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Energy Founders Fund v. Daskevich
Analysis
Advancement Rights Governed by Agreement in Effect When Conduct Occurred, Not When Suit Filed—But Claims Must Arise 'By Reason Of' Director Service
In Energy Founders Fund v. Daskevich, the Business Court denied a director's motion to compel advancement of legal fees, holding that while the company agreement in effect during the director's service governs advancement rights—not a later amendment eliminating those rights—the claims against him did not arise "by reason of" his director service as required by the agreement's advancement provision. The decision clarifies that advancement is a conduct-based contractual right distinct from indemnification, but its scope is limited to claims causally connected to the director's corporate role.
Drag-Along Rights Turn on Present Control, Not Post-Closing Governance Arrangements
In Energy Founders Fund v. Daskevich, the Texas Business Court held that a buyer was not an "Affiliate" under a company agreement's drag-along provision where the selling member possessed no equity, voting authority, or management power over the buyer before closing, notwithstanding negotiated post-closing governance rights. The court rejected the argument that contingent future control relationships can retroactively create affiliate status, emphasizing that the agreement's definition requires actual possession of present governance power.
Board Approval Alone Suffices for Unit Transfers Under Company Agreement; Special Director Consent Not Required
In Energy Founders Fund v. Daskevich, Division 11 granted summary judgment holding that a company agreement's Section 9.2 required only majority board approval—not dual-director consent under Section 7.2(c)(ii)—to transfer membership units, including a 100% equity sale triggering drag-along rights. The court applied plain-language contract interpretation principles, finding no ambiguity in the LLC agreement's governance provisions.