In Re the Highland Dallas Foundation, Inc., the Highland Kansas City Foundation, Inc., and the Highland Santa Barbara Foundation, Inc. v. the State of Texas

• Court: Court of Appeals of Texas
• Decided: January 2, 2026
• Docket: 15-25-00221-CV
• Status: Published

Opinion

ACCEPTED 15-25-00221-CV FIFTEENTH COURT OF APPEALS AUSTIN, TEXAS 1/2/2026 4:44 PM NO. 15-25-00221-CV CHRISTOPHER A. PRINE CLERK COURT OF APPEALS FILED IN 15th COURT OF APPEALS for the AUSTIN, TEXAS FIFTEENTH DISTRICT OF TEXAS 1/2/2026 4:44:43 PM AUSTIN, TEXAS CHRISTOPHER A. PRINE Clerk

In re The Highland Dallas Foundation, Inc., The Highland Kansas City Foundation, Inc., and the Highland Santa Barbara Foundation, Inc.,

Relators

Original Proceeding from Cause No. 25-BC01B-0027 in the Business Court of the State of Texas, First Division Hon. William Whitehill, Presiding Judge

RESPONSE TO PETITION FOR WRIT OF MANDAMUS

Brian P. Shaw Texas Bar No. 24053473 Email: bshaw@ccsb.com Kenneth Carroll Monica E. Gaudioso Andrea C. Reed Emily H. Owen CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P. 901 Main Street, Suite 5500 Dallas, Texas 75202 (214) 855-3000 – Telephone (214) 580-2641 – Facsimile

ATTORNEYS FOR REAL PARTIES IN INTEREST TABLE OF CONTENTS Table of Contents ...................................................................................... 2 Table of Authorities ................................................................................... 4 Record Citations and Definitions .............................................................. 8 Supplement to Statement of Issues Presented ......................................... 9 Summary of Response ............................................................................. 10 Supplement to Statement of Facts ......................................................... 13 A. Factual Background .................................................................. 13 B. Procedural History .................................................................... 18 Argument ................................................................................................. 22 A. Mandamus is unavailable when an order could be upheld on any ground supported by the record before the trial court. ............ 22 B. The trial court did not abuse its broad discretion in finding DAF HoldCo is a necessary party .................................................... 24 1. The Dondero Organizations fail to address every basis for abatement under the trial court record; so the Court should deny mandamus without going further. ............................................... 30 2. The trial court had discretion to determine DAF HoldCo is a necessary party under Rule 39(a)(1). ........................................... 32 a. The trial court correctly characterized the Dondero Organizations’ claims as derivative. ......................................... 32 b. The trial court also had discretion to determine that DAF HoldCo is a necessary party under Rule 39(a)(1) because complete relief cannot be afforded by the current defendants. 40 c. The trial court also had discretion to find DAF HoldCo is a necessary party under Rule 39(a)(2). ........................................ 42 C. The trial court acted within its broad discretion in abating this case. .................................................................................................. 47 D. Why do the Dondero Organizations refuse to add DAF HoldCo as a party? ........................................................................................ 48 Prayer ...................................................................................................... 49 Rule 52.3(j) Certification ......................................................................... 51

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 2 Certificate of Compliance ........................................................................ 51 Certificate of Service ............................................................................... 52

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 3 TABLE OF AUTHORITIES Cases Page(s)

In re Aleman, No. 15-25-00099-CV, 2025 WL 1710793 (Tex. App.—15th Dist.] June 19, 2025, orig. proceeding) (per curiam) .......................... 23

April Sound Mgmt. Corp. v. Concerned Prop. Owners for April Sound, Inc., 153 S.W. 3d 519 (Tex. App.—Amarillo 2004, no pet.) ........................ 47

Associated Bankers Credit Co. v. Meis, 456 S.W.2d 744 (Tex. App.—Corpus Christi 1970, no writ) .............. 46

Atlas IDF, LP v. NexPoint Real Estate Partners, LLC, et al., Cause No. 25-BC01B-004 (Tex. Bus. Ct., 1st Div. Dec. 8, 2025) .................................................................................................... 14

In re Austin Hous. Fin. Corp., No. 03-22-00091-CV, 2022 WL 2960796 (Tex. App.— Austin July 27, 2022, orig. proceeding) (mem. op.) ............................ 27

Brown v. Snider Industries, LLP, 528 S.W.3d 620 (Tex. App.—Texarkana 2017, pet. denied) ........ 25, 47

In re Cerberus Capital Mgmt., L.P., 164 S.W.3d 379 (Tex. 2005) (orig. proceeding) ................................... 24

Conrad Const. Co., Ltd v. Freedmen’s Town Preservation Coalition, 491 S.W.3d 12 (Tex. App.—Houston [14th Dist.] 2016)..................... 25

Cooper v. Tex. Gulf Indus., Inc., 513 S.W.2d 200 (Tex. 1974) ................................................................ 25

Crawford v. XTO Energy, Inc., 509 S.W.3d 906 (Tex. 2017) .................................................... 26, 27, 44

CSR Ltd. v. Link, 925 S.W.2d 591 (Tex. 1996) ................................................................ 23

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 4 Dondero v. Jernigan, No. 24-10287, 2025 WL 1122466 (5th Cir. Apr. 16, 2025) ................. 49

Doty v. Davidson, No. 04-20-00583-CV, 2022 WL 2334547 (Tex. App.—San Antonio June 29, 2022, pet. denied) ................................................... 26

Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238 (Tex. 1985) ................................................................ 23

In re East Tex. Medical Center, 714 S.W.3d 111 (Tex. App.—Tyler 2023, orig. proceeding) ............... 22

Feiner Family Trust v. VBI Corp., No. 07 Civ.1914, 2007 WL 2615448 (S.D.N.Y. Sep. 11, 2007) .............................................................................................. 38, 39

In re Harbinger Capital Partners Funds Investor Litigation, 2013 WL 7121186 (S.D.N.Y. Dec. 16, 2013) ........................... 33, 35, 40

Heard v. Moore, 101 S.W. 3d 726 (Tex. App.—Texarkana 2003, pet. denied) ............. 47

Henderson v. Gordon, No. 01-16-01007-CV, 2018 WL 3848777 (Tex. App.— Houston [1st Dist.] Aug. 14, 2018, no pet.) ........................................ 44

In re Highland Capital Mgmt., L.P., No. 19-34054-SGJ-11, 2023 WL 2395677 (Bankr. N.D. Tex. Mar. 6, 2023) ......................................................................... 10, 15

In re Highland Capital Mgmt., L.P., No. 19-34054-SGJ11, 2021 WL 3418657 (Bankr. N.D. Tex. Aug. 4, 2021), vacated and remanded sub nom. Matter of Highland Capital Mgmt., L.P., 98 F.4th 170 (5th Cir. 2024) .................................................................................................... 13

In re Highland Capital Mgmt., L.P., No. 19-34054-SGJ11, 2022 WL 3959550 (Bankr. N.D. Tex. Aug. 30, 2022) ..................................................................................... 15

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 5 In re Indep. Fuel Sys. LLC, 655 B.R. 322 (Bankr. E.D. Tex. 2023) ................................................ 45

KCM Fin. LLC v. Bradshaw, 457 S.W.3d 70 (Tex. 2015) .................................................................. 45

Lee v. Ty Equity Grp., Inc., No. CIV. A. 3:01-CV-0253, 2001 WL 1401395 (N.D. Tex. Nov. 8, 2001) ....................................................................................... 32

Long v. Lopez, 115 S.W.3d 221 (Tex. App.—Fort Worth 2003, no pet.) ..................... 44

Longoria v. Exxon Mobil Corp., 255 S.W.3d 174 (Tex. App.—San Antonio 2008, pet. denied) ............................................................................... 25, 30, 44, 47

