No.!03'13'00081'CV

IN#THE#COURT#OF#APPEALS

FOR#THE#THIRD#DISTRICT#OF#TEXAS

AT#AUSTIN,#TEXAS

TWENTY#FIRST#CENTURY#HOLDINGS, INC. D/B/A#AMERICAN#GEOTHERMAL#

SYSTEMS, INC., VICTOR#DEMARCO, AND#N. WEST#SHORT

V.

PRECISION#GEOTHERMAL#DRILLING, L.L.C.

FROM#THE#COUNTY#COURT#AT#LAW#NO. 2 OF#TRAVIS#COUNTY,

NO. C<1<CV<12<12503, HONORABLE#ERIC#SHEPPERD, JUDGE#PRESIDING

APPELLANT’S#MOTION#FOR#REHEARING

LEAD!COUNSEL:

WEST!SHORT!&!ASSOCIATES,!P.C.

N.!West!Short

State!Bar!No.!00788407

313!West!10th!Street

Georgetown,!Texas!78626

512.864.3911

512.864.3966!(Fax)

west.short@westshortlawfirm.com

ATTORNEYS#FOR#APPELLANTS

ORAL#ARGUMENT#REQUESTED

ACCEPTED

03-13-00081-CV

5163833

THIRD COURT OF APPEALS

AUSTIN, TEXAS

5/5/2015 4:38:36 PM

JEFFREY D. KYLE

CLERK

 FILED IN 3rd COURT OF APPEALS AUSTIN, TEXAS 5/5/2015 4:38:36 PM JEFFREY D. KYLE Clerk
1

ISSUES%PRESENTED

I. Because! the! issue! of! unfairness! has! not! been! fully! litigated! or!

adjudicated,!the!September!2012!Settlement!Agreement is!a!valid!

and! enforceable! agreement.! Thus,! the Court! cannot! unilaterally!

declare! the! September! 2012! Settlement! Agreement unfair! and!

treat! it! as! void by! failing! to! enforce! it. Texas! Business!

Organization!Code section!101.255!only!gives!the!company!or!the!

company’s! members! a! cause! of! action! against! the! “interested!

governing! person”! if! the! company! or! the! company’s! members!

believe! a! contract! is! not! fair.! Section! 101.255! does! not!

automatically! void! an! unfair! contract. Thus,! Patricia!Denny!must!

assert! a! cause! of! action against! Victor! DeMarco to! determine!

fairness,! obtain! findings! of! unfairness,! and! obtain! a! judgment!

declaring! the September! 2012! Settlement! Agreement! void in!

order!to!avoid!the!terms!of!that!agreement.

II. Regardless,!even!if! the Court!has!authority! to!determine! fairness!

(which! it! does! not),! the! evidence! shows! that! Mr.! DeMarco’s!

release! of! his! personal! claims! against! Ms.! Denny! and! the! other!

items! Mr.! DeMarco! was! willing! to! give! in! exchange! for! a! “walkR

away”!settlement, do!have!value,!value! that!may!be even!beyond!

the!$5,100.00!negotiated!for the!July!2012!Settlement!Agreement.!

III. Because!the September! 2012! Settlement! Agreement! is! valid! and!

enforceable,! and! Mr.! DeMarco! was! denied! mediation! by! the!

Justice! Court,! this! Court! should! compel arbitration! pursuant! to!

the September!2012!Settlement!Agreement.
2

STATEMENT%OF%FACTS

This! case! originally! arose! under! a! Drilling! Agreement. PGD (a!

company! owned! in! part! by! Patricia! Denny! and! Victor! DeMarco)

contended! that! AGSI (a! company! owned! by! Mr.! DeMarco) owed!

amounts!to!PGD!under!the!Drilling!Agreement,!and!AGSI!contended!that!

it!was!required!to!pay!a!third!party!to!do what!PGD!was!required!to!do,!

namely!install!pilings,!and! that!it!didn’t!agree! to!pay! for!any!extras! for!

which!it!was!being!billed!by!PGD!(the!“Drilling!Dispute”).!(CR!38R44.)

While! the! Drilling! Dispute! was! in! litigation, a separate! dispute!

arose! between! Mr.! DeMarco! and! PGD! concerning! Patricia! Denny’s!

operation! of! PGD! and! her refusal! to! provide! documents! and! other!

information! he! had! requested! as! a! 49%! owner! of! PGD (the! “PGD!

Dispute”). Her!refusal!to!provide!the!requested!records!to!Mr.!DeMarco!

was!a!violation!of!the!Texas Business Organizations!Code.!

