Existing District Court Receivership Defeats Business Court Jurisdiction Over Partnerships
Read the Court's Opinion (PDF)
Judge Stacy Sharp
In Parker v. Lynzara-Austin Real Estate Management, the Business Court's Fourth Division dismissed for lack of subject-matter jurisdiction where partnerships were already under receivership in a Kendall County district court outside the Business Court's operating territory. The court held that the district court retains exclusive jurisdiction over entities in receivership for the duration of that receivership, applying Texas Government Code Chapter 25A and Business Organizations Code Chapter 11.
Court Staff Summary
Read the full opinion Applying Texas Government Code Chapter 25A and Texas Business Organizations Code Chapter 11, the court concludes that because partnerships are under an existing receivership in a district court outside the Business Court's operating territory, the district court retains exclusive jurisdiction of the partnerships for the duration of the receivership.
Background: A Decade-Long Business Dispute
This case arose from the breakdown of a long-running business relationship between plaintiff John J. Parker and Michael Shalit concerning operation of the Tapatio Springs Golf Resort and related real-estate developments in Kendall County. The parties' litigation began in 2012 in Kendall County, and in 2018 the 451st District Court of Kendall County placed the relevant business entities—Kendall County Development Company, LP ("KCDC"), Tapatio Springs Real Estate Holdings, LP ("TSREH"), and Tapatio Springs Family Utility Management, LP—in receivership. The Kendall County court entered final judgment earlier this year, with Shalit and defendants seeking review from the Texas Supreme Court in a severed portion of the suit.
The Jurisdictional Challenge
During the appeal, plaintiffs sent notice removing Shalit as general partner of the business entities and filed a motion in the original Kendall County action seeking to convert the existing receivership into a liquidating receivership. The Kendall County court denied that motion and extended the existing receivership instead. Plaintiffs then filed this new suit in the Business Court's Fourth Division seeking appointment of a liquidating receiver over the three partnerships and orders directing their dissolution, winding up, and termination. Defendants challenged the Business Court's subject-matter jurisdiction, arguing the district court retained exclusive jurisdiction over entities already in receivership.
The Court's Ruling
The Business Court concluded that because the partnerships were already under an existing receivership in a district court outside the Business Court's operating territory, the district court retains exclusive jurisdiction of the partnerships for the duration of the receivership. The court applied both Texas Government Code Chapter 25A and Business Organizations Code Chapter 11 in reaching this conclusion. The opinion was entered on September 4, 2026.
Practical Significance for Texas Commercial Practice
This decision establishes an important limitation on the Business Court's jurisdiction: even where a case might otherwise fall within the Business Court's subject-matter jurisdiction, an existing receivership in a district court outside the Business Court's territory creates exclusive jurisdiction in that district court. Practitioners should be aware that the Business Court's concurrent jurisdiction does not extend to displacing ongoing receivership proceedings in other courts.