Munters Corp. v. Locher, 936 S.W.2d 494 (Tex. App.—Houston [14th Dist.] 1997, writ denied) ......................................................................................... 43

In re Occidental West Texas Overthrust, Inc., 626 S.W.3d 395 (2021) .................................................................. 26, 44

Peskin v. Anderson, [2001] 1 B.C.L.C. 372 .................................................................... 38, 39

Pierce v. Blalack, 535 S.W.3d 35 (Tex. App.—Texarkana 2017, no pet.) ....................... 25

In re Prudential Ins. Co. of Am., 148 S.W.3d 124 (Tex. 2004) ................................................................ 23

Ring & Ring v. Sharpstown Mall Tex., LLC, No. 01-16-00341-CV, 2017 WL 3140121 (Tex. App.— Houston [1st Dist.] July 25, 2017, no pet.) ......................................... 41

Royal Petroleum Corp. v. Dennis, 332 S.W.2d 313 (Tex. 1960) ................................................................ 32

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 6 In re State Farm Lloyds, 520 S.W.3d 595 (Tex. 2017) (orig. proceeding) ............................. 23, 24

In re Stevens, 971 S.W.2d 757 (Tex. App.—Beaumont 1998, orig. proceeding) .......................................................................................... 22

In re Sting Soccer Group, LP, No. 05-17-00317-CV, 2017 WL 5897454 (Tex. App.— Dallas Nov. 30, 2017, orig. proceeding) ........................................ 23, 24

In re TCW Project Fund II, Ltd., 274 S.W.3d 166 (Tex. App.—Houston [14th Dist.] 2008, orig. proceeding) .................................................................................. 31

Tianrui (Int’l) Holding Co. Ltd. v. China Shanshui Cement Grp. Ltd.,[2024] UKPC 36 ................................................ 34, 35, 36, 37

Matter of Tr. A & Tr. C. Established Under Bernard L. & Jeannette Fenenbock Living Tr. Agreement, Dated March 12, 2008, 690 S.W.3d 80 (Tex. 2024) .................................................................. 42

In re Travelers Prop. Casualty Co. of America, 485 S.W.3d 921 (Tex. App.—Dallas 2016, orig. proceeding).. 22, 31, 43

Walker v. Packer, 827 S.W.2d 833 (Tex. 1992) .......................................................... 23, 24

Statutes

11 U.S.C. § 1515 ...................................................................................... 18

Other Authorities

FED. R. CIV. P. 19 ..................................................................................... 32

TEX. R. CIV. P. 93(1) ................................................................................. 19

TEX. R. APP. P. 52.3 ............................................................................ 13, 14

TEX. R. CIV. P. 39 ............................................................................. passim

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 7 RECORD CITATIONS AND DEFINITIONS

The Mandamus Record is cited as “MR[page number].”

“Charitable DAF” means collectively the Real Parties in Interest, DFW Charitable Foundation, CDMCFAD, LLC, Charitable DAF GP, LLC, and CDH GP, Ltd. (each a “Charitable DAF Entity”), and Mark Patrick.

“Dondero” means James Dondero.

“DAF HoldCo” means Charitable DAF HoldCo, Ltd.

“Dondero Organizations” means Relators.1

“Fund” means Charitable DAF Fund, L.P.

“Patrick” means Defendant Mark Patrick.

“Petition” means the Dondero Organizations’ Petition for Writ of Mandamus.

“JOLs” means the Joint Official Liquidators appointed by the Grand Court of the Cayman Islands to manage the winding up of DAF HoldCo.

1 The Dondero Organizations complain about the Charitable DAF’s use of this term

to describe them. MR0443. The Charitable DAF uses this term not as “ad hominem framing,” but instead because it is the most accurate description of the Relators. Id. (emphasis in original). To be clear, none of the Dondero Organizations are themselves “charities” as they euphemistically define themselves in the Petition. Petition p. 4. Instead, they are entities created by Dondero—hence the “Highland” moniker—and Dondero sits on the board of directors of each. MR0227. Dondero admits under oath he is personally funding this litigation Id. For all intents and purposes, Dondero is the Relator.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 8 SUPPLEMENT TO STATEMENT OF ISSUES PRESENTED

The Dondero Organizations’ Statement of Issues Presented

incorrectly limits mandamus consideration of the abatement order to the

trial court’s order that specifically addresses one discrete issue raised by

the Dondero Organizations in their request for reconsideration of the

abatement and joinder order. Under the well-recognized standard of

review on mandamus, the following issue is presented by the Petition:

• Whether the trial court had discretion to abate the case on any ground supported by the record?

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 9 SUMMARY OF RESPONSE

At its core, this is a dispute for control over the Charitable DAF

between James Dondero, who seeks to exercise de facto control, and Mark

Patrick and Paul Murphy, who exercise de jure control under the various

governing documents. Manufactured, years-old allegations of

wrongdoing and worldwide litigation are about one thing: Dondero’s

attempt to control the assets of the Charitable DAF, which he considers

his own. See In re Highland Capital Mgmt., L.P., No. 19-34054-SGJ-11,

2023 WL 2395677, at *10 (Bankr. N.D. Tex. Mar. 6, 2023).

Here, the Dondero Organizations refuse to take the simple steps

necessary to comply with the trial court’s modest order requiring the

joinder of necessary parties and abatement pending their joinder,

pursuant to TEX. R. CIV. P. 39(a). Instead, they request extraordinary

mandamus relief second-guessing the trial court’s exercise of its broad

discretion on party-joinder decisions. The Dondero Organizations’ refusal

even to attempt to comply with the abatement order—and instead to seek

to have this Court overturn it—speaks volumes.

The Dondero Organizations take a two-step approach predicated

on ignoring applicable law. First, they ignore the standards under

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 10 Rule 39 to argue the trial court was required to take the Dondero

Organizations’ live pleading as true on issues of joinder. Second, they

ignore the mandamus standard and attempt to confine the trial court’s

entire ruling—and this Court’s scope of review—to the limited

reconsideration grounds the Dondero Organizations raised after the

trial court’s original ruling. But the trial court never stated that its

joinder and abatement ruling was predicated solely on the grounds

addressed on reconsideration, and the Dondero Organizations’ attempt

to divine such a restrictive intention is presumptuous and improper.

Mandamus must not issue if any ground in the record supports the

trial court’s exercise of its discretion to abate. The trial court had ample

basis to order joinder and to abate, and the Dondero Organizations did

not defeat, or even attempt to defeat, each basis as a matter of law. To

use a bowling analogy, to obtain extraordinary mandamus relief, the

Dondero Organizations needed to knock down every pin, not just one.

The inquiry should end there—mandamus denied.

Even if this Court inappropriately limited itself to the “one pin”

raised by the Dondero Organizations, mandamus should still be denied

because the trial court acted within its discretion in finding that the

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 11 claims the Dondero Organizations attempt to raise are derivative

claims and that DAF HoldCo, therefore, is a necessary party.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 12 SUPPLEMENT TO STATEMENT OF FACTS

The Dondero Organizations’ “Statement of Facts” is improperly

argumentative (see TEX. R. APP. P. 52.3(g)) and states hotly contested

allegations as “fact” that are vehemently denied in the underlying

litigation. But as most of the alleged “facts” are not relevant to this

mandamus proceeding, the Charitable DAF will not divert the Court’s

attention by engaging in a point-by-point rebuttal. However, the

Dondero Organizations omit key information that is relevant to this

mandamus proceeding.

A. Factual Background

Although the Petition notably fails to mention Dondero once,

Dondero is funding this litigation. MR0227. He also funds the JOLs, who

were appointed to manage the winding up of DAF HoldCo in the Cayman

Islands. MR1672-73. Dondero originally set up the Charitable DAF for

“efficient management” such that power over it was “concentrated in one

person.” MR0016. Initially Dondero put Grant Scott in place, “Dondero’s

long-time friend, college housemate, and best man at his wedding” who

later “resigned from that role [] after apparent disagreements with Mr.

