Texas Business Court Decision – April 9, 2026
No. 26-BC11A-0004 Energy Founders Fund, LP v. Philip Daskevich, et al. (Eleventh Div., Judge Stagner) 26-bc11a-0004-energy-founders-fund-v-daskevich-2026-tex-bus-17.pdf
Advancement of Defense Expenses/Contracts.
Background. Philip Daskevich was both a member of Gage Western (Gage) and a member of its board of directors. Gage’s Third Amended Company agreement was in effect during the events giving rise to this dispute and included provisions addressing both indemnification and advancement of defense expenses for directors; the Agreement imposed two conditions on advancement – the director had to agree in writing to repay any amounts ultimately determined not owed, and the board must determine the director is financially able to repay those amounts. The underlying dispute stems from the sale of Gage and the transfer of its membership units under the Third Amended Agreement’s drag-along provisions; a majority of the board approved the sale, but Daskevich opposed it. Plaintiff claimed he failed to transfer his units as required by the drag-along provisions, and it brought this suit against Daskevich and his spouse. On the same day plaintiff filed suit, Gage adopted a Fourth Amended Company Agreement, eliminating the board of directors and removing the indemnification and advancement provisions. Gage rejected Daskevich’s request that it advance his defense expenses per the terms of the Third Agreement. Gage now moves for advancement of his defense expenses.
Held: (1) advancement of the costs of defense is a separate contractual right, and courts enforce it according to its terms, without regard to the merits of the underlying claims and whether the member may later be required to repay the costs because the right to indemnification was not established;
(2) Which agreement governs? The Third Amended Agreement, because Daskevich’s advancement rights are determined by the contractual framework in place when the underlying conduct occurred, not by amendments adopted after the dispute had arisen; absent clear contractual language providing for retroactive application, a later agreement will not extinguish advancement rights tied to earlier conduct;
(3) Has Daskevich satisfied all conditions precedent to advancement of the costs? Yes, because: (a) he provided the written undertaking to repay any amounts advanced if it was later determined he was not entitled to indemnification; and (b) while he did not obtain the requisite board determination regarding his ability to pay, the board removed the only mechanism by which such a determination could be made when Gage adopted the Fourth Agreement and eliminated the board on the date the suit was filed; this is a legally sufficient excuse for Daskevich’s failure to comply with this requirement; Texas law does not permit a party to rely on the non-occurrence of a condition precedent that it has itself prevented to escape liability; when a party interferes with or disables the occurrence of a condition precedent, the condition is excused and deemed satisfied;
(4) Are the claims against Daskevich brought “by reason of” his status as a director? No. First, the court makes this determination based on the “eight corners” of the company agreement and the live pleading. Second, the text of the Third Agreement concerning advancement of costs is purposefully limited to expenses incurred in defense of any claim that may be subject to indemnification; the word ‘claim” is properly understood to be limited to the causes of action actually asserted in litigation. Third, looking to the claims of the petition, they are not brought by reason of Daskevich’s service as a director; they do not target conduct he undertook in his capacity as a director or in the discharge of director-level duties; instead, they arise from his alleged refusal, in his capacity as a member, to transfer – or to acknowledge transfer of – his ownership units as part of his ownership duties under the drag-along provisions; the sale had already obtained board approval when Daskevich refused to transfer his units; the sale closed, and this suit addressed Daskevich’s refusal, as an equity owner, to comply with his transfer obligations; the complained-about actions were not for his conduct as a director. Since the claims did not arise “by reason of” his status as a director, he had no contractual right to advancement of expenses.