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Texas Business Organizations Code - BUS ORG § 153.408. Dismissal of Derivative Proceeding

Current as of April 14, 2021 | Updated by FindLaw Staff

(a) A court, sitting in equity as the finder of fact, shall dismiss a derivative proceeding on a motion by the limited partnership if the person or group of persons described by Section 153.404 determines in good faith, after conducting a reasonable inquiry and based on factors the person or group considers appropriate under the circumstances, that continuation of the derivative proceeding is not in the best interests of the limited partnership.

(b) In determining whether the requirements of Subsection (a) have been met, the burden of proof shall be on:

(1) the plaintiff limited partner if:

(A) the applicable person or persons making the determination under Section 153.404(a)(1) or (2) are independent and disinterested at the time the determination is made;

(B) the determination is made by a panel of one or more independent and disinterested individuals appointed under Section 153.404(a)(3);  or

(C) the limited partnership presents prima facie evidence that demonstrates that the applicable person or persons making the determination under Section 153.404(a) are independent and disinterested;  or

(2) the limited partnership in any other circumstance.

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Cite this article: FindLaw.com - Texas Business Organizations Code - BUS ORG § 153.408. Dismissal of Derivative Proceeding - last updated April 14, 2021 | https://codes.findlaw.com/tx/business-organizations-code/bus-org-sect-153-408/

Read this complete Texas Business Organizations Code - BUS ORG § 153.408. Dismissal of Derivative Proceeding on Westlaw

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