Dondero.” MR0349-50 (quoting In re Highland Capital Mgmt., L.P., No.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 13 19-34054-SGJ11, 2021 WL 3418657, at *1 (Bankr. N.D. Tex. Aug. 4,

2021), vacated and remanded sub nom. Matter of Highland Capital

Mgmt., L.P., 98 F.4th 170 (5th Cir. 2024)). Now the control person is

Patrick, who was not “Dondero’s long-time friend.” MR0350. Instead,

Patrick is a tax advisor who Dondero swore is “well-qualified tax

counsel.” MR0019; see also MR0227.

Patrick is not in sole control of the Charitable DAF—he ceded

partial control to “a person named Paul Murphy based in the Cayman

Islands ….” MR0222. So two individuals currently control the Charitable

DAF. Id.

Dondero swears that Patrick “became openly hostile towards the

Charities, my affiliated companies, and me.” MR0227. It is true that,

among other things, entities controlled by the Charitable DAF asked

Dondero to pay on substantial obligations—and Dondero refused.

MR0350 (citing, e.g., Atlas IDF, LP v. NexPoint Real Estate Partners,

LLC, et al., Cause No. 25-BC01B-004 (Tex. Bus. Ct., 1st Div. Dec. 8, 2025)

(judgment entered against Dondero entity for ~$14.6M)).2 And the

2 Atlas is not owned by Charitable DAF. MR0351. A Charitable DAF subsidiary is the

investment manager of Atlas. Id.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 14 Dondero Organizations accurately allege that “communications between

Mr. Patrick … and [Dondero] began to become less frequent.” MR0222.

That was Patrick and Paul Murphy fortifying the independence of the

Charitable DAF. Id.

For example, NexPoint is Dondero’s newest “alternate investment

firm,” after Highland Capital Management, L.P. (“Highland”), his former

alternative investment firm, was forced to file bankruptcy. MR0351

(citing Highland Capital, 116 F.4th at 429); MR0218. As Dondero notes

in his Declaration, at one point “NexPoint provided, without charge,

investment ideas to” the Charitable DAF. MR0222. In the best interests

of the Charitable DAF, the Charitable DAF no longer accepts Dondero’s

“investment ideas,” i.e., investing in Dondero’s deals. MR0222; MR0352.

In addition, Patrick resigned from his position at Skyview, “a service

organization that provided support primarily to Mr. Dondero and entities

in which Mr. Dondero had an interest.” MR0020; MR0352 (citing In re

Highland Capital Mgmt., L.P., No. 19-34054-SGJ11, 2022 WL 3959550,

at *16 (Bankr. N.D. Tex. Aug. 30, 2022) (“Skyview being owned and

operated by individuals previously employed by Highland”)).

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 15 Patrick had no legal obligation to work for Dondero’s companies, or

to accept their services on behalf of the Charitable DAF, or to have the

Charitable DAF make investments in Dondero’s self-interested

transactions, i.e., his “investment ideas.” MR0222; MR0352.

The Dondero Organizations allege that the Defendants stole $270

million in assets owned by the Charitable DAF Fund, a non-party.

MR0020. Another non-party, DAF HoldCo, a Cayman company, was the

limited partner of the Fund. MR0058; MR1788. DAF HoldCo was

entitled to discretionary distributions from the Fund as determined by

the Fund’s general partner in its sole discretion. MR0066; MR0355.

The Dondero Organizations each held only “Participating Shares”

in DAF HoldCo. MR0015. The Participating Shares are non-voting, non-

redeemable shares that entitled the Dondero Organizations to

discretionary dividends (which came from DAF HoldCo’s discretionary

distributions from the Fund) as determined by the “Control Position”3

of DAF HoldCo in its sole discretion. MR0080; MR0082-84; MR0360.

The Participating Shares did not confer any right to be given notice of,

3 At most times relevant to this mandamus petition, Defendant Mark Patrick was the

Control Position of DAF HoldCo. MR0222. The Control Position holds the Management Shares of DAF HoldCo. MR0219-20.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 16 vote at, or be present at any general meetings of DAF HoldCo. MR0084.

Instead, such rights only lie with the directors and the holders of the

Management Shares. MR0089-92.

The Dondero Organizations allege that Defendants diluted the

value of their Participating Shares in DAF HoldCo by stealing $270

million in assets belonging to the Charitable DAF Fund. MR0025;

MR0032.

Prior to the filing of the underlying lawsuit, DAF HoldCo was

placed in voluntary liquidation proceedings in the Grand Court of the

Cayman Islands (the “Cayman Proceeding”). MR0027. The Dondero

Organizations later filed an involuntary Petition for Winding Up DAF

HoldCo in that same court. MR0028. And as they note, the Dondero

Organizations “alleged essentially the same facts recounted in this

[lawsuit] before the Grand Court.” MR0028. The proceedings in the

Cayman Islands culminated in the appointment of Joint Official

Liquidators (“JOLs”). MR0029. The JOLs are already empowered to

wind up DAF HoldCo and distribute its assets, if any. MR0374. The

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 17 JOLs are also currently seeking foreign recognition under Chapter 15

in the U.S. Bankruptcy Court in Delaware.4 MR0725.

B. Procedural History

Defendants filed a Supplemental Brief and Alternative Motion to

Abate challenging capacity and the lack of necessary parties on

August 11, 2025. MR1121-47. They asserted that DAF HoldCo (which

would participate in any litigation through the JOLs) is a required party

under TEX. R. CIV. P. 39(a) on four independent grounds:

1. the Dondero Organization’s claims are derivative, making

DAF HoldCo a necessary party under Rule 39(a)(1), MR1138;

2. the Dondero Organizations pray for relief that can only be

afforded to them by DAF HoldCo, making DAF HoldCo a

necessary party under Rule 39(a)(1), MR1138;

3. DAF HoldCo claims an interest and is situated such that

disposition of this action without it as a practical matter

impairs or impedes its ability to protect that interest, making

4 A Chapter 15 recognition petition is a filing by a foreign representative in a U.S.

bankruptcy court seeking recognition of a foreign insolvency proceeding. 11 U.S.C. § 1515.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 18 DAF HoldCo a necessary party under Rule 39(a)(2)(i),

MR1140; and

4. DAF HoldCo’s absence leaves the Defendants who are

already parties subject to a substantial risk of incurring

double, multiple, or otherwise inconsistent obligations under

Rule 39(a)(2)(ii) if relief is entered in Texas that conflicts

with the JOLs’ positions or the Cayman court’s directives,

MR1140.

Based on those joinder predicates, the Charitable DAF asked the court

to abate and require joinder of DAF HoldCo. MR1144.

On September 18, 2025, the trial court denied dismissal on

standing and statutory jurisdiction grounds, reserved a ruling on

capacity because no verified denial was filed under Rule 93(1), and held

that the JOLs are necessary parties under Rule 39(a), that they are not

parties to the lawsuit, and that the court cannot provide complete relief

in their absence. MR1836-38. The trial court abated the case until DAF

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 19 HoldCo (through the JOLs)5 became parties, voluntarily or

involuntarily, and required leave of court for further filings. MR1838.

On October 22, 2025, the Dondero Organizations sought leave to

move for reconsideration of the “complete relief” ruling. MR1841. The

motion focused on two points: first, that Rule 39(a)(1) confines the

complete‑relief inquiry to relief between existing parties and the court

therefore erred in treating effects on DAF HoldCo, a non-party, as a

barrier to proceeding; and second, that their claims are direct under

Cayman law, so DAF Holdco is not a required party, or, alternatively,

that the court should proceed in equity under Rule 39(b) even if

Rule 39(a) were implicated. MR1849-53.