On! our! about! June! 29,! 2012,! AGSI! and! PGD settled! the! Drilling!

Dispute! for! a! lumpRsum! payment! by! AGSI! to! PGD! of! $5,100.00,! which!

settlement! was! confirmed! by! way! of! a! Rule! 11! Agreement! drafted! by!

PGD’s!counsel and! filed!with! the! JP!Court.! (CR!62.)!On or!about! July!6,!

2012,! PGD!drafted! and! sent! a! settlement! agreement! to! AGSI’s! counsel!

confirming!the!Drilling!Settlement.!(CR!63R64)
3

On! or! about! July! 9,! 102, PGD! repudiated! the!Drilling!Settlement,!

retracted!the!settlement!agreement!it!had!sent,!and!demanded!that!Mr.!

DeMarco!also!agree!to!release!all!claims!arising!from!the!PGD!Dispute!as!

well,!which!was!not!part!of! the!Drilling!Settlement. (CR!12;!CR!75R77.)

Mr.!DeMarco!refused to!release!his!claims.!

When PGD!finally!produced!the!documents!that!Mr.!DeMarco!had!

been!requesting,!the!documents revealed,!among!other!things,!that:!(1)!

PGD!had!not!filed a!tax!return!for!2011,! generated!any!KR1!statements!

to!the!owners!of!PGD!for!2011,!or!obtained!an!extension!from!the!IRS!to!

file! PGD’s! 2011! tax! returns (see CR! 233);! (2)! no! meetings! of! the!

members! or! managers! of! PGD! had! ever! occurred;! (3)! without! Mr.!

DeMarco’s! knowledge! or! consent,! PGD! had! hired! and! been! paying!Ms.!

Denny’s! husband! as! a! “consultant”! to! PGD;! (4)! without!Mr.!DeMarco’s!

knowledge!or!consent,!Ms.!Denny!had!retroactively!changed!her!capital!

contributions! to! PGD! for! 2010! and! 2011! into! a! promissory! note! she!

signed! on! behalf! of! PGD! to! her! husband;! (5)! Mr.! DeMarco! was! and!

always!had!been!a!Manager!of!PGD,!notwithstanding!representations!by!

Ms.!Denny! to!Mr.!DeMarco! and! others! that! she!was! the! sole!Manager;!

and! (6)! PGD!is!minimally! capitalized,!and! hasn’t! done!any! business! or!

made!any!income!since!2011. (CR!79R85.)
4

Because! PGD! refused! to! proceed! with! the! July! 2012! Settlement!

Agreement without!Mr.!DeMarco’s! release!of!claims!against!Ms.!Denny!

and!PGD,!and! failed! to! timely!produce!PGD’s!books!and! records! to!Mr.!

DeMarco,! it! is! suspected! that! Ms.! Denny! knew! all! along! that! she! was!

mismanaging! PGD and! wanted! to! protect! herself from!liability! for! her!

mismanagement!of!PGD.!

Also,!PGD!refused!to!submit!its!federal!tax!returns!for!2011!unless!

and! until! Mr.! DeMarco! paid the! $5,100.00! under! the! July! 2012!

Settlement!Agreement,!which!PGD!had!already!repudiated. (CR!70R72.)

PGD’s! counsel!again! stated that! unless!Mr.!DeMarco! released! his!

claims!arising!from!the!PGD!Dispute,!PGD!would!set the!Drilling!Lawsuit!

for! trial.!When Mr.!Demarco!did!not!agree! to!release!his!claims!arising!

from! the! PGD! Dispute,! PGD’s! counsel,! having! repudiated! the! Drilling!

Settlement, set!the!Drilling!Lawsuit!for!another!trial. (CR!78.)

In! addition! to! giving! Ms.! Denny! the! release! she! so! desperately!

wanted,! the September!2012!Settlement!Agreement was!also!intended!

to! restore! PGD! into! compliance! with! state! and! federal laws.! In! the!

September! 2012! Settlement! Agreement,! Mr.! DeMarco! settled! both! the!

Drilling!Dispute!and!the!PGD!Dispute!for!a!“walk!away,”!meaning!that!all!

parties—PGD,! AGSI,! Ms.! Denny,! and! Mr.! DeMarco—would release all!
5

claims! against! each! other,!without! any! payment! by! any! party.!(CR! 79R

85.) Given! the! irregularities! in! PGD’s! books! &! records! produced,! the!

extreme!delays!in!producing!such!records,!and! the! failure! to! file!PGD’s!

