Texas Business Dispute Blog

Monday, September 11, 2017

Family Law Post (Part II) - What's Love Got To Do With It: The Business, Financial and Other Benefits Of A Marital Pre-Nup


By Frances Ellenbogen and Ladd Hirsch

Couples often spend months planning their wedding day details, from the color of the flowers to the icing on the cake.  What they often overlook, however, are the legal rules that will govern their property once they are married.  While the topic lacks romance, couples should seriously consider the benefits of entering into a pre-nuptial agreement, which will impact them, and potentially their children, far beyond their wedding day.

This is the second in a two-part series focusing on pre-marital agreements, or pre-nups. Part 1 considered how a pre-nup can help a couple address a number of crucial financial and personal issues.


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Monday, August 21, 2017

Family Law Post (Part 1) - Love Is Forever, But A Pre-Nup May Be The Better Bet: The Financial And Other Benefits Of A Marital Pre-Nup

By Ladd Hirsch*

Not so long ago, marital pre-nups were viewed as devices solely for use by the rich and famous, who never seemed to stay married for long.  In today’s world, however, couples from all walks of life face a myriad of important financial and personal issues that a pre-nup can help them to address.  Pre-nups can benefit both spouses, including by:

  • Preventing costly, drawn out divorce litigation;
  • Protecting a spouse’s interests in a business;
  • Preserving valuable family assets, real property and heirlooms;
  • Assuring the inheritance rights of spouses and children;
  • Shielding one spouse or children from creditors; and
  • Giving peace of mind to the couple by reducing uncertainty about the impact of major life events in the future.

This is a two-part Post focusing on marital pre-nups.  Part 1 evaluates how a pre-nup can address important critical business and family issues for the couple.


Read more . . .


Tuesday, July 25, 2017

Ducks Don't Walk, Talk or Sign Partnership Agreements: Dallas Court of Appeals Reverses $535 Million Verdict for ETP

By Ladd Hirsch

Since 2014, Energy Transfer Partners LP (“ETP”) has been fighting to hold on to the $535 million judgment it obtained that year against Enterprise Products Partners (“Enterprise”).  Our blog post earlier this year analyzed ETP’s efforts to persuade the Dallas Court of Appeals that ETP and Enterprise, two sophisticated companies in the energy industry, had entered into an unwritten partnership agreement, or as Enterprise referred to it on appeal – a partnership by ambush in disregard of the parties’ written agreements.


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Thursday, July 6, 2017

What Is A Business Divorce: And How To Achieve One

By:  Ladd Hirsch

Looking back on the celebration of Independence Day this week, one of history’s most notable separations, it may be a good time for business partners who are locked in conflict to consider a business divorce.  Unlike the fight to the death between the redcoats and the patriots, however, the focus of a business divorce is how to structure a separation between business partners that achieves a win-win outcome for both sides.

In its simplest terms, a business divorce refers to the process by which the owners of a private business separate from their co-owners.   This Post discusses issues common to most business divorces that will be helpful for business owners to consider before they embark on this process.  The perspective in the Post is from the vantage point of the minority owner seeking to negotiate favorable terms for his/her exit from the business.


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Tuesday, May 23, 2017

Shareholder Derivative Claims: The Sharp Arrow in the Quiver Still Available to Minority Shareholders In Texas Private Companies

By: Ladd Hirsch

Based on our personal experience handling Business Divorce matters for both majority owners and substantial minority investors in private companies, we have learned firsthand that there are two sides to every story and every Business Divorce matter is unique.


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Tuesday, April 11, 2017

Despite Dante’s Warning (Abandon Hope), There is Hope for Minority Investors Who Failed to Obtain a Buy-Sell Agreement Before Acquiring Their Interest

By: Ladd Hirsch

Life is all a about second chances.   In the business world, minority investors may feel that they are trapped if they failed to obtain a buy-sell agreement before investing and have no contractual right to exit the company.  This situation is common in family businesses when the minority owners did not request their grandparents, parents or other family members to provide a buy-out right at the time the company was formed.  Fortunately, all hope is not lost for minority investors who did not obtain a buy-sell agreement before they obtained their stake in the company.  This post explores ways minority investors may secure a buy-sell agreement with majority owners even after the investors acquired their minority ownership interest in the business.