On October 31, 2025, the court granted leave, deemed the

reconsideration motion filed, and denied it. MR1856-58. In denying

reconsideration, the court noted that in granting the abatement, it had

rejected plaintiffs’ premise that the claims are direct and determined

that, under Cayman law, the claims are derivative. MR1857-58. The

5 For purposes of joinder, the JOLs and DAF HoldCo are one and the same as the

JOLs are currently the only persons authorized to participate in litigation on behalf of DAF HoldCo. For the sake of brevity and clarity, the necessary party is referred to as DAF HoldCo in this Response.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 20 trial court in no way cabined its entire abatement order to the

direct/derivative determination. MR1836-38; MR1856-58.

The Dondero Organizations inexplicably have never even

attempted to add DAF HoldCo as a party or sought to explain to the

trial court why they could not. MR1866-68. Instead, a month after the

trial court denied reconsideration, the Dondero Organizations filed the

Petition, seeking mandamus from this Court. See Petition.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 21 ARGUMENT

A. Mandamus is unavailable when an order could be upheld on any ground supported by the record before the trial court.

When considering a petition for a writ of mandamus, the appellate

court must “focus on the result reached by the trial court rather than

its reasons.” In re East Tex. Medical Center, 714 S.W.3d 111, 114 (Tex.

App.—Tyler 2023, orig. proceeding) (quoting In re Stevens, 971 S.W.2d

757, 760 (Tex. App.—Beaumont 1998, orig. proceeding)). This is “because

a trial court cannot abuse its discretion if it reaches the right result for

the wrong reason”; an appellate court must therefore uphold an order

“on any grounds supported by the record before the trial court.” In re

Travelers Prop. Casualty Co. of Am., 485 S.W.3d 921, 925 (Tex. App.—

Dallas 2016, orig. proceeding); see also In re East Tex. Medical Center,

714 S.W.3d at 114 (“If the trial court expresses an incorrect

legal reason for its ruling, we will nevertheless uphold the order on any

other grounds supported by the record.”). That is to say, the Dondero

Organizations must demonstrate the trial court had no discretion to

grant abatement as to every ground supported by the record, not just

every ground mentioned in the abatement order. They fail to do so.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 22 “Mandamus is an ‘extraordinary’ remedy that is ‘available only in

limited circumstances’ ... ‘to correct a clear abuse of discretion.’” CSR

Ltd. v. Link, 925 S.W.2d 591, 596 (Tex. 1996) (quoting Walker v. Packer,

827 S.W.2d 833, 840 (Tex. 1992)). “Mandamus … will issue only if (1)

the trial court clearly abused its discretion and (2) the party requesting

mandamus relief has no adequate remedy by appeal.” In re Aleman, No.

15-25-00099-CV, 2025 WL 1710793, at *1 (Tex. App.—15th Dist. June

19, 2025, orig. proceeding) (per curiam) (citing In re Prudential Ins. Co.

of Am., 148 S.W.3d 124, 135–36 (Tex. 2004)).

A trial court abuses its discretion when it acts without reference to

any guiding rules or principles or when it acts in an arbitrary or

unreasonable manner. Downer v. Aquamarine Operators, Inc., 701

S.W.2d 238, 241-42 (Tex. 1985). Mandamus is appropriate only when

this Court determines that the district court “could have reached only

one conclusion and that a contrary finding is thus arbitrary and

unreasonable.” In re Sting Soccer Group, LP, No. 05-17-00317-CV, 2017

WL 5897454, at *5 (Tex. App.—Dallas Nov. 30, 2017, orig. proceeding)

(quoting In re State Farm Lloyds, 520 S.W.3d 595, 604 (Tex. 2017) (orig.

proceeding)).

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 23 “[A]n appellate court may not substitute its judgment for the trial

court’s determination of factual or other matters committed to the trial

court’s discretion, even if the mandamus court would have decided the

issue differently.” Id. (citing State Farm Lloyds, 520 S.W.3d at 604).

Vacating an abatement order on mandamus, therefore, is only

appropriate to correct a clearly “arbitrary and unreasonable” decision

made by the trial court—i.e., when it “could reasonably have reached

only one decision,” and did not. Walker, 827 S.W.2d at 840; see In re

Cerberus Capital Mgmt., L.P., 164 S.W.3d 379, 382 (Tex. 2005) (orig.

proceeding).

B. The trial court did not abuse its broad discretion in finding DAF HoldCo is a necessary party.

The Dondero Organizations do not overcome the heavy burden to

demonstrate entitlement to mandamus relief—i.e., they cannot show

that the trial court was left with “only one conclusion” on whether

abatement was warranted. Sting Soccer, 2017 WL 5897454 at *5.

Under Rule 39(a), for a just adjudication, a party shall “be joined as a

party” if:

(1) in his absence complete relief cannot be accorded among those already parties, or

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 24 (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest....

TEX. R. CIV. P. 39(a). If a necessary party has not been joined, a court

“shall order” it to be made a party. TEX. R. CIV. P. 39(a)(2)(ii). The proper

procedure is to abate the case until the necessary party has been joined.

Longoria v. Exxon Mobil Corp., 255 S.W.3d 174, 180 (Tex. App.—San

Antonio 2008, pet. denied).

“Although Rule 39 provides for joinder in mandatory terms, ‘there

is no arbitrary standard or precise formula for determining whether a

particular person falls within its provision.’” Brown v. Snider Indus.,

LLP, 528 S.W.3d 620, 625 (Tex. App.—Texarkana 2017, pet.

denied) (quoting Cooper v. Tex. Gulf Indus., Inc., 513 S.W.2d 200, 204

(Tex. 1974)). Instead, “[t]rial courts have broad discretion in matters

involving joinder of parties.” Pierce v. Blalack, 535 S.W.3d 35, 41 (Tex.

App.—Texarkana 2017, no pet.); see also Conrad Const. Co., Ltd v.

Freedmen’s Town Preservation Coalition, 491 S.W.3d 12, 16 (Tex. App.—

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 25 Houston [14th Dist.] 2016). This Court “review[s] a trial court’s rulings

on issues concerning joinder for an abuse of discretion.” Crawford v. XTO

Energy, Inc., 509 S.W.3d 906, 911 (Tex. 2017).

The Dondero Organizations cite a San Antonio Court of Appeals

case to argue its “pleadings must be taken as true at this stage.” Petition

p. 41 (citing Doty v. Davidson, No. 04-20-00583-CV, 2022 WL 2334547, at

*5 (Tex. App.—San Antonio June 29, 2022, pet. denied)). Doty concerned

capacity and standing, rather than joinder—the Dondero Orginizations

misstate the law vis-à-vis joinder. Indeed, courts consistently hold that a

determination under Rule 39 is evidentiary. See e.g., Crawford, 509

S.W.3d at 913 (noting evidence of an actual claimed interest in the

lawsuit’s subject matter was required to support a finding that a party

was necessary under Rule 39(a)(2)). And because the determination

whether parties are necessary under Rule 39 is “an evidentiary issue for

the trial court,” a party seeking mandamus relief must show that “the

evidence before the trial court dictated only one possible outcome as a

matter of law.” In re Occidental West Texas Overthrust, Inc., 626 S.W.3d

395 (2021).

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 26 The Dondero Organizations ignore the evidentiary nature of a

joinder decision in an attempt to cast the trial court’s decision as a non-

discretionary interpretation of law. See Petition pp. 22-24. In support, the

Dondero Organizations cite In re Austin Hous. Fin. Corp., No. 03-22-

00091-CV, 2022 WL 2960796 (Tex. App.—Austin July 27, 2022, orig.

proceeding) (mem. op.). Petition p. 23. But Austin does not stand for the

proposition that a trial court lacks broad discretion in decisions of joinder.