2011!tax!return,!Mr.!DeMarco!also!agreed!to!hire!and!pay!a!CPA!firm!to!

prepare! PGD’s! tax! return! for! 2011 and! balance! and! rehabilitate! PGD’s!

books! and! records,! at! his! own! expense. (CR! 81.) The! September! 2012!

Settlement!Agreement also!included a!mediation!and!arbitration!clause!

to!settle!any!further!disputes!between!the!parties.!(CR!84.)
6

ARGUMENT

I. Because%the%issue%of%unfairness%has%not%been%fully%litigated%or%

adjudicated,% the% September%2012% Settlement%Agreement% is% a%

valid% and% enforceable% agreement.% Thus,% the% Court% cannot%

unilaterally% declare% the% September% 2012% Settlement%

Agreement%unfair%and%treat% it%as%void%by%failing%to%enforce% it.%

Texas%Business%Organization%Code%section%101.255%only%gives%

the% company% or% the% company’s% members% a% cause% of action%

against% the% “interested% governing%person”% if% the%company% or%

the%company’s%members%believe%a%contract%is%not%fair.%Section%

101.255%does%not%automatically%void%an%unfair%contract. Thus,%

Patricia% Denny% must% assert% a% cause% of% action% against% Victor%

DeMarco%to%determine%fairness,%obtain%findings%of%unfairness,%

and% obtain% a% judgment% declaring% the September% 2012%

Settlement%Agreement%void in%order%to%avoid%the%terms%of%that%

agreement.

Texas! Business! Organizations! Code! section! 101.255! provides,! in!

relevant!part:!

§! 101.255.! Contracts! or!Transactions! Involving! Interested!

Governing!Persons!or!Officers

(a)! This! section! applies! to! a! contract! or! transaction!

between!a!limited!liability!company!and:

(1)! one! or! more! governing! persons! or! officers,! or!

one! or! more! affiliates! or! associates! of! one! or!

more! governing! persons! or! officers,! of! the!

company;!or

(2)! an!entity!or!other!organization!in!which!one!or!

more! governing! persons! or! officers,! or! one! or!

more! affiliates! or! associates! of! one! or! more!

governing!persons!or!officers,!of!the!company:

(A)!is!a!managerial!official;!or

(B)!has!a!financial!interest.
7

(b)! An! otherwise! valid! and! enforceable! contract! or!

transaction! described! by! Subsection! (a) is! valid! and!

enforceable,! and! is! not! void! or! voidable,!

notwithstanding! any! relationship! or! interest!

described! by! Subsection! (a),! if! any! one! of! the!

following!conditions!is!satisfied:

(1)! the! material! facts! as! to! the! relationship! or!

interest! described! by! Subsection! (a)! and! as! to!

the! contract! or! transaction! are! disclosed! to! or!

known!by:

(A)! the! company's! governing! authority! or! a!

committee!of!the!governing!authority!and!

the! governing! authority! or! committee! in!

good! faith! authorizes! the! contract! or!

transaction by! the! approval! of! the!

majority! of! the! disinterested! governing!

persons! or! committee! members,!

regardless! of! whether! the! disinterested!

governing! persons! or! committee!

members!constitute!a!quorum;!or

(B)! the! members! of! the! company,! and! the!

members! in! good! faith! approve! the!

contract! or! transaction! by! vote! of! the!

members;!or

(2)! the! contract! or! transaction! is! fair! to! the!

company! when! the! contract! or! transaction! is!

authorized,! approved,! or! ratified! by! the!

governing! authority,! a! committee! of! the!

governing! authority,! or! the! members! of! the!

company...

(d)! A! person! who! has! the! relationship! or! interest!

described!by!Subsection!(a)!may:

(1)! be!present!at!or!participate!in!and,!if!the!person!

is! a! governing! person! or! committee! member,!

may! vote! at! a! meeting! of! the! governing!

authority! or! of! a! committee! of! the! governing!

authority! that! authorizes! the! contract! or!

transaction;!or
8

(2)! sign,! in! the! person's! capacity! as! a! governing!

person! or! committee! member,! a! written!

consent!of!the!governing!persons!or!committee!

members! to! authorize! the! contract! or!

transaction.

(e)! If%at%least%one%of%the%conditions%of%Subsection%(b)%is%

satisfied,% neither% the% company% nor% any% of% the%

company's% members% will% have% a% cause% of% action%

against% any% of% the% persons% described% by%

Subsection% (a)% for% breach% of%duty% with% respect% to%

the%making,% authorization,% or%performance% of% the%

contract% or% transaction% because% the% person% had%

the% relationship% or% interest% described% by%

Subsection% (a)% or% took% any% of% the% actions%

authorized%by%Subsection%(d).

