USA – TEXAS Trends and Developments Contributed by: Soren Lindstrom, Pierson Ferdinand LLP
books-and-records access, and allowing governance documents to shape procedural rights. Key themes (in deal-friendly terms) include: • more certainty for directors and officers when mak - ing strategic decisions (including M&A decisions) through a stronger, codified business judgment framework; • higher hurdles for derivative litigation and more flexibility for governance documents to limit “who can sue” and under what conditions; and • greater ability to shape forum and procedure (including items like jury waivers and internal-gov - ernance tailoring), which boards often prefer when they want predictable dispute outcomes. Delaware’s historical advantage has been a blend of (i) corporate-friendly statutes and (ii) deep, specialised case law through the Court of Chancery. Texas is now clearly trying to replicate that formula with statutory reforms and specialised business court infrastructure. The Texas Business Court: Why it Matters for M&A The Texas Business Court is not just another venue. It is designed to handle complex commercial disputes, including governance fights and high-dollar contract disputes that often follow acquisitions, recapitalisa - tions, and joint ventures (JVs). The court is also quickly building a library of written opinions, which is how a new business court begins to create predictability. What to watch structurally: jurisdiction, removal, and early gatekeeping From a deal-risk standpoint, one of the most immediate impacts is how the Texas Business Court approaches jurisdictional thresholds and case-management tools. Several early opinions focus on whether a case quali - fies as a “qualified transaction,” when an action “aris - es out of” such a transaction, and how to measure the amount in controversy, issues that matter because they determine whether the Texas Business Court is available at all. The Court has also used Rule 166 (g) (a procedure for narrowing legal issues) in ways that can materi - ally change leverage in business disputes, which is important in M&A litigation where parties often try to
turn every disagreement into a sprawling fraud and fiduciary-duty case. Recent M&A-adjacent case law: the “deal drafting” lessons Below are several Texas Business Court decisions that, while not always “merger agreement disputes” in the classic public-company sense, are highly rel - evant to private M&A and sponsor deals because they address the same pressure points: drag-along rights, buy-sell mechanisms, fraud in investment agreements, arbitration stays, and the enforceability of negotiated governance constraints. Drag-along rights and “contracted-for fiduciary limits”: Primexx Energy Opportunity Fund v Primexx Energy Corp. (2025 Tex. Bus. 9) This is one of the most important early Texas Business Court opinions for private-equity style structures. The case arose from a drag-along sale after a private-equi - ty investment in a limited partnership, where minor - ity owners challenged the exit process and alleged breaches of duty and contract. The Court’s framing is deal-lawyer practical: drag- along rights are designed to let a majority force an exit, and sophisticated parties often negotiate protections up front. The opinion emphasises Texas’ freedom-of- contract approach, while also recognising that certain statutory duties cannot be eliminated entirely even if they can be limited to the “greatest extent permitted by law.” Drafting takeaways for M&A/sponsor deals include the following. • If the deal model contemplates a forced exit, prac - titioners should spell out the drag-along mechan - ics and the standard of conduct explicitly (ie, who decides, what process is required, what notice is required). • Practitioners should assume that “fairness” argu - ments will arise later. The more the acquisition agreement makes clear that discretion was bar - gained for, the better the position will be. • Practitioners should consider including clear allo - cation language for proceeds and sidecar assets,
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