Texas Business Court Decision – September 4, 2026

No. 26-BC04B-0009  John Parker, et al v. Lynzara-Austin Real Estate Management, LLC, et al. (Fourth Division, Judge Sharp) 2026 Tex. Bus. 62

Business Court Jurisdiction.

Background. This dispute arises from the breakdown of a longstanding business relationship between John Parker and Michael Shalit concerning the Tapatio Springs Golf Resort and related real-estate developments in Kendall County, Texas. Litigation began in Kendall County in 2012, and the 451st District Court of Kendall County placed the relevant business entries into receivership in 2018. The Kendall County court entered final judgment in the underlying suit earlier this year, and a severed portion of the suit is now on petition for review in the Texas Supreme Court. See, Shalit v. Tapatio Springs Real Estate Holdings, LP, No. 26-0328 (Tex. May 13, 2026). During the pendency of that appeal, plaintiffs sent notice removing Shalit as general partner of the business entities and moved in the Kendall County action to convert the existing receivership into a liquidating receivership. The Kendall County court denied the motion, without a written order, instead extending the existing receivership.

Plaintiffs then filed this new suit in the Business Court’s Fourth Division (Bexar County), seeking appointment of a liquidating receiver over three partnerships – Kendall County Development Company, Tapatio Springs Real Estate Holdings, and Tapatio Utility Holdings – along with an order directing their dissolution, winding up, and termination. Defendants challenged the Business Court’s subject-matter jurisdiction, and the court requested supplemental jurisdiction briefing. The court granted defendants’ plea to the jurisdiction in a written order signed August 31, and it now provides a fuller discussion of the issues.

Issues:

1. Whether the Business Court has subject-matter jurisdiction under Texas Government Code Chapter 25A and Texas Business Organizations Code Chapter 11 to appoint a liquidating receiver and order dissolution of partnerships already under an existing receivership in the Kendall County District Court; Held – No.
2. Whether Business Organizations Code Sec. 11.408(b)’s exclusive jurisdiction provision for courts that have appointed a receiver forecloses concurrent jurisdiction in the Business Court, notwithstanding Chapter 25A’s general grant of concurrent jurisdiction over actions otherwise within in a district court’s exclusive jurisdiction; Held- Yes; and
3. Whether the general receivership statute (Civil Practice & Remedies Code Sec. 64.001) or the parties’ contractual venue designation (Civil Practice & Remedies Code Sec. 15.035) supplies an alternative jurisdictional basis. Held -No.

Discussion:

1. Subject-matter jurisdiction. The court holds it lacks subject-matter jurisdiction and grants defendants’ plea to the jurisdiction. Under Business Organization Code Secs. 11.402(B) and 11.314, jurisdiction to appoint a receiver and to order a partnership’s involuntary winding up and termination lies in the district court of the county where the partnership’s registered office or principal place of business is located – here, Kendall County, which the court finds is undisputed based on plaintiffs’ own pleadings. Because Sec. 11.401 provides that a receiver may be appointed for a domestic entity “only as provided for and on the conditions set forth” in the Code, the Kendall County court’s 2018 appointment necessarily arose under this statutory scheme.
2. The Court then turns to Sec. 11.408(b) which grants “exclusive jurisdiction over the domestic entity and all of its property” to “a court that appoints a receiver” for that entity – a rule distinct from, and more stringent than, Chapter 25A’s general grant of concurrent jurisdiction over actions within a district court’s exclusive jurisdiction. Relying on the long-recognized in custodia legis doctrine (citing First S. Props., Inc. v. Vallone, 553 S.W.2d 229 (Tex. 1976) and Chimp Haven, Inc. v. Primarily Primates, Inc., 281 S.W.3d 629 (Tex. App. – San Antonio 2009, no pet.), the Court reasons that once a court appoints a receiver, that court’s exclusive jurisdiction persists – including through post-judgment and appellate proceedings – until the court relinquishes jurisdiction or discharges the receiver. Because the Kendall County receivership remains active and that court continues to exercise exclusive jurisdiction over it, the Kendall County district court is the sole court with jurisdiction over the partnerships, and the Business Court cannot derive concurrent jurisdiction because the Kendall County district court lies outside its Fourth Division operating territory.
3. The Court rejects plaintiffs’ reliance on the general receivership statute (Sec. 64.001), citing King Commodity Co. of Texas v. State, 508 S.W. 2d 439 [Tex. Civ. App. – Dallas, 1974, no writ) and In re Estate of Hallmark, 629 S.W. 3d 433 (Tex. App.-Eastland 2020, no pet.)], for the proposition that such general provisions must yield to the Business Organizations Code’s specific jurisdictional mandate for domestic entities. It likewise rejects reliance on Sec. 15.035’s contractual-venue provision, noting that venue and subject-matter jurisdiction are distinct concepts.

At the hearing on the matter, the court instructed plaintiffs to specify whether they elected to transfer to a court of proper jurisdiction or have the matter dismissed without prejudice – See 25A.006(b). Plaintiffs failed to specify an election, so the matter is dismissed without prejudice to refiling. Further, having determined the plea to the jurisdiction should be granted for the above-stated reasons, the Court need not reach defendants’ arguments about amount-in-controversy or their alternative request for a plea in abatement based on the dominant-jurisdiction doctrine.