Instead, Austin merely demonstrates that a court lacks discretion to find

joinder of a party mandatory under Rule 39 where no evidence in the

record supports that decision. 2022 WL 2960796 at *3-4. There, a party

sought abatement on the grounds that non-parties claimed an interest in

the subject of the action. Id. at *2. The party seeking abatement therefore

was required to “show through ‘record evidence’ that each of the alleged

necessary parties had an actual, claimed interest—not just a potential

interest—in the [real property that was the] subject matter of the action.”

Id. (citing Crawford, 509 S.W.3d at 913). But the evidence was only a

single plat map that “at most … suggest[ed] that the other lot owners

may potentially claim an interest in the subject of th[e] action.” Id. at *3.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 27 The Dondero Organizations do not argue the evidence presented in

the trial court, including corporate governance documents and pleadings

in the Cayman Proceeding, was insufficient to support abatement. That

is because it was.

The evidence in this record demonstrates the Dondero

Organizations allege an injury that they do not own. The $270 million in

allegedly stolen assets belong to the Fund. MR0010. DAF HoldCo is the

limited partner of the Fund. MR0058; MR1788. The Dondero

Organizations own only Participating Shares in DAF HoldCo. MR0015;

MR0155-56. The Participating Shares confer no right to control any

action or decision of DAF HoldCo. MR0084. Nor can the Dondero

Organizations redeem their shares. MR0080. Instead, the Participating

Shares entitle the Dondero Organizations to distributions made at the

sole discretion of DAF HoldCo’s Control Person MR0096. In that vein,

there is no limitation on the number of organizations that could own

Participating Shares in DAF HoldCo, and the Control Position can

change the benefiting organizations with no input from or notice to the

Dondero Organizations. MR0082; MR0086-87. The Dondero

Organizations, as mere holders of Participating Shares, had no right to

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 28 control DAF HoldCo in any way, only “rights in a winding-up or

repayment of capital” or to participate in the profits. MR0084.

The evidence in this record also shows that the relief requested by

the Dondero Organizations cannot be provided without DAF HoldCo—a

separate ground under the joinder rules that the Dondero Organizations

ignore. The Dondero Organizations ask for relief that includes enjoining

the Charitable DAF from disposing of, transferring, encumbering, or

dissipating any “Charitable DAF Fund and DAF HoldCo assets” and

ordering the Charitable DAF to reverse prior actions. MR0043; MR0436.

But as the evidence demonstrates, only DAF HoldCo has the authority to

take these actions. MR0066; MR0071-104; MR0252-54.

As discussed in greater detail below, the evidence in this record

gives ample support to determinations that the Dondero Organizations’

claims are derivative and that the trial court could not grant complete

relief without DAF HoldCo.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 29 1. The Dondero Organizations fail to address every basis for abatement under the trial court record; so the Court should deny mandamus without going further.

In the trial court, the Charitable DAF argued DAF HoldCo is a

necessary party warranting abatement under Rule 39(a) for each of the

following, independent reasons:

1. The Dondero Organization’s claims are derivative, making DAF HoldCo a necessary party under Rule 39(a)(1), MR1138;

2. The Dondero Organizations pray for relief that can only be afforded to them by DAF HoldCo, making DAF HoldCo a necessary party under Rule 39(a)(1), MR1138;

3. DAF HoldCo claims an interest and is situated such that disposition of this action without it as a practical matter impairs or impedes its ability to protect that interest, making DAF HoldCo a necessary party under Rule 39(a)(2)(i), MR1140; and

4. DAF HoldCo’s absence leaves the Defendants who are already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations, MR1140, see Rule 39(a)(2)(ii).

The Petition only addresses the first two grounds listed above. But

the other two grounds are independently sufficient to support

abatement. See e.g., Longoria, 255 S.W.3d at 180 (approving of trial

court’s abatement and later dismissal based on failure to join party

necessary under Rule 39(a)(2)). And any additional ground supported by

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 30 the record is sufficient to deny mandamus. See In re Travelers Prop.

Casualty Co. of America, 485 S.W.3d at 925.

The Dondero Organizations attempt to dodge this mandamus

maxim by claiming to divine, and cabin, the trial court’s ruling on

abatement to one basis only. Petition p. 23 (“Since the trial court gave a

clear, narrow, and defined legal basis for the abatement, based on a

discrete construction of Cayman law, the abatement order is an abuse of

discretion if the trial court’s construction of Cayman law as applied to

the Charities’ claims is wrong.”). They cite no authority to support this

statement—a mischaracterization of both the trial court’s ruling and the

high standard to obtain mandamus relief. And this is the improper

foundation on which the Dondero Organizations’ entire mandamus

argument is built.

Because the appellate court must uphold an order on mandamus

“on any grounds supported by the record before the trial court,” failure

to argue abatement under Rule 39(a)(2) warrants denial of the Petition.

In re Travelers Prop. Casualty Co. of America, 485 S.W.3d at 925;

seeIn re TCW Project Fund II, Ltd., 274 S.W.3d 166, 171 (Tex. App.—

Houston [14th Dist.] 2008, orig. proceeding) (holding that relators

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 31 waived an argument by not briefing the argument in their mandamus

petition). This Court need not go further.

2. The trial court had discretion to determine DAF HoldCo is a necessary party under Rule 39(a)(1).

a. The trial court correctly characterized the Dondero Organizations’ claims as derivative.

Even if the Court were limited to the reasoning articulated in

response to the Dondero Organizations’ motion for reconsideration, the

trial court did not abuse its discretion. Where a shareholder brings

derivative claims, the underlying company is a necessary party that

must be joined under Rule 39. See Lee v. Ty Equity Grp., Inc., No. CIV.

A. 3:01-CV-0253, 2001 WL 1401395, at *2 (N.D. Tex. Nov. 8, 2001) (non-

party must be joined as necessary where claims of “breach of fiduciary

duty clearly are derivative claims”).6 When determining under Cayman

law whether a claim is derivative, “[t]he governing standard involves

two questions: ‘Who suffered the alleged harm—the corporation or the

suing stockholder individually—and who would receive the benefit of

6 Texas’s joinder rule, TEX. R. CIV. P. 39, is modeled almost verbatim after FED. R.

CIV. P. 19; so Texas state courts consider the opinions of federal courts in Texas as persuasive authority in interpreting those rules. See, e.g., Royal Petroleum Corp. v. Dennis, 332 S.W.2d 313, 317 (Tex. 1960).

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 32 the recovery or other remedy?’” In re Harbinger Capital Partners Funds

Investor Litigation, 2013 WL 7121186 at *7 (S.D.N.Y. Dec. 16, 2013).

The trial court properly determined that the Dondero

Organizations’ claims are derivative. All causes of action the Dondero

Organizations pleaded stem from their allegations that the Charitable

DAF converted $270 million in assets belonging to DAF HoldCo7 and

thereby diluted the value of the Dondero Organizations’ participating

shares in DAF HoldCo. MR0420-27. The Dondero Organizations even

admit they “alleged essentially the same facts … before the Grand

Court” in the Caymans in seeking liquidation of DAF HoldCo. MR0419.

DAF HoldCo sustained the alleged injury. The Dondero Organizations’

injury is simply a reduction in the value of their shares in DAF HoldCo.

Similarly, the Dondero Organizations, as alleged “beneficial

owners of [DAF HoldCo],” are not entitled to personally recover DAF

HoldCo’s allegedly lost assets, regardless of the implications to the

value of their participating shares. MR0389.

7 While this allegation alone demonstrates the derivative nature of the Dondero Organizations’ claims, it is worth noting that, in reality, the assets the Dondero Organizations seek to obtain in this litigation belong to the Fund, not DAF HoldCo. MR0020. So the Dondero Organizations attempt to disregard two levels of removal from ownership of the assets they seek.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 33 The Dondero Organizations argue that Tianrui8 compels the

determination that its claims are not derivative. In Tianrui, the

Cayman Islands Privy Council held that in certain circumstances, a

shareholder may bring a direct claim against its company. The Dondero

Organizations argue that the trial court’s interpretation in denying the

Motion for Reconsideration incorrectly limits Tianrui’s holding to

owners of shares with voting rights. But their argument ignores the

underlying facts and depends on quotes taken out of context.

