Texas Business Court Decision – January 29, 2026
No. 25-BC08A-0014 Michael E. Crain, etc., v. William Northern (Eighth Division, Judge Bullard) 25-bc08a-0014-crain-v-northern-2026-tex-bus-4.pdf
Company Agreements (Buy-Sell Agreements). Crain and Northern created a realty company and two property management subsidiaries in 2020, with each of them owning 50% of each entity; the entities are governed by Company Agreements, which contain mandatory buy-sell procedures for either man seeking to sell his or buy the other man’s membership in the the entities. In June 2025, Crain sued Northern, alleging he breached his fiduciary duties by acquiring a country club and adjacent property in breach of the “direct competition” clauses of the Company Agreements; Northern counterclaimed for specific performance and a declaratory judgment, claiming he had tendered a declaration to buy Crain out and that Crain had not assigned his shares to Northern as required by the provisions of the Company Agreements. Northern filed a motion seeking an order of specific performance, and Crain opposed the motion, arguing Northern had committed a breach of the Company Agreements with respect to the country club purchase and could not now enforce them.
Held: (1) once Northern submitted his offer notice to buy Crain out, Crain had 30 days to either sell his membership interests or notify Northern he elected to buy him out; he did not respond to the offer notice indicate whether he elected to sell or buy; when Northern delivered cashier’s checks to Crain in the amount prescribed by the offer notice, Crain refused to close on the purchase/sale and instead filed this suit; (2) the Company Agreements were valid and enforceable, and there could be no dispute about the terms of the mandatory buy-sell options; (2) Northern is entitled to specific performance under the express terms of the buy-sell option clauses; Northern complied with the terms of the clauses, and by failing to respond to Northern with his election, Crain intentionally forfeited his membership interest in each of their business entities, and he must sell his shares to Northern; (3) the closing documents shall reflect closing on December 19, 2024, as the Agreements called for closing within 90 days of the buy/sell offer; (4) the Agreements also set the procedure for determining fair value, and that determination should not include the value of the country club and related property Northern purchase ; (5) Crain’s allegation of unclean hands lacked sufficient summary judgment proof and failed to create a genuine issue of material fact; and (6) Northern is entitled to recover attorney’s fees with respect to this motion