USA – TEXAS Trends and Developments Contributed by: Soren Lindstrom, Pierson Ferdinand LLP
because disputes may pivot from “the sale was unfair” to “the economics were misapplied.” Enforcing buy-sell options and awarding specific performance: Crain v Northern (2026 Tex. Bus. 4) Buy-sell clauses are a common “deadlock resolver” in closely held companies and JV structures and often the last line of defence before litigation. In Crain v Northern , the Texas Business Court enforced a man - datory buy-sell option after the offeror delivered the required notice and the offeree failed to respond, ulti - mately awarding specific performance and attorneys’ fees. Drafting takeaways include the following. • Practitioners should treat notice mechanics as “hard” provisions. If a buy-sell clause is meant to be self-executing, it should be drafted that way (clear timelines, clear consequences for non- response). • If specific performance is important (and it usually is), practitioners should make the remedy explicit and ensure it is harmonised with any arbitration clause. • In deals with equal partners, buy-sell clauses can be the “real exit”. Practitioners should negotiate these provisions like they would a sale agreement, not as an afterthought. Fraud claims in a securities purchase agreement and limitations defences: Riverside Strategic Capital Fund I v CLG Investments (2025 Tex. Bus. 35) Post-closing litigation in private acquisitions and growth investments often turns on fraud allegations in or around the SPA. In Riverside, the Texas Business Court addressed limitations accrual, the discovery rule, and fraudulent concealment principles in a fraud case arising from a securities purchase agreement. Drafting and diligence takeaways include the follow - ing. • Practitioners should be realistic about how quickly a buyer/investor could “discover” an alleged mis - representation. The timing of red flags and post- closing disclosures can become determinative.
• Practitioners should not treat limitations and survival provisions as boilerplate but instead align them with the business risk (especially compliance- heavy industries). • Representations about regulatory compliance are frequent flashpoints; these should be backed with diligence memos that document what was known and when. “Internal affairs” framing for fraud inducing entry into an LLC agreement: Chaudhry v Stillwater Capital Investments (2025 Tex. Bus. 31) This opinion is useful because it addresses how claims, such as fraud inducing a party to enter a com - pany agreement, can be characterised as disputes regarding an entity’s internal affairs or governing documents for jurisdictional and procedural purposes. This matters for deal counsel because many M&A dis - putes are re-litigated as “governance disputes” rather than “contract disputes” to reach (or avoid) particular forums or remedies. How a claim is framed can drive where it lands and what tools are available. Arbitration stays and deal-document coherence: Tall v Vanderhoef (2025 Tex. Bus. 15) Arbitration provisions are common in private M&A and management equity arrangements, but disputes frequently involve mixed parties and mixed claims. In Tall , the Business Court granted a stay pending arbi - tration while addressing a motion to dismiss certain claims. The drafting takeaway is as follows. • If practitioners want disputes consolidated in one forum, they should ensure the arbitration clause and the forum-selection clause are coherent across the equity documents, employment agreements, and ancillary instruments. What This Texas Case Law Means for M&A Drafting and Deal Process Across these decisions, a few practical themes emerge, as set out below. • Texas courts (and now the Texas Business Court) take negotiated governance seriously. Where par -
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