Tianrui involved a claim brought by a shareholder, Tianrui

(International) Holding Company Ltd (“Tianrui”), against China

Shanshui Cement Group Ltd., (“CSCGL”) a Cayman Islands exempted

company in which it held voting shares. Tianrui, [2024] UKPC 36, ¶¶

6, 16. Tianrui initially held 28% of the voting shares in CSCGL, the most

of any shareholder. Id. at ¶ 7. Its percentage of shares allowed it to block

special resolutions. Id. at ¶¶ 16, 18. Tianrui alleged CSCGL’s board of

directors, in collusion with lesser shareholders, issued over one million

new shares for the “improper purposes of enabling [the lesser

8 Tianrui (Int’l) Holding Co. Ltd. v. China Shanshui Cement Grp. Ltd., [2024] UKPC

36.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 34 shareholders] by themselves or with others to control [CSCGL.]” Id. at

¶ 18. After the dilution, Tianrui’s voting shares were reduced to a level

that removed its control over CSCGL and particularly its ability to block

special resolutions. Id.

The Cayman court determined under Tianrui’s allegations it had

personal standing to bring a claim against CSCGL. Id. at ¶ 4. Important

to the court’s decision was that Tianrui’s claim was over “an allotment

and issue of shares which is deliberately aimed at altering the balance

of power between shareholders, so as to advance the power of one (or

one group) at the expense of another.” Id. at ¶ 71. (emphasis added).

Specifically, Tianrui complained of their loss of their voting power—an

injury not shared or owned by CSCGL as a whole. Id.

The Tianrui court also noted that in certain circumstances, a

shareholder’s ability to make a personal claim against a company may

be destroyed, before or after the case is filed, by ratification. Id. at ¶ 82.

For example, where an action of the board of directors is ratified at a

general meeting unanimously, the shareholder loses its ability to make

a personal claim. See id. at ¶ 80.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 35 Two major distinctions exist between Tianrui and the Dondero

Organizations’ case. First, the Dondero Organizations’ Participating

Shares are non-voting, with no right to control whatsoever. The

Dondero Organizations argue that voting rights are not the only form

of power a shareholder might have, and Tianrui therefore mandates

that they have direct claims. But the Dondero Organizations do not

identify any source of “power” conferred by the Participating Shares,

merely limited economic rights. Indeed, as apparent from the face of the

governing documents attached to the Dondero Organizations’

pleadings, the Participating Shares confer none:

MR0080.

As holders of mere Participating Shares, the Dondero

Organizations held “no right to receive notice of, to attend, to speak at

nor to vote at general meetings of [DAF HoldCo].” MR0084. Instead,

those rights were vested solely in holders of Management Shares.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 36 MR0083. And all rights to manage DAF HoldCo (prior to the Cayman

Proceeding) were held by the Directors. MR0091

Unlike the shareholder in Tianrui, the Dondero Organizations are

not complaining about a loss of power over DAF HoldCo conferred on

them by virtue of their Participating Shares. Because the Participating

Shares conferred no power on the Dondero Organizations, nothing the

Defendants allegedly did could have “improperly shift[ed] the balance of

power” as argued in the Mandamus Petition. Instead, the Dondero

Organizations allege in all of their causes of action a dilution in the

economic value of their shares resulting from the purported theft of

assets allegedly belonging to DAF HoldCo.

The second major difference is that the shareholder in Tianrui filed

its lawsuit against the company in which it owned shares. To be

analogous here, the Dondero Organizations would need to sue the

company in which they own their Participating Shares, i.e., DAF

HoldCo. So even if the Participating Shares did confer the type of

“power” necessary to support a shareholder’s direct claim under Tianrui,

DAF HoldCo is still a necessary party, and the Dondero Organizations

continue to inexplicably refuse to add DAF HoldCo as a party. Tianrui

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 37 does not relieve a shareholder from involving the company in its lawsuit

about actions taken on behalf of the company.

The other cases cited by the Dondero Organizations in support of

the argument that they have direct claims are likewise unavailing.

Citing the Feiner9 case, the Dondero Organizations claim Cayman law

provides them, as shareholders, a direct claim for breach of fiduciary

duty against the Defendants “in circumstances like those pled here.”

Petition p. 32.

But the direct-fiduciary-duty “circumstances” are not present here.

The Dondero Organizations overlook that Feiner and the Cayman case

relies on state that any fiduciary duty a director owes a shareholder—

including the duty of disclosure—must arise outside of the director’s and

shareholder’s relationship to the company. Feiner Family Tr., 2007 WL

2615448, at *7 (“[A] director does not owe any fiduciary duties to

minority shareholders solely based on his or her relationship to the

company.”); Peskin v. Anderson, [2001] 1 B.C.L.C. 372 ¶ 29 (“The

directors of a company are not trustees for individual shareholders and

9 Feiner Family Trust v. VBI Corp., No. 07 Civ.1914, 2007 WL 2615448 (S.D.N.Y.

Sept. 11, 2007).

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 38 may purchase their shares without disclosing pending negotiations for

the sale of the company's undertaking.”). Instead, a separate duty owed

from a director to a shareholder would need to arise out of events

bringing “the directors of the company into direct and close contact with

the shareholders in a manner capable of generating fiduciary

obligations.” Feiner, 2007 WL 2615448, at *7 (citation modified). The

example given by Feiner is where “the directors of a company mak[e]

direct approaches to … the shareholders in relation to a specific

transaction and hold[] themselves out as agents for them” and engage in

misconduct in such a role. Id. (quoting Peskin, ¶ 34).

The Dondero Organizations do not allege and cannot allege such

direct and close contact or any other circumstances that give rise to a

direct fiduciary duty between the Charitable DAF and the Dondero

Organizations that give rise to direct-fiduciary-duty claims. Instead,

they allege that Patrick, as the Control Person of DAF HoldCo, took

assets that they allege belonged to DAF HoldCo without telling the

Dondero Organizations. The Dondero Organizations do not allege their

Participating Shares gave them any right to be informed of or control

any of DAF HoldCo’s financial dealings, nor do they allege Patrick

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 39 engaged in any close or special dealings with them apart from the typical

relationship between a director and a holder of non-voting shares.

Ultimately, taking the Dondero Organizations’ pleadings as true

(despite no obligation to do so), the answers to the key questions, “[w]ho

suffered the alleged harm—the corporation or the suing stockholder

individually—and who would receive the benefit of the recovery or other

remedy,” both point to DAF HoldCo. Harbinger, 2013 WL 7121186, at

*7. The trial court was therefore well within its broad discretion to find

that at least some (if not all) of the Dondero Organizations’ claims are

derivative. And because the joinder analysis under Rule 39 applies to

the “action” as a whole, the presence of even one derivative claim gave

the trial court discretion to determine DAF HoldCo is a necessary party.

See TEX. R. CIV. P. 39(a).

b. The trial court also had discretion to determine that DAF HoldCo is a necessary party under Rule 39(a)(1) because complete relief cannot be afforded by the current defendants.

Even if their claims are not derivative, the Dondero Organizations

pray for relief that can only be afforded by DAF HoldCo, meaning the

trial court cannot afford complete relief to the current parties without

DAF HoldCo.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 40 The Dondero Organizations argued in their Motion for

Reconsideration that the trial court misunderstood Rule 39(a)(1) and

ordered abatement based on the ability to afford complete relief to a

DAF HoldCo, a non-party. This argument ignores their own requested

relief. The Dondero Organizations asked the trial court to “[e]njoin

Defendants from further disposing of, transferring, encumbering, or

dissipating any Charitable DAF Fund and DAF HoldCo assets.”

