Key points
- The governing documents control most disputes: buy-sell provisions, transfer restrictions, management rights, deadlock and dispute resolution.
- Partners owe each other statutory duties of loyalty and care (Tex. Bus. Orgs. Code §§ 152.204–152.206). LLC duties may be expanded, restricted or defined in the company agreement.
- Owners generally have statutory rights to inspect books and records, often the first step in uncovering misconduct.
- Since Ritchie v. Rupe (Tex. 2014), minority shareholders rely on contract, fiduciary duty, derivative and statutory remedies rather than a common-law oppression claim.
Disputes we handle
- Business divorce: negotiated separations, buyouts and dissolutions (see our article, Business Divorce);
- Breach of fiduciary duty: self-dealing, usurping business opportunities, diverting funds, and competing with the company;
- Freeze-outs and expulsions: removal from management, withheld distributions and dilution;
- Deadlock between equal owners that paralyzes the business;
- Buy-sell and valuation disputes over the price of an owner’s interest;
- Books-and-records demands and accounting claims; and
- Derivative claims on behalf of the company against managers or controlling owners.
The law by entity type
| Entity | Key governing law | Notes |
|---|---|---|
| General and limited partnerships | Bus. Orgs. Code ch. 152–154 | Statutory duties of loyalty and care. Partnership agreements can define but not eliminate them. |
| LLCs | Bus. Orgs. Code ch. 101 | Duties and rights are largely governed by the company agreement, which may expand or restrict duties within statutory limits. |
| Corporations | Bus. Orgs. Code ch. 21 | Officer and director duties. Shareholder agreements, derivative suits and inspection rights. |
Locked out of the books, or watching your partner move money?
A records demand, a temporary injunction, or in serious cases a receivership can stop the bleeding. Book a discovery call or call (346) 363-0334.
Paths to resolution
Negotiated separation
Most business divorces end in a negotiated buyout or division of assets. We prepare the valuation evidence, model tax and debt consequences, and negotiate releases, non-competes and transition terms that let everyone move on.
Enforcing the governing documents
Buy-sell provisions, drag-along and tag-along rights, capital call terms and dispute resolution clauses can provide a contractual exit. We enforce them, or challenge their misuse.
Litigation and arbitration
When negotiation fails, we pursue or defend claims for breach of fiduciary duty, breach of contract, fraud, accounting, and declaratory relief. In appropriate cases we seek temporary injunctions or the appointment of a receiver under the Business Organizations Code.
Real estate partnerships
Many of our ownership disputes involve property-holding entities and investor groups. Our real estate litigation practice lets us address title, partition and lender issues alongside the ownership dispute. See also partition lawsuits for co-owned property held outside an entity.