Texas Business Organizations Code 101.458 – Dismissal of Derivative Proceeding
(a) A court, sitting in equity as the finder of fact, shall dismiss a derivative proceeding on a motion by the limited liability company if the person or group of persons described by § 101.454 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 liability company.
(b) In determining whether the requirements of Subsection (a) have been met, the burden of proof shall be on:
(1) the plaintiff member if:
(A) the applicable person or persons making the determination under § 101.454(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 persons appointed under § 101.454(a)(3); or
(C) the limited liability company presents prima facie evidence that demonstrates that the applicable person or persons making the determination under § 101.454(a) are independent and disinterested; or
(2) the limited liability company in any other circumstance.
Terms Used In Texas Business Organizations Code 101.458
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Limited liability company: means an entity governed as a limited liability company under Title 3 or 7. See Texas Business Organizations Code 1.002
- Member: means :
(A) in the case of a limited liability company, a person who has become, and has not ceased to be, a member in the limited liability company as provided by its governing documents or this code;
(B) in the case of a nonprofit corporation, a person who has membership rights in the nonprofit corporation under its governing documents;
(C) in the case of a cooperative association, a member of a nonshare or share association;
(D) in the case of a nonprofit association, a person who has membership rights in the nonprofit association under its governing documents; or
(E) in the case of a professional association, a person who has membership rights in the professional association under its governing documents. See Texas Business Organizations Code 1.002 - Person: means an individual or a corporation, partnership, limited liability company, business trust, trust, association, or other organization, estate, government or governmental subdivision or agency, or other legal entity, or a protected series or registered series of a domestic limited liability company or foreign entity. See Texas Business Organizations Code 1.002
- Plaintiff: The person who files the complaint in a civil lawsuit.