Notes · Bluebook (21st ed.) · sheet 08

Marker colour shows verification: red, primary source opened at the cited passage; amber, pin not opened; grey, bounded search or negative claim.

1. Tex. Bus. Orgs. Code Ann. § 21.552(a) (West 2025) (a shareholder “may not institute or maintain a derivative proceeding unless” the shareholder held shares at the time of the act or omission, fairly and adequately represents the corporation, and, for a listed corporation or an electing corporation with 500 or more shareholders, beneficially owns the number of shares the certificate of formation or bylaws require, not to exceed three percent of the outstanding shares; shares held by several shareholders may be aggregated under § 21.551(2)(C)). ↩
2. Gusinsky v. Reynolds, No. 3:25-cv-01816-K, ECF No. 52 (N.D. Tex. Mar. 17, 2026) (dismissing with prejudice a derivative suit by the holder of 100 Southwest Airlines shares under a three-percent bylaw; third-party copy of the order). ↩
3. Tooley v. Donaldson, Lufkin & Jenrette, Inc., 845 A.2d 1031, 1033, 1036 (Del. 2004) (direct or derivative turns on who suffered the harm and who would receive the remedy); Weinberger v. UOP, Inc., 457 A.2d 701, 703 (Del. 1983) (class action by cashed-out minority stockholders). ↩
4. Tex. Bus. Orgs. Code Ann. § 21.553(a) (West 2025) (“A shareholder may not institute a derivative proceeding until the 91st day after the date a written demand is filed with the corporation stating with particularity the act, omission, or other matter that is the subject of the claim or challenge and requesting that the corporation take suitable action.”); id. § 21.553(b) (waiting period ends on rejection or where irreparable injury would result). ↩
5. Tex. Bus. Orgs. Code Ann. § 21.563(a)–(d) (West 2025) (closely held corporation: fewer than 35 shareholders and no shares listed on a national securities exchange or regularly quoted in an over-the-counter market; §§ 21.552–.560 do not apply to a derivative proceeding against a present or former director, officer or shareholder; the court may treat such a proceeding as direct if justice requires, which creates no direct cause of action). ↩
6. United Food & Commercial Workers Union v. Zuckerberg, 262 A.3d 1034, 1059 (Del. 2021) (demand is excused if, for at least half of the demand board, a director received a material personal benefit, faces a substantial likelihood of liability, or lacks independence from someone who did). ↩
7. Tex. Bus. Orgs. Code Ann. § 21.554(a) (West 2025) (the determination how to proceed on a demand is made by a majority of the independent and disinterested directors, a committee of them, or a court-appointed panel); id. § 21.554(c), (f)–(i) (the corporation may petition for a determination of independence and disinterestedness; the court holds an evidentiary hearing “on or before the 45th day after the date the petition is filed,” and rules within 75 days, each “unless extended for good cause”; the determination is dispositive of that question absent facts not presented); id. §§ 21.555–.558 (dismissal on the corporation’s motion where the determination was made in good faith after reasonable inquiry, with the burden allocated by § 21.558(b)). ↩
8. Zapata Corp. v. Maldonado, 430 A.2d 779, 788–89 (Del. 1981) (two-step review of a special litigation committee’s motion to dismiss: independence, good faith and reasonable investigation, then the court’s own business judgment). ↩
9. Tex. Bus. Orgs. Code Ann. § 21.419(d) (West 2025) (“Neither a corporation nor any of the corporation’s shareholders has a cause of action against a director or officer of the corporation as a result of any act or omission in the person’s capacity as a director or officer unless: (1) the claimant rebuts one or more of the presumptions established by Subsection (c); and (2) it is proven by the claimant that: (A) the director’s or officer’s act or omission constituted a breach of one or more of the person’s duties as a director or officer; and (B) the breach involved fraud, intentional misconduct, an ultra vires act, or a knowing violation of law.”); id. § 21.419(f) (the circumstances constituting the fraud, intentional misconduct, ultra vires act or knowing violation of law must be stated “with particularity”). ↩
10. Tex. Bus. Orgs. Code Ann. § 21.419(c) (West 2025) (“In taking or declining to take any action on any matters of a corporation’s business, a director or officer is presumed to act: (1) in good faith; (2) on an informed basis; (3) in furtherance of the interests of the corporation; and (4) in obedience to the law and the corporation’s governing documents.”). Added by Act of May 14, 2025, 89th Leg., R.S., ch. 21 (S.B. 29), § 11, enrolled text, eff. May 14, 2025. ↩
11. Gearhart Indus., Inc. v. Smith Int’l, Inc., 741 F.2d 707, 719–21 (5th Cir. 1984) (applying Texas law: “[t]hree broad duties stem from the fiduciary status of corporate directors; namely, the duties of obedience, loyalty, and due care”; Texas courts “will not impose liability upon a noninterested corporate director unless the challenged action is ultra vires or is tainted by fraud”); In re Estate of Poe, 648 S.W.3d 277 (Tex. 2022) (slip op. at 15) (“A director’s fiduciary status creates three broad duties: duties of obedience, loyalty, and due care.”); Ritchie v. Rupe, 443 S.W.3d 856, 868 (Tex. 2014) (a director’s duty includes “the dedication of [their] uncorrupted business judgment for the sole benefit of the corporation”). ↩
