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Annual Meeting of the State Bar of Texas: Business Law Section CLE - Co-sponsored by the Corporate Counsel Section
This is a compilation of the CLE materials from the Annual Meeting of the State Bar as presented by the Business Law Section. Please click on the link to download the materials that are available.
Lessons Learned in Joint Venture Relationships
A joint venture is a collaboration between two or more entities, created to achieve a single purpose. Broadly, joint ventures can be separated into two categories, equity or contractual. In an equity joint venture, the joint venturers form a separate legal entity that they collectively own and operate. On the other hand, in a contractual joint venture, no separate legal entity is established. Given the high possibility for uncertainty surrounding the formation and operation of joint ventures, disputes are commonplace. Recent case law from across the United States provides glimpses into common areas of dispute among joint venturers. By examining some of these cases and analyzing them under Texas law, we can identify and solve issues that arise in all phases of the joint venture relationship. Understanding potential points of contention will allow the drafter to, among other things, ensure proper formation of the joint venture and properly define the scope and purpose of the joint venture.
Joint Venture Critical Issues: Formation, Governance, Competition and Exits
This paper, prepared for the UT Law CLE 10th Annual Mergers and Acquisitions Institute in Dallas on October 16, 2014, contains information to consider in structuring, negotiating, executing and exiting a joint venture. Guidance is provided regarding choosing the form of joint venture entity and drafting documents for its governance, operations and eventual termination. Critical provisions of preliminary and definitive documents for joint ventures are provided. Included is a discussion of the Energy Transfer Partners, L.P. vs. Enterprise Product Partners, L.P. case in which a $535 million judgment was entered against a partner which left a venture to enter into another before definitive documents were signed, and notwithstanding preliminary agreements which said that no party was bound until definitive documents were signed, because of the conduct of the parties led to a finding that a partnership had been formed. Attached is a brochure for this Mergers and Acquisitions Institute, which includes nationally recognized experts in M&A.
Joint Venture Critical Issues: Formation, Governance, Competition and Exits
The joint venture is a vehicle for the development of a business opportunity by two or more entities acting together,1 and will exist if the parties have: (1) a community of interest in the venture, (2) an agreement to share profits; (3) an agreement to share losses, and (4) a mutual right of control or management of the venture.2 A joint venture may be structured as a corporation, partnership, limited liability company (“LLC”), trust, contractual arrangement, or any combination of such entities and arrangements.3 Structure decisions for a particular joint venture will be driven by the venturers’ tax situation, accounting goals, business objectives and financial needs, as well as the venturers’ planned capital and other contributions to the venture, and antitrust and other regulatory considerations.4 Irrespective of the structure chosen, however, certain elements are typically considered in connection with structuring every joint venture.