Minority shareholders and LLC members have a statutory right to petition courts to appoint a receiver to rehabilitate a domestic entity (a corporation or LLC) under certain circumstances, including, but not limited to, where the owner or member of the closely held domestic entity establishes that “the actions of the governing persons of the entity are illegal, oppressive, or fraudulent” or “the property of the entity is being misapplied or wasted.” Tex. Bus. Orgs. Code § 11.404(a)(1)(C)(D) (appointment of receiver to rehabilitate domestic entity); See also Tex. Bus. Orgs. Code § 11.405 (appointment of receiver to liquidate domestic entity; liquidation).
If you believe that directors of your closely held corporation (fewer than 35 shareholders) or managers of your closely held LLC (fewer than 35 members) have engaged in these types of actions, or you or your corporation or LLC have been wrongly sued in an action for a receivership or involuntary liquidation, please contact Mr. Browning for a free phone consultation.