MR0435. Only DAF HoldCo has (or had) authority under its governance

documents to dispose of and transfer the assets of the Charitable DAF

as contemplated by this request. MR0066; MR0071-104. Yet the

Dondero Organizations exclude DAF HoldCo, the party most necessary

to allow the relief sought by the Dondero Organizations. See Ring &

Ring v. Sharpstown Mall Tex., LLC, No. 01-16-00341-CV, 2017 WL

3140121, at *11 (Tex. App.—Houston [1st Dist.] July 25, 2017, no pet.).

The Dondero Organizations also seek “the reversal of the dilution

scheme and unauthorized asset transfers” and “recission of improper

redemption of shares and share transfers[.]” MR0436. Again, these

actions can only be carried out by DAF HoldCo. MR0066; MR0071-104.

The Dondero Organizations have Participation Shares in only one entity,

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 41 DAF HoldCo. MR0015. This interest arises out of DAF HoldCo’s Articles

of Association, and no Defendants currently party to this lawsuit can

provide complete relief. See Matter of Tr. A & Tr. C. Established Under

Bernard L. & Jeannette Fenenbock Living Tr. Agreement, Dated March

12, 2008, 690 S.W.3d 80, 88 (Tex. 2024) (explaining that for non-parties,

the court “could not require them to transfer the shares back” if they were

not joined). Ordering Defendants to return shares they do “not own or

have any control over” is not just improper, it is impossible. See id. at 88,

92 (court abuses its discretion by ordering restoration of shares by a

defendant who “does not own or control the shares[,] and those who do

are not parties.”). Because DAF HoldCo is needed in this lawsuit to afford

the complete relief sought by the Dondero Organizations, the trial court

had ample discretion to determine it, through the JOLs, must be joined

under Rule 39(a)(1).

c. The trial court also had discretion to find DAF HoldCo is a necessary party under Rule 39(a)(2).

DAF HoldCo claims an interest and is situated such that

disposition of this action without it “as a practical matter impair[s] or

impede[s] [its] ability to protect that interest.” TEX. R. CIV. P. 39(a)(2)(i).

DAF HoldCo’s absence also leaves the Defendants who are “already

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 42 parties subject to substantial risk of incurring double, multiple, or

otherwise inconsistent obligations.” Id. 39(a)(2)(ii).

As noted above, the Dondero Organizations do not argue against

these grounds. Instead, they focus entirely on Rule 39(a)(1). But an

appellate court must uphold an order “on any grounds supported by the

record before the trial court.” In re Travelers, 485 S.W.3d at 925.

Under Subsection (a)(2)(ii), proceeding without DAF HoldCo risks

multiple, inconsistent obligations given the sheer number of fora where

the Dondero Organizations are litigating these same claims. The

Dondero Organizations ask for relief in this Court even though they, or

their related parties, instituted involuntary liquidation of DAF HoldCo

in the Caymans, resulting in a Chapter 15 petition in Delaware seeking

recognition of the foreign proceeding. MR0725. The Dondero

Organizations’ claims in this case substantially overlap with the claims

in the Caymans—a fact that they admit (MR0028)—increasing the risk

that all parties will be subject to conflicting judgments regarding their

interests. Cf. Munters Corp. v. Locher, 936 S.W.2d 494, 498 (Tex. App.—

Houston [14th Dist.] 1997, writ denied) (“The principal function of

bankruptcy law is to determine and implement in a single collective

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 43 proceeding the entitlements of all concerned parties.”). And given the

Dondero Organizations do not specify whether their claims against

Patrick are brought in his individual or official capacity, he is uniquely

at risk of conflicting judgments. See Long v. Lopez, 115 S.W.3d 221, 227

(Tex. App.—Fort Worth 2003, no pet.).

Proceeding without DAF HoldCo also impairs its ability to defend

its interests here, which makes its joinder necessary under Subsection

(a)(2)(i). As explained above ad nauseum, DAF HoldCo is the only owner

of the claims in this lawsuit. See Longoria, 255 S.W.3d at 182 (even if the

absent party no longer has title to or possession of the assets in dispute,

they still have an interest in the lawsuit). And by filing the Chapter 15

petition for recognition, DAF HoldCo “has an actual, claimed interest—

not just a potential interest—in the subject matter of the action.” See In

re Occidental W. Tex. Overthrust, Inc., 626 S.W.3d 395, 401 (Tex. App.—

El Paso 2021, no pet.) (citing Crawford, 509 S.W.3d at 913); Henderson v.

Gordon, No. 01-16-01007-CV, 2018 WL 3848777, at *6 (Tex. App.—

Houston [1st Dist.] Aug. 14, 2018, no pet.) (quoting Claim, WEBSTER’S

THIRD NEW INT’L DICTIONARY (2002)) (“‘claim’ means ‘to demand

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 44 recognition of (as a title, distinction, possession, or power) esp. as a

right’”) (emphasis added).

Specifically, DAF HoldCo has an interest in the subject matter of

action because the Dondero Organizations request a constructive trust

and a court-appointed receivership targeting the Charitable DAF’s

assets. Imposing a constructive trust over Patrick, CDMCFAD, LLC, and

DFW Charitable Foundation, solely in favor of the Dondero

Organizations, impairs DAF HoldCo’s ability to protect its interests. See

In re Indep. Fuel Sys. LLC, 655 B.R. 322, 328 (Bankr. E.D. Tex. 2023)

(before a plaintiff “can obtain a constructive trust, it must establish that

the [assets] are owned by Defendant,” so non-parties with an interest in

those assets must be joined as necessary parties); KCM Fin. LLC v.

Bradshaw, 457 S.W.3d 70, 88 (Tex. 2015) (finding error when a court

grants a constructive trust for assets not definitively traceable as owed

to the specific claimant, since that impairs the interests of non-parties).

The Dondero Organizations’ receivership request also has a joinder

problem under Rule 39(a)(2)(i). DAF HoldCo is “a necessary and

indispensable party” when a receivership will “affect[] its properties.” See

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 45 Associated Bankers Credit Co. v. Meis, 456 S.W.2d 744, 747 (Tex. App.—

Corpus Christi 1970, no writ).

By the facts as alleged in the Dondero Organizations’ pleadings,

only DAF HoldCo, not the Dondero Organizations, had any property

interest in the assets the Dondero Organizations propose placing under

receivership, namely the “$270 million in assets” they themselves allege

belong to DAF HoldCo. MR0428; MR0429-31. And as shown by the

Cayman pleadings, DAF HoldCo, through the JOLs, currently makes an

unambiguous, non-theoretical legal claim to these assets in the Cayman

Proceeding. MR0605-12; MR0677-78. These are not the Dondero

Organizations’ assets, and never were, since the Dondero Organizations’

Participation Shares entitle them only to discretionary distributions, not

an equity share of the entire Charitable DAF. MR0080; MR0082-84;

MR0360. Thus DAF HoldCo also must be joined because under Rule

39(a)(2)(i) “all persons or entities over whose properties a receiver is

appointed are necessary parties.” See Assoc. Bankers Credit Co., 456

S.W.2d at 747 (emphasis added). The Dondero Organizations make no

argument that abatement on this ground is not supported by the record

before the trial court.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 46 C. The trial court acted within its broad discretion in abating this case.

As described above, the trial court had ample discretion to

determine that DAF HoldCo, through the JOLs, is a necessary party

under multiple, independent grounds pursuant to both Rule 39(a)(1) and

Rule 39(a)(2). Citing a case where no party sought or argued mandatory

joinder under Rule 39, the Dondero Organizations argue that abatement

is an abuse of discretion because they “are the masters of their suit

regarding the claims and parties they choose to pursue.” Mandamus

Petition pp. 51-52 (quoting Heard v. Moore, 101 S.W. 3d 726, 728 (Tex.

App.—Texarkana 2003, pet. denied)). But looking at cases actually

addressing Rule 39, it is clear and uncontroversial that “[a]batement of

an action is proper,” and thus well within a court’s discretion, when a

necessary party is absent. See, e.g., April Sound Mgmt. Corp. v.