12. Tex. Bus. Orgs. Code Ann. § 21.418(f) (West 2025) (listed or electing corporations: “Regardless of whether the conditions of Subsection (b) are satisfied, neither the corporation nor any of the corporation’s shareholders will have a cause of action against any director or officer for breach of duty with respect to the making, authorization, or performance of the contract or transaction because the director or officer had the relationship or interest described by Subsection (a) or took any of the actions authorized by Subsection (d) unless the cause of action is permitted by Section 21.419.”). ↩
13. Bounded public-web searches (Oct. 1, 2026, by the author and by two reviewers; no citator or docket search): no reported Texas appellate decision applying § 21.419 at any procedural stage, and none adopting Unocal or Revlon as the Texas standard, was located. The absence is a search result, not a holding. Three questions are unresolved: the interaction of § 21.419(f) with Tex. R. Civ. P. 91a; whether § 21.419(d)’s “cause of action” bar reaches pre-closing equitable relief against a director as well as damages; and whether “fraud in the transaction” in § 10.368 includes constructive fraud. ↩
14. Aronson v. Lewis, 473 A.2d 805, 812 (Del. 1984) (the business judgment rule “is a presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company”); Smith v. Van Gorkom, 488 A.2d 858, 872–73 (Del. 1985) (gross negligence is the standard for an uninformed decision); Brehm v. Eisner, 746 A.2d 244, 259 (Del. 2000). ↩
15. Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 361, 371 (Del. 1993) (once the plaintiff rebuts the business judgment presumption, the burden shifts to the directors to prove entire fairness). ↩
16. Del. Code Ann. tit. 8, § 144(a)–(c) (2025) (safe harbors for director or officer transactions, controlling-stockholder transactions, and going-private transactions; under (c)(1) a going-private needs both the committee and the conditioned disinterested vote, and under (c)(2) fairness is the alternative), amended by 85 Del. Laws ch. 6 (2025) (S.B. 21), eff. Mar. 25, 2025; id. § 144(d)(2) (exchange-independent directors presumed disinterested, rebuttable only by “substantial and particularized facts”); id. § 144(d)(5) (controller monetary liability limited to breach of loyalty, acts not in good faith, intentional misconduct, a knowing violation of law, or an improper personal benefit); id. § 144(d)(6) (preserving challenges under the statute, certificate or bylaws, equitable review of defensive devices, and knowing aiding-and-abetting claims). ↩
17. Del. Code Ann. tit. 8, § 102(b)(7) (2025) (exculpation of directors and officers for monetary damages, except for breach of the duty of loyalty, “acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law,” unlawful distributions, and an improper personal benefit; as to officers, not available “in any action by or in the right of the corporation”). ↩
18. Int’l Bankers Life Ins. Co. v. Holloway, 368 S.W.2d 567, 577 (Tex. 1963) (corporate fiduciaries held to “the extreme measure of candor, unselfishness, and good faith”; the fiduciary bears the burden of proving fairness); Kinzbach Tool Co. v. Corbett-Wallace Corp., 138 Tex. 565, 573–74, 160 S.W.2d 509, 514 (1942) (a fiduciary who takes a secret gift, gratuity or benefit in breach of the duty must account for it to the principal without proof of loss; the remedy follows a proven breach and benefit). ↩
19. Tex. Bus. Orgs. Code Ann. § 7.001(b)–(c) (West 2025) (certificate of formation may limit or eliminate a managerial official’s monetary liability to the organization or its owners, except for (1) a breach of the duty of loyalty, (2) an act or omission not in good faith that constitutes a breach of duty or involves intentional misconduct or a knowing violation of law, (3) a transaction yielding an improper benefit, or (4) liability expressly provided by statute: a list that overlaps the four § 21.419(d)(2)(B) grounds but is not the same list); amended by S.B. 2411, § 16, eff. Sept. 1, 2025 (“managerial official,” reaching officers as well as governing persons). ↩
20. Tex. Bus. Orgs. Code Ann. § 21.419(e) (West 2025) (presumptions “are in addition to any legal presumption arising under common law or this code” and “do not abrogate, preempt, or lessen any other defense, presumption, immunity, or privilege”); id. § 21.419(g) (section “does not limit the effectiveness or applicability of a provision contained in the certificate of formation . . . limiting monetary liability of a governing person”). ↩
21. Tex. Bus. Orgs. Code Ann. §§ 2.115–.116 (West 2025) (exclusive-forum and jury-waiver provisions in governing documents, as amended by S.B. 29). ↩
22. RBC Capital Mkts., LLC v. Jervis, 129 A.3d 816, 861–62 (Del. 2015) (slip op. at 95–98) (knowing participation in a board’s breach is aiding and abetting; the directors’ exculpation does not protect the aider and abettor). ↩