(Emphasis!added.) (See Appendix!1.)

The!goal!of!statutory!construction!is!to!give!effect!to!the!intent!of!

the!legislature.!Sorokolit*v.*Rhodes,!889!S.W.2d!239,!241! (Tex.!1994).!If!

language!in!a!statute!is!unambiguous,!this!court!must!seek!the!intent!of!

the!legislature!as!found!in!the!plain!and!common!meaning!of!the!words!

and! terms! used. Id. In! applying! the! plain! and! common!meaning! of! the!

language! in! a! statute,! courts! may! not! by! implication! enlarge! the!

meaning!of!any!word!in! the!statute!beyond!its!ordinary!meaning;!such!

implication! is! inappropriate! when! legislative! intent! may! be! gathered!

from!a!reasonable!interpretation!of!the!statute!as!it!is!written. Id.

A! plain! reading! of! section! 101.255! establishes that! unless! and!

until! Ms.! Denny! and/or PGD! asserts a! cause! of! action! against! Mr.!
9

DeMarco! and! obtains a! judgment! voiding! the! September! 2012!

Settlement! Agreement,! the! September! 2012! Settlement! Agreement,!

including!the!arbitration!clause!within!it, is!valid!and fully!enforceable.

Texas! Business! Organizations! Code! section! 101.255! does! not! declare!

that!an! unfair! contract!with!an! “interested!governing! person”!is!per*se

void! or! voidable.! Rather,! section! 101.255,! in! subsection! (e),! merely!

provides!PGD!and!Ms.!Denny!with!a!cause!of!action!against!Mr.!DeMarco

if!they!believe!that!the!September!2012!Settlement!Agreement!is!unfair!

to! PGD.! Thus,! in! order! to! avoid! the terms! of! the September! 2012!

Settlement! Agreement,! Ms.! Denny! and! PGD! must! litigate! the! fairness!

issue! and! obtain! a! judgment! voiding! the! September! 2012! Settlement!

Agreement.!

Because!Ms.!Denny!and!PGD!have!not!asserted!a!cause!of!action to!

void! the! September! 2012! Settlement! Agreement,! this! Court! must!

enforce!it.!

II. Regardless,% even% if% the% Court% has% authority% to% determine%

fairness% (which% it% does% not), the% evidence% shows% that% Mr.%

DeMarco’s% release% of% his% personal% claims% against% Ms.% Denny%

and% the% other% items% Mr.% DeMarco% was% willing% to% give% in%

exchange% for%a%“walkXaway”%settlement,%do%have%value,%value%

that% may% be% even% beyond% the% $5,100.00% negotiated% for% the%

July%2012%Settlement%Agreement.
10

Here,! the! Court! has! no! authority! to! determine! whether! the!

September! 2012! Settlement! Agreement! is! unfair! to! PGD.! Whether! a

transaction!is!fair!is!a!fact!question!for!the!jury!to!determine from!all!the!

facts!and!circumstances!of!the!case.! Wilson*Fin.*Co.*v.*State,!342!S.W.2d!

117,!125!(Tex.!Civ.!App.—Austin!1960, writ!ref’d!n.r.e.).!

However,! even! if! the! Court! has authority! to! determine! the fact!

issue of! fairness, the! facts! demonstrate! that! the September! 2012!

Settlement!Agreement!was!more! than! fair! to! PGD! and!Ms.!Denny.! The!

fact! that! Ms.! Denny repudiated! the! July! 2012! Settlement! Agreement!

(which! she! and! her! attorneys! negotiated,! agreed! to! and! drafted),!

refused! to! settle! the!Drilling!Dispute!without!Mr.!DeMarco’s! release! of!

his! claims! against! her!for! mismanaging! PGD,! and! was! willing! to! go! to!

trial!again,!shows! that!she!certainly!placed!a!good!deal!of!value!on!Mr.!

DeMarco’s! release! of! his! claims! against! her.! Also,! the! fact! that! PGD

(under!Ms.!Denny’s!mismanagement) was!not!going!to!timely!file!its!tax!

return was!harmful!to!PGD,!since!the!IRS!had!not!granted!an!extension!

to! PGD! to! file! its! tax! return late.! (CR! 233).! Mr.! DeMarco! released! his!

claims!against!Ms.!Denny!and!agreed!to!hire!and!pay,!out!of!his!pocket, a!