Concerned Property Owners for April Sound, Inc., 153 S.W. 3d 519, 524

(Tex. App.—Amarillo 2004, no pet.); see also Brown, 528 S.W.3d at 624

(“A motion to abate is the proper procedural tool used to raise an issue of

a defect in the parties.”). Because a necessary party was not joined, the

trial court did not abuse its discretion by applying the proper remedy and

abating the case. See Longoria, 255 S.W.3d at 180.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 47 D. Why do the Dondero Organizations refuse to add DAF HoldCo as a party?

Left unanswered is the Dondero Organizations’ decision to not take

the easy path—doing what the trial court ordered and adding DAF

HoldCo as a party—and to instead spend the parties’ resources, and this

Court’s time, on the Petition. Surely it’s not the filing fee of $137. See

Supreme Court of Texas Misc. Docket No. 24-9047. Reading between the

lines in the Petition, it appears the answer is “because we don’t think we

have to.” Throughout Relators’ Petition, they complain of the effects of

the abatement, not about how joinder of DAF HoldCo would adversely

affect the ongoing litigation of the case. But Relators have had it within

their power to eliminate any prejudice from the abatement simply by

joining DAF HoldCo, as the trial court’s order requires. They therefore

are not entitled to mandamus to secure the very relief they could effect

on their own.

Dondero’s litigation tactics are well-documented in published

opinion after published opinion, where he’s been called “transparently

vexatious” and “litigious.” Dondero v. Jernigan, No. 24-10287, 2025 WL

1122466, at *5 (5th Cir. Apr. 16, 2025) (“And there is ample evidence in

the record to support these comments”). While the Dondero

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 48 Organizations unquestionably lose on the merits of their extraordinary

request for mandamus relief—which is based on a gross

mischaracterization of Judge Whitehill’s order on reconsideration—their

arguments and their threshold decision to pursue mandamus rather than

obey Judge Whitehill’s orders exist in the context of Dondero’s

documented history of “transparently vexatious” litigation. Dondero,

2025 WL 1122466, at *5.

PRAYER

For the reasons stated above, Defendants respectfully request that

this Court deny the Dondero Organization’ petition of writ of mandamus.

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 49 Respectfully submitted,

/s/ Brian P. Shaw Brian P. Shaw Texas Bar No. 24053473 Email: bshaw@ccsb.com Kenneth Carroll Texas Bar No. 03888500 Email: kcarroll@ccsb.com Monica E. Gaudioso Texas Bar No. 24084570 Email: mgaudioso@ccsb.com Andrea C. Reed Texas Bar No. 24121791 Email: areed@ccsb.com Emily H. Owen Texas Bar No. 24116865 Email: eowen@ccsb.com CARRINGTON, COLEMAN, SLOMAN & BLUMENTHAL, L.L.P. 901 Main Street, Suite 5500 Dallas, Texas 75202 (214) 855-3000 – Telephone (214) 580-2641 – Facsimile

ATTORNEYS FOR REAL PARTIES IN INTEREST

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 50 RULE 52.3(J) CERTIFICATION

The undersigned certifies that he has reviewed the foregoing Response and concluded that every factual statement in the Response is supported by competent evidence included in the appendix and mandamus record.

/s/ Brian P. Shaw

CERTIFICATE OF COMPLIANCE

I certify pursuant to Tex. R. App. P. 9.4(i)(3) that this document complies with the length limitations of Rule 9.4(i) and the typeface requirements of Rule 9.4(e). Exclusive of the contents identified by Rule 9.4(i)(1) and inclusive of all textboxes, footnotes, and endnotes, this document contains 6,575 words as counted by the Word Count function of Microsoft Word. This document has been prepared in proportionally spaced typeface using:

Software Name and Version: Microsoft Word for Microsoft 365

Typeface Name: Century Schoolbook

Font Size: 14-point in text; 12-point in footnotes

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 51 CERTIFICATE OF SERVICE

I certify that on January 2, 2026, a true and correct copy of this Response to Petition for Writ of Mandamus was served by electronic case filing or e-mail or certified mail to the following counsel and parties:

The Honorable William Whitehill MCCARTY LAW PLLC BCDivision1B@txcourts.gov Darren L. McCarty Texas Business Court, First State Bar No. 24007631 Division darren@mccartylawpllc.com 8080 Park Ln Ste 500 316 West 12th Street, Suite 400 Dallas, Texas 75231 Austin, Texas 78701 512-827-2902 Respondent DUANE MORRIS LLP Craig M. Warner State Bar No. 24084158 cmwarner@duanemorris.com Joseph M. Cox State Bar No. 04950200 jmcox@duanemorris.com Benjamin L. Warden State Bar No. 24115926 bwarden@duanemorris.com 200 Crescent Court, Suite 900 Dallas, Texas 75201 (214) 257-7213 -Telephone

Counsel for Relators

RESPONSE TO PETITION FOR WRIT OF MANDAMUS – Page 52 Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.

Brian Shaw on behalf of Brian Shaw Bar No. 24053473 bshaw@ccsb.com Envelope ID: 109618304 Filing Code Description: Response Filing Description: RESPONSE TO PETITION FOR WRIT OF MANDAMUS Status as of 1/2/2026 4:53 PM CST

Case Contacts

Name BarNumber Email TimestampSubmitted Status

Brian Shaw 24053473 bshaw@ccsb.com 1/2/2026 4:44:43 PM SENT

Dylan JAnderson DJAnderson@duanemorris.com 1/2/2026 4:44:43 PM SENT

Dylan JAnderson DJAnderson@duanemorris.com 1/2/2026 4:44:43 PM SENT

Dylan JAnderson DJAnderson@duanemorris.com 1/2/2026 4:44:43 PM SENT

Joseph MCox JMCox@duanemorris.com 1/2/2026 4:44:43 PM SENT

Benjamin Warden BWarden@duanemorris.com 1/2/2026 4:44:43 PM SENT

Benjamin Warden BWarden@duanemorris.com 1/2/2026 4:44:43 PM SENT

Benjamin Warden BWarden@duanemorris.com 1/2/2026 4:44:43 PM SENT

Elizabeth Perez eperez@duanemorris.com 1/2/2026 4:44:43 PM SENT

Elizabeth Perez eperez@duanemorris.com 1/2/2026 4:44:43 PM SENT

Elizabeth Perez eperez@duanemorris.com 1/2/2026 4:44:43 PM SENT

Craig M.Warner CMWarner@duanemorris.com 1/2/2026 4:44:43 PM SENT

Craig M.Warner CMWarner@duanemorris.com 1/2/2026 4:44:43 PM SENT

Craig M.Warner CMWarner@duanemorris.com 1/2/2026 4:44:43 PM SENT

The Honorable William Whitehill BCdivision1b@txcourts.gov 1/2/2026 4:44:43 PM SENT

Darren McCarty darren@mccartylawpllc.com 1/2/2026 4:44:43 PM SENT

Darren McCarty darren@mccartylawpllc.com 1/2/2026 4:44:43 PM SENT Automated Certificate of eService This automated certificate of service was created by the efiling system. The filer served this document via email generated by the efiling system on the date and to the persons listed below. The rules governing certificates of service have not changed. Filers must still provide a certificate of service that complies with all applicable rules.

Brian Shaw on behalf of Brian Shaw Bar No. 24053473 bshaw@ccsb.com Envelope ID: 109618304 Filing Code Description: Response Filing Description: RESPONSE TO PETITION FOR WRIT OF MANDAMUS Status as of 1/2/2026 4:53 PM CST

Darren McCarty darren@mccartylawpllc.com 1/2/2026 4:44:43 PM SENT

Darren McCarty darren@mccartylawpllc.com 1/2/2026 4:44:43 PM SENT