.

March 1, 2013Robert Arthur

Limited Liability Company Law – Whether a Manager of a Manager-Managed Limited Liability Company Breached Fiduciary Duties Under Delaware Law to the Limited Liability Company and Its Members

Gatz Props., LLC v. Auriga Capital Corp., 59 A.3d 1206 (Del. 2012)

May 1, 2020Elizabeth S. Miller

Overview of Fiduciary Duties, Exculpation, and Indemnification in Texas Business Organizations

Statutory developments beginning in the 1990s have impacted the analysis of fiduciary duties in the Texas business organizations context. The duties of general partners are now defined by statutory provisions that delineate the duties without referring to them as “fiduciary” duties and specifically provide that partners shall not be held to the standard of a trustee. Whether limited partners in a limited partnership have fiduciary duties is not well-settled, but the Texas Business Organizations Code (BOC) clarifies that a limited partner does not owe the duties of a general partner solely by reason of being a limited partner. While the fiduciary duties of directors are still principally defined by common law, various provisions of the corporate statutes are relevant to the application of fiduciary-duty concepts in the corporate context. Because limited liability companies (LLCs) are a relatively recent phenomenon and the Texas LLC statutes do not specify duties of managers and members, there is some uncertainty with regard to the duties in this area, but the LLC statutes allude to or imply the existence of duties, and managers in a manager-managed LLC and members in a member-managed LLC should expect to be held to fiduciary duties similar to the duties of corporate directors or general partners. In each type of entity, the governing documents may vary (at least to some extent) the duties and liabilities of managerial or governing persons. The power to define duties, eliminate liability, and provide for indemnification is addressed somewhat differently in the statutes governing the various forms of business entities.