CPA!firm!to!file!PGD’s!overdue!tax!returns!and!balance and!rehabilitate

PGD’s!books and!records in the!September!2012!Settlement!Agreement.!
11

Thus,!under the!September!2012!Settlement!Agreement,!Ms. Denny!got!

the!release!she!so!desperately!wanted and!also got PGD’s!books!in!order!

and!in!compliance!with!state!and!federal!laws.!

Because! the! facts! demonstrate! that! the! September! 2012!

Settlement! Agreement! was! more! than! fair! to! PGD! and! Ms.! Denny,!

probably! even!more! fair! than! a!lumpRsum! payment! of! $5,100.00! from!

AGSI,!the!Court!should!make!no!determination!that!the!September!2012!

Settlement!Agreement is!unfair,!if the!Court even!has authority!to!make!

such!determination!(which!it!does!not).!

III. Because%the September% 2012% Settlement% Agreement% is% valid%

and% enforceable,% and%Mr.%DeMarco%was%denied%mediation%by%

the% Justice% Court,% this% Court% should% compel% arbitration%

pursuant%to%the September%2012%Settlement%Agreement.

Regarding!Footnote!6!in!the!Court’s!Opinion,!Mr.!DeMarco!did,!in!

fact,! ask! the! Justice! Court! to! refer! the! dispute! between! the! parties! to!

mediation.!(CR! 362,! bottom! of! the! page.).! However,! the! Justice! Court!

ignored! Mr.! DeMarco’s! request! for! mediation! and! denied! arbitration.

(CR! 222R223.) Because the! Justice! Court! made mediation impossible,!

lack!of!mediation should!not!be!an!additional!reason!to!refuse!to!compel!

arbitration.!
12

PRAYER

For!the!reasons!above,!Appellants Twenty!First!Century!Holdings,!

Inc.!d/b/a!American!Geothermal!Systems,!Inc.!and!Victor!DeMarco!pray!

that!the!Court:

(1) Vacate or! rescind its! determination! that! the! September! 2014!

Settlement!Agreement!is!not!fair;

(2) enter! an! order! compelling! the! parties! to! arbitrate! any!

remaining!disputes!between!them; and!

(3) grant! Appellants any! other! and! further! relief! to! which! they!

may!be!entitled.

Respectfully!submitted,!

WEST!SHORT!&!ASSOCIATES,!P.C.

By: /s/!N.!West!Short

N.!West!Short

State!Bar!No.!00788407

313!West!10th!Street

Georgetown,!Texas!78626

512.864.3911

512.864.3966!(Fax)

west.short@westshortlawfirm.com

Of!Counsel:

Tracia!Y.!Lee

State!Bar!No.!24013021

TRACIA!Y.!LEE,!P.L.L.C.

P.O.!Box!171022

Austin,!Texas!78717
13

512.814.6167

512.271.6806!(Fax)

tlee@tleelaw.com

ATTORNEYS FOR%APPELLANTS

CERTIFICATE%OF%COMPLIANCE

I! certify! that! I! drafted! Appellant’s! Motion! for! Rehearing using!

Microsoft!Word!for!Mac!2011!using!Cambria 14Rpoint!font!and!that!the!

Motion!for!Rehearing contains!2500 words.!

/s/!Tracia!Y.!Lee

Tracia!Y.!Lee

CERTIFICATE%OF%CONFERENCE

Per!local!rule 54,! I!certify! that! I!have!conferred!with! Jason!Snell,!

attorney!for!Appellees,!and!he!opposes!this!Motion.!

/s/!N.!West!Short

N.!West!Short
14

CERTIFICATE%OF%SERVICE

I! hereby! certify! that! a! true! and! correct! copy! of! the! foregoing!

document!was! served! via! facsimile,! eRmail, or! eRservice,!in! accordance!

with! the! Texas! Rules! of! Appellate! Procedure, on! this! 5th day! of! May,

2015 upon!the!following:

The!Snell!Law!Firm,!P.L.L.C.

Jason!Snell

The!Littlefield!Building

106!E.!6th Street,!Suite!330

Austin,!Texas!78701

512.477.5291

512.477.5294!(Fax)

ATTORNEYS*PRECISION*

GEOTHERMAL*DRILLING*LLC

/s/!N.!West!Short

N.!West!Short
15

No.!03R13R00081RCV

IN%THE%COURT%OF%APPEALS

FOR%THE%THIRD%DISTRICT%OF%TEXAS

AT%AUSTIN,%TEXAS

TWENTY%FIRST%CENTURY%HOLDINGS, INC. D/B/A%AMERICAN%GEOTHERMAL%

SYSTEMS, INC., VICTOR%DEMARCO, AND%N. WEST%SHORT

V.

