La Cour suprême du Texas clarifie les limites de la capacité des actionnaires dans les actions en responsabilité fiduciaire contre les conseillers d'entreprise

The Supreme Court of Texas, in In re UMTH General Services, L.P. et al.,[1] held that claims against a third party advisor for breaches of fiduciary duty to an entity and its shareholders were claims of the entity, and that shareholders could only bring derivative, and not direct, claims. The decision clarifies the limits of shareholder capacity in suits involving corporate advisors and reinforces the principle that fiduciary duties owed to a corporation run to the shareholders collectively, not individually, and that references to an entity “and its shareholders” should be read as to the shareholders collectively and not individual shareholders. In light of recent Texas reforms concerning derivative litigation,[2] this confirms Texas’s “corporate framework” ensuring that third parties “[do] business with an entity run by its board of directors in procedurally predictable ways without risk of exposure to suits brought by shareholders who attempt to bypass statutory safeguards by bringing derivative claims directly.”

Principaux enseignements

The UMTH General Services opinion has several key takeaways for practitioners:

• It reinforces the importance of the corporate form and the collective nature of shareholder rights.  In particular, it clarifies that broad language referencing duties to an entity “and its shareholders” will generally be read to create a duty to the collective owners.  The creation of duties to a specific shareholder “an express undertaking” to that individual.
• The decision makes note of the differences of interest that may arise between a corporation and “particular shareholder[s], whose interests may not align with the corporate entity as a whole,” and reaffirms that the duties of directors are to the entire enterprise.  This is consistent with recent amendments to Texas law allowing certain corporations to restrict the right to institute derivative claims to shareholders meeting an ownership threshold.[3]
• The Court’s language also highlights that rules requiring certain claims to be brought derivatively do not violate the Texas Constitution, as such rules do not remove a plaintiff’s standing, but standing alone is not sufficient to enable a direct claim as “shareholder[s] alleging an injury sufficient to confer constitutional standing, however, may nonetheless lack the capacity to pursue and recover for such a claim.”  In UMTH General Services, the Court found that absent a duty to individual shareholders, the individual shareholders could not establish a personal cause of action or personal injury necessary to support a direct claim.
• The opinion reaffirms longstanding Texas law that fiduciary duty claims are generally owned by the corporate entity and therefore may only be brought derivatively.  It further highlights the duties of a Texas’s entity’s governing authority are directed to the collective enterprise.

Background of the Case

United Development Fund IV (the “Trust”), a Maryland real estate investment trust with over 12,000 shareholders, appointed UMTH General Services, L.P. (“UMTH”) as its advisor and delegated to UTMH management of the Trust’s day-to-day operations. The advisory agreement stated that the advisor “shall be deemed to be in a fiduciary relationship to the Trust and its Shareholders.” The agreement was executed only between the Trust and UMTH; individual shareholders were not parties to the agreement.

After allegations of mismanagement and corporate waste, a group of shareholders sued UMTH and its affiliates (the “Advisors”) in Texas for breach of fiduciary duty, claiming that the advisory agreement created duties between the Advisors and each shareholder, allowing them to sue directly rather than derivatively on behalf of the Trust. The Advisors, in turn, filed a plea to the jurisdiction, a verified plea in abatement, and special exceptions—arguing that the shareholders’ claims are derivative and owned by the Trust and, therefore, the shareholders lacked standing and capacity. The trial court denied the Advisors’ motions, and the court of appeals likewise denied the Advisors’ mandamus relief. The Advisors appealed to the Texas Supreme Court.

The Court’s Analysis

The Court first addressed the Advisors’ standing argument. The Advisors argued that the shareholders failed to meet the requirements for bringing a derivative claim on behalf of the Trust. But the shareholders disavowed any intent to sue derivatively. They contended that they suffered individual injuries sufficient to confer constitutional standing. The Court agreed. “Because the [s]hareholders allege financial losses due to the Advisors’ mismanagement and assert direct claims in their individual capacities, the Shareholders have constitutional standing . . . .” The Court noted, however, that having constitutional standing does not mean the plaintiffs had capacity to pursue and recover on the claims.

Next, the Court addressed the question of whether the shareholders had capacity to sue the Advisors and recover damages individually. Generally, under Texas law, shareholders cannot recover damages personally for wrongs done solely to the corporation even if the shareholders suffer injury as a result. This “default rule,” as the Court describes, embodies the principle that each shareholder suffers in proportion to their shares and will be made whole if the corporation obtains restitution or compensation. For a shareholder to sue and recover individually, there must be an independent duty owed to that shareholder separate and apart from a duty to the corporate entity.

The shareholders argued the advisory agreement created independent duties directly to the shareholders because the agreement provided that the Advisors owed fiduciary duties to “the Trust and its Shareholders.” The Advisors responded that this language “and its Shareholders” merely states the bedrock principle of corporate law that fiduciary duties flow to a corporation and its shareholders collectively, not individually, and that imposing such a fiduciary duty with each shareholder would conflict with the Advisors’ duties to the Trust and the shareholders collectively. The Court agreed with both points, holding that the phrase “and its Shareholders” referred to the shareholders collectively. None of the shareholders signed the advisory agreement, nor did the advisory agreement provide an express statement that the Advisors were undertaking duties to any individual shareholder. Thus, absent an express undertaking, the Court declined to infer a direct duty that conflicts with the general rule that fiduciary duties flow to the corporation and its shareholders collectively.

Further, the Court explained that the “principle of shareholder collectivity overcomes the ‘incompatible’ nature of simultaneous duties owed to a corporation and duties owed to a particular shareholder,” which the Court previously addressed in In re Matter of Estate of Poe, 648 S.W.3d 277 (Tex. 2022) when it considered whether a director may owe both formal fiduciary duties to a corporation and informal fiduciary duties to individual shareholders. In the UMTH General Services opinion here, the Court held that those duties are incompatible and conflicting—directors cannot simultaneously owe fiduciary duties to the corporation and individual shareholders absent an express contractual undertaking.

Therefore, the Court held that the shareholders’ only option was to sue derivatively on behalf of the Trust because they lacked capacity to bring claims directly.

[1] No. 24-0024, 2025 WL 3180859 (Tex. Nov. 14, 2025).  Quotations in this article are to that opinion unless otherwise specified.  Internal quotations and citations are omitted.

[2] See Senate Bill 29 (29^th Regular Session), Sections 12 and 13, codified at Sections 21. 551(2) and 21.552(a) of the Texas Business Organizations Code.

[3] Id.