Texas § 101.461 PAYMENT OF EXPENSES.

Texas Statutes

§ 101.461 — PAYMENT OF EXPENSES.

Texas § 101.461

Code BOBusiness Organizations Code

This text of Texas § 101.461 (PAYMENT OF EXPENSES.) is published on Counsel Stack Legal Research, covering Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Tex. Business Organizations Code Code Ann. § 101.461 (2026).

Text

Sec. 101.461. PAYMENT OF EXPENSES.

(a)In this section, "expenses" means reasonable expenses incurred by a party in a derivative proceeding, including:

(1)attorney's fees;

(2)costs in pursuing an investigation of the matter that was the subject of the derivative proceeding; or

(3)expenses for which the limited liability company may be required to indemnify another person.

(b)On termination of a derivative proceeding, the court may order:

(1)the limited liability company to pay expenses the plaintiff incurred in the proceeding if the court finds the proceeding has resulted in a substantial benefit to the limited liability company;

(2)the plaintiff to pay expenses the limited liability company or other defendant incurred in investigating and defending the proceeding if the court finds

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Sec. 101.461. PAYMENT OF EXPENSES. (a) In this section, "expenses" means reasonable expenses incurred by a party in a derivative proceeding, including:
(1) attorney's fees;
(2) costs in pursuing an investigation of the matter that was the subject of the derivative proceeding; or
(3) expenses for which the limited liability company may be required to indemnify another person.
(b) On termination of a derivative proceeding, the court may order:
(1) the limited liability company to pay expenses the plaintiff incurred in the proceeding if the court finds the proceeding has resulted in a substantial benefit to the limited liability company;
(2) the plaintiff to pay expenses the limited liability company or other defendant incurred in investigating and defending the proceeding if the court finds the proceeding has been instituted or maintained without reasonable cause or for an improper purpose; or
(3) a party to pay expenses incurred by another party relating to the filing of a pleading, motion, or other paper if the court finds the pleading, motion, or other paper:
(A) was not well grounded in fact after reasonable inquiry;
(B) was not warranted by existing law or a good faith argument for the application, extension, modification, or reversal of existing law; or
(C) was interposed for an improper purpose, such as to harass, cause unnecessary delay, or cause a needless increase in the cost of litigation.
(c) For purposes of Subsection (b), a substantial benefit to the limited liability company does not include additional or amended disclosures made to the members, regardless of materiality.

Legislative History

Acts 2003, 78th Leg., ch. 182, Sec. 1, eff. Jan. 1, 2006. Amended by: Acts 2019, 86th Leg., R.S., Ch. 899 (H.B. 3603 ), Sec. 22, eff. September 1, 2019. Acts 2025, 89th Leg., R.S., Ch. 21 (S.B. 29 ), Sec. 19, eff. May 14, 2025.