| 1 | 1 | | 84R9787 AJA-D |
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| 2 | 2 | | By: Simmons H.B. No. 3168 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to remedies for oppression of minority shareholders by |
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| 8 | 8 | | directors of closely held corporations. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Subchapter E, Chapter 21, Business Organizations |
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| 11 | 11 | | Code, is amended by adding Section 21.227 to read as follows: |
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| 12 | 12 | | Sec. 21.227. REMEDIES FOR SHAREHOLDER OPPRESSION IN CLOSELY |
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| 13 | 13 | | HELD CORPORATIONS. (a) In this section, "closely held corporation" |
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| 14 | 14 | | has the meaning assigned by Section 21.563. |
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| 15 | 15 | | (b) If, in an action by a minority shareholder of a closely |
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| 16 | 16 | | held corporation, it is established that the actions of the board of |
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| 17 | 17 | | directors of the corporation are oppressive with respect to the |
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| 18 | 18 | | shareholder, the court may order, in addition to any remedy |
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| 19 | 19 | | authorized by this code, any legal or equitable remedy the court |
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| 20 | 20 | | determines appropriate under the circumstances, including: |
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| 21 | 21 | | (1) the appointment of a fiscal agent to periodically |
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| 22 | 22 | | report to the court; |
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| 23 | 23 | | (2) the retention of jurisdiction by the court; |
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| 24 | 24 | | (3) an accounting of allegedly misappropriated funds; |
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| 25 | 25 | | (4) an injunction against the oppressive conduct; |
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| 26 | 26 | | (5) payment of a dividend; |
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| 27 | 27 | | (6) a buyout of the minority shareholder's shares; |
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| 28 | 28 | | (7) authorization for the minority shareholder to |
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| 29 | 29 | | purchase additional stock; and |
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| 30 | 30 | | (8) payment of damages caused by the oppressive |
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| 31 | 31 | | conduct. |
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| 32 | 32 | | SECTION 2. The change in law made by this Act applies only |
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| 33 | 33 | | to oppressive conduct that occurs on or after the effective date of |
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| 34 | 34 | | this Act. |
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| 35 | 35 | | SECTION 3. This Act takes effect September 1, 2015. |
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