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Tuesday, March 28, 2017

Buy-Sell Agreements: Don’t Leave Home (Or Invest) in a Private Company Without One

By: Ladd Hirsch

The season finale of the hit reality TV show The Bachelor attracted more than 8 million viewers. My wife and teenage daughters help make up this devoted fan base, and watch every episode. Yet, when I question them about whether the subject of a pre-nup agreement has ever come up on the show, I get eye rolls, and comments like, “Dad, don’t be such a downer.”  Assuming that the Bachelor and his new fiancé do make it to the altar, however, the show also does not mention that


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Monday, February 27, 2017

What Is A Texas Partnership: The Answer To Come Soon In The Case Of ETP v. Enterprise Products Partners LP

By:  Ladd Hirsch

The legal tension is building.  Private Texas companies and their owners are awaiting a court decision that may force them to say “Howdy, Partner” to companies with whom they have no written partnership agreement. The case on which business eyes are focused is ETP v. Enterprise Products Partners, which is before the Dallas Court of Appeals after a jury awarded $535 million in early 2014.  The case has been described as a corporate form of common law marriage to a company that the jury determined was jilted in favor of another. This is the hottest partnership case the Lone Star State has seen in years.

The Disputed Partnership at the Heart of the Case

Energy Transfer Partners LP (“ETP”) alleges that it formed a statutory (unwritten) partnership with Enterprise Products Partners LP (“Enterprise”) to build a crude oil pipeline that would carry oil from Cushing, Oklahoma to the Gulf of Mexico. Enterprise contended that no partnership arose because the boards of the companies never signed a definitive agreement. ETP countered that the actions of the companies confirmed their intent to work as partners and that their conduct met the five-factor test for determining partnership in the Texas Business Organizations Code.



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Friday, February 10, 2017

Virtual Reality Goes To Court: Lessons Learned From The $500 Million Jury Verdict Against Facebook’s Oculus Division

By: Ladd Hirsch

The ink is barely dry on the half billion dollar verdict that a Dallas federal court jury returned last week for ZeniMax Media against Oculus, a virtual reality company that Facebook acquired in May 2014. Even before the federal court issues a final judgment and Oculus files an inevitable appeal, however, the case provides valuable lessons for business owners and investors.


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Tuesday, December 20, 2016

Brave New World: Minority Shareholders Take the Shackles Off - Looking Back at Private Company Ownership Issues During 2016 (Part 2)

By: Ladd Hirsch

Tis the season to say, out with the old and in with the new.  But for minority shareholders with ownership in private Texas companies during 2016, not much changed.  Minority shareholders remained without access to a buyout remedy under Texas law, which resulted in minority owners pursuing traditional claims against majority owners, as well as seeking relief under more novel causes of action. 

This is the second in a two part series on significant legal issues that affected private company business owners during 2016.  We consider in this post how the absence of a claim for minority shareholders that would permit them to secure a buyout remedy has resulted in a spike in claims filed against majority owners for breaching the fiduciary duties they owe to their companies, and also caused minority owners to consider other legal remedies to pursue against majority owners.


Read more . . .


Monday, December 12, 2016

A Look Back at 2016 – Legal Issues Affecting Texas Private Company Owners and Investors (Part 1)

A sure sign the year is winding up is the release of A sure sign the year is winding up is the release of TIME magazine’s “Person of the Year” list.  If TIME created a similar list of legal developments impacting owners and investors in private Texas companies this past year, at least two issues would be on it: the adoption of the Defend Trade Secrets Act and the stalemate that continues to exist for minority shareholders who have claims for oppression against majority owners.  The legal restrictions on the oppression claim have spurred an increase in shareholder derivative lawsuits containing allegations that private company officers and directors breached their fiduciary duties to the business.


Read more . . .


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