PRECISION%GEOTHERMAL%DRILLING, L.L.C.

FROM%THE%COUNTY%COURT%AT%LAW%NO. 2 OF%TRAVIS%COUNTY,

NO. CX1XCVX12X12503, HONORABLE%ERIC%SHEPPERD, JUDGE%PRESIDING

APPELLANT’S%APPENDIX

ITEM!1 Texas!Business!Organizations!Code!§ 101.255
No.!03'13'00081'CV

IN#THE#COURT#OF#APPEALS

FOR#THE#THIRD#DISTRICT#OF#TEXAS

AT#AUSTIN,#TEXAS

TWENTY#FIRST#CENTURY#HOLDINGS, INC. D/B/A#AMERICAN#GEOTHERMAL#SYSTEMS,

INC., VICTOR#DEMARCO, AND#N. WEST#SHORT

V.

PRECISION#GEOTHERMAL#DRILLING, L.L.C.

APPELLANT’S#MOTION#FOR#REHEARING

ITEM!1

Texas!Business!Organizations!Code §!101.255
§ 101.255. Contracts or Transactions Involving Interested..., TX BUS ORG § 101.255

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 1

	

		

			

 !"#"$%	#&	

'&()(!"#"$%	#&	

$*'&+!,#

!!!!-		.()(!/00

.()(!/00!	*	*	12	213	24		*

5*26&#$(-/)((



(a) This section applies to a contract or transaction between a limited liability company and:

(1) one or more governing persons or officers, or one or more affiliates or associates of one or more governing persons or

officers, of the company; or

(2) an entity or other organization in which one or more governing persons or officers, or one or more affiliates or associates

of one or more governing persons or officers, of the company:

(A) is a managerial official; or

(B) has a financial interest.

(b) An otherwise valid and enforceable contract or transaction described by Subsection (a) is valid and enforceable, and is not

void or voidable, notwithstanding any relationship or interest described by Subsection (a), if any one of the following conditions

is satisfied:

(1) the material facts as to the relationship or interest described by Subsection (a) and as to the contract or transaction are

disclosed to or known by:

(A) the company's governing authority or a committee of the governing authority and the governing authority or committee

in good faith authorizes the contract or transaction by the approval of the majority of the disinterested governing persons

or committee members, regardless of whether the disinterested governing persons or committee members constitute a

quorum; or

(B) the members of the company, and the members in good faith approve the contract or transaction by vote of the members;

or
§ 101.255. Contracts or Transactions Involving Interested..., TX BUS ORG § 101.255

 © 2015 Thomson Reuters. No claim to original U.S. Government Works. 2

(2) the contract or transaction is fair to the company when the contract or transaction is authorized, approved, or ratified by

the governing authority, a committee of the governing authority, or the members of the company.

(c) Common or interested governing persons of a limited liability company may be included in determining the presence of

a quorum at a meeting of the company's governing authority or of a committee of the governing authority that authorizes the

contract or transaction.

(d) A person who has the relationship or interest described by Subsection (a) may:

(1) be present at or participate in and, if the person is a governing person or committee member, may vote at a meeting of

the governing authority or of a committee of the governing authority that authorizes the contract or transaction; or

(2) sign, in the person's capacity as a governing person or committee member, a written consent of the governing persons or

committee members to authorize the contract or transaction.

(e) If at least one of the conditions of Subsection (b) is satisfied, neither the company nor any of the company's members will

have a cause of action against any of the persons described by Subsection (a) for breach of duty with respect to the making,

authorization, or performance of the contract or transaction because the person had the relationship or interest described by

Subsection (a) or took any of the actions authorized by Subsection (d).

Credits

Acts 2003, 78th Leg., ch. 182, § 1, eff. Jan. 1, 2006. Amended by Acts 2009, 81st Leg., ch. 84, § 44, eff. Sept. 1, 2009; Acts

2011, 82nd Leg., ch. 139 (S.B. 748), § 38, eff. Sept. 1, 2011.

V. T. C. A., Business Organizations Code § 101.255, TX BUS ORG § 101.255

Current through the end of the 2013 Third Called Session of the 83rd Legislature

End of Document © 2015 Thomson Reuters. No claim to original U.S. Government Works.