Tex. Business Organizations Code § 21.4161 — TX Code / Code bo / Chapter 21 / Section 21.4161
§ 21.4161. DETERMINATION OF INDEPENDENT AND DISINTERESTED DIRECTORS.
Status: in_force

(a) A corporation that adopts a resolution to authorize the formation of a committee of independent and disinterested directors under Section 21.416(g) may petition a court having jurisdiction to hold an evidentiary hearing to determine whether the directors appointed to the committee are independent and disinterested with respect to any transactions involving the corporation or any of its subsidiaries and a controlling shareholder, director, or officer.

(b) A petition under Subsection (a) shall be filed in the business court unless the corporation's principal place of business in this state is located in a county not contained within an operating division of the business court, in which case the petition may be filed in a district court in the county in which the corporation's principal place of business in this state is located.

(c) In the petition, the corporation shall designate legal counsel to act on behalf of the corporation and its shareholders, other than the controlling shareholder, director, or officer involved in the transaction.

(d) The corporation shall give notice to the corporation's shareholders that:

(1) a petition has been filed under this section;

(2) identifies the court in which the petition is filed and provides the case number for the proceeding;

(3) identifies counsel designated to act on behalf of the corporation and its shareholders, other than the controlling shareholder, director, or officer involved in the transaction; and

(4) the shareholders, other than the controlling shareholder, director, or officer involved in the transaction, have the right to participate in the proceeding in person or through counsel.

(e) If the corporation has a class of its shares listed on a national securities exchange, the notice required by Subsection (d) may be provided through the filing of a current report with the United States Securities and Exchange Commission in accordance with the requirements of the Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), and any rules promulgated under that Act.

(f) Not earlier than the 10th day after the date the notice required under Subsection (d) is given, the court shall hold a preliminary hearing to determine the appropriate legal counsel to represent the corporation and its shareholders, other than the controlling shareholder, director, or officer involved in the transaction, whether or not the same as the legal counsel identified in the petition. Any other legal counsel representing a shareholder, other than the controlling shareholder, director, or officer involved in the transaction, may participate in the hearing to:

(1) object to counsel designated by the corporation in the petition on the ground that the designated counsel is insufficiently independent and disinterested; or

(2) request designation by the court as the appropriate legal counsel.

(g) After the court determines the appropriate legal counsel under Subsection (f), the court shall promptly hold an evidentiary hearing as to whether the directors on the committee are independent and disinterested with respect to transactions involving the corporation or any of its subsidiaries and a controlling shareholder, director, or officer. The appropriate legal counsel determined under Subsection (f) and legal counsel for the corporation may participate in the hearing. After hearing and reviewing the evidence presented, the court shall make its determination as to whether the directors on the committee are independent and disinterested.

(h) The court's determination that the directors are independent and disinterested under Subsection (g) shall be dispositive in the absence of facts, not presented to the court, constituting evidence sufficient to prove that one or more of those directors is not independent and disinterested with respect to a particular transaction involving the corporation or any of its subsidiaries and a controlling shareholder, director, or officer.