Texas Business Organizations Code 101.454 – Determination by Governing or Independent Persons
(a) The determination of how to proceed on allegations made in a demand or petition relating to a derivative proceeding must be made by an affirmative vote of the majority of:
(1) the independent and disinterested governing persons of the limited liability company, whether one or more, even if the independent and disinterested governing persons are not a majority of the governing persons of the limited liability company;
(2) a committee consisting of one or more independent and disinterested governing persons appointed by the majority of one or more independent and disinterested governing persons of the limited liability company, even if the appointing independent and disinterested governing persons are not a majority of the governing persons of the limited liability company; or
(3) a panel of one or more independent and disinterested individuals appointed by the court on a motion by the limited liability company listing the names of the individuals to be appointed and stating that, to the best of the limited liability company’s knowledge, the individuals to be appointed are disinterested and qualified to make the determinations contemplated by § 101.458.
(b) An entity to which this subsection applies is independent and disinterested under this section only if its decision with respect to the limited liability company’s derivative proceeding is made by a majority of its governing persons who are independent and disinterested with respect to that derivative proceeding, even if those governing persons are not a majority of its governing persons. This subsection applies to an entity that is:
(1) a managing entity of the limited liability company; or
(2) directly, or indirectly through one or more other entities, a governing person of that managing entity.
Terms Used In Texas Business Organizations Code 101.454
- Entity: means a domestic entity or foreign entity. See Texas Business Organizations Code 1.002
- Fraud: Intentional deception resulting in injury to another.
- Governing person: means a person serving as part of the governing authority of an entity. See Texas Business Organizations Code 1.002
- Individual: means a natural person. See Texas Business Organizations Code 1.002
- Limited liability company: means an entity governed as a limited liability company under Title 3 or 7. See Texas Business Organizations Code 1.002
(c) The court shall appoint a panel under Subsection (a)(3) if the court finds that the individuals recommended by the limited liability company are independent and disinterested and are otherwise qualified with respect to expertise, experience, independent judgment, and other factors considered appropriate by the court under the circumstances to make the determinations. An individual appointed by the court to a panel under this section may not be held liable to the limited liability company or the limited liability company’s members for an action taken or omission made by the individual in that capacity, except for acts or omissions constituting fraud or wilful misconduct.