Texas Business Organizations Code 153.408 – 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 partnership if the person or group of persons described by § 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 § 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 § 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 § 153.404(a) are independent and disinterested; or
(2) the limited partnership in any other circumstance.
Terms Used In Texas Business Organizations Code 153.408
- 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 partner: means a person who has become, and has not ceased to be, a limited partner in a limited partnership in accordance with the governing documents of the limited partnership or this code. See Texas Business Organizations Code 1.002
- Limited partnership: means a partnership that is governed as a limited partnership under Title 4 and that has one or more general partners and one or more limited partners. See Texas Business Organizations Code 1.002
- Partnership: A voluntary contract between two or more persons to pool some or all of their assets into a business, with the agreement that there will be a proportional sharing of profits and losses.
- Partnership: means an entity governed as a partnership under Title 4. 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.