News Summary
The Texas Business Court has issued significant rulings on jurisdictional requirements involving ‘qualified transactions’ of over US$10 million. These rulings mandate that parties involved in disputes present clear jurisdictional facts. Key cases include Atlas IDF vs. Nexpoint, where transaction value assessments were reaffirmed, and G-Force vs. Bloecher, which clarified jurisdiction limits in unsigned contracts. The court’s ongoing focus on jurisdiction will shape future business dealings in Texas, especially with potential legislative changes reducing the threshold for Business Court cases.
Texas – In June 2025, the Texas Business Court handed down three significant rulings that clarified the jurisdictional requirements for cases concerning “qualified transactions” under the Texas Government Code Chapter 25A. These rulings are poised to influence how litigants prepare and present their cases within the court system.
A qualified transaction is defined by Texas Government Code § 25A.001(14) as involving consideration that has a value of at least $10 million, which can be documented through payments, loans, or advances. In light of these rulings, the Business Court has emphasized the importance of litigants adequately pleading jurisdictional facts, whether or not jurisdiction is contested. This requirement seeks to streamline court processes by ensuring that all necessary information is presented upfront, allowing for more efficient case evaluations.
In the case of Atlas IDF v. Nexpoint Real Estate Partners, the Texas Business Court’s First Division confirmed that the value of a potential “qualified transaction” is assessed at the time the transaction occurs. The ruling indicated that the consideration for a promissory note should include the expected interest, establishing that interest can indeed be factored into the evaluation of whether a transaction meets the $10 million threshold. The court found that Nexpoint failed to provide evidence challenging Atlas’s valuation, ultimately leading to the conclusion that the transaction value surpassed $10 million.
Furthermore, the First Division rejected the argument that pre-suit interest on promissory notes was inadmissible under Texas Government Code § 250A.004(d). This clarification ensures that parties are aware of how interest may affect the qualified transaction designation.
In another significant ruling concerning the bid process, G-Force & Associates v. Bloecher et al., the Eighth Division of the Texas Business Court determined that it lacked jurisdiction over claims stemming from a bid process that did not result in an executed contract. The court interpreted the statutory definition of “qualified transaction” as requiring a consummated agreement or contract. However, the division did note that tortious interference claims related to prospective business relationships could still be advanced if they stem from existing agreements.
In the case of Slant Operating v. Octane Energy Operating, the Eighth Division ruled that Slant Operating had adequately pleaded its claims, which arose from a qualified transaction, despite the agreement lacking specific consideration amounts. This ruling underscored that although a challenge at the pleading stage may be passed, this does not finalize questions of jurisdiction.
The proactive approach of the Texas Business Court in examining jurisdictional matters suggests that judges may raise questions about jurisdiction on their own initiative. Litigants are now advised to include detailed facts demonstrating that disputes arise from qualified transactions valued at more than $10 million.
It is important to note that the statutory definition of “qualified transaction” also distinctly excludes loans from banks or credit institutions. According to Texas Government Code 25A.004(d), the Business Court holds concurrent civil jurisdiction alongside district courts for cases where the amount in controversy exceeds $10 million, though it excludes certain types of damages.
Looking ahead, recent legislative amendments may alter the landscape for the Texas Business Court. Proposed changes could lower the minimum amount-in-controversy requirement for filings from $10 million to $5 million. Additionally, these amendments may expand the court’s jurisdiction to include certain intellectual property claims and disputes surrounding internal affairs litigation.
As these rulings take effect and as further changes to legislation unfold, parties engaged in litigation in Texas should remain vigilant and well-informed. Understanding jurisdictional requirements will be crucial as businesses navigate the complexities of qualified transactions in future court proceedings.
Deeper Dive: News & Info About This Topic
- Norton Rose Fulbright: What is a Qualified Transaction in the Texas Business Court
- Dallas News: New Law Makes Texas Easier for Corporations to Fend Off Disputes
- White & Case: Texas Business Courts – What You Need to Know
- Wikipedia: Jurisdiction
- Google Search: Texas Business Court
