The Business Court of Texas recently issued its first published opinion interpreting the Texas Securities Act (TSA). In Thompson v. Anchor Capital GP LLC, 2026 Tex. Bus. 41 (1st Div. July 1, 2026), the court granted defendants’ motion for partial summary judgment on the plaintiffs’ TSA claim after holding that a secured promissory note was not a security. See id. ¶¶ 1–2, 27–32, 62–63. The opinion offers a roadmap for litigating whether debt instruments fall within the TSA and for structuring private-credit, family-office, and private-equity transactions in Texas.
The Case: A Private-Credit and Family-Office Dispute
The dispute arose out of a business relationship between Jean Thompson, the president of Thompson Petroleum Corporation — a family business that manages the Thompson family’s assets — and Michael Mann, the founder and CEO of Anchor Capital GP LLC — a private equity investment brokerage. Id. ¶¶ 4–7. After Thompson invested millions in Anchor-managed funds, Mann asked Thompson to loan Anchor money to buy out one of Anchor’s partners. Id. ¶¶ 7–8. Thompson agreed, contingent on Mann providing a personal financial statement and guaranty. Id. ¶ 8. The parties executed a Secured Promissory Note and other instruments, which they later amended when Mann sought more funds to buy out another partner. See id. ¶¶ 8–9. After disputes arose over collateral-inspection and financial-information rights, Thompson declared an event of default, accelerated the loan, and sued, including a claim under the TSA. See id. ¶¶ 10–14, 27–32.
The Court’s Analysis
The court began with the TSA’s broad definition of “security” and the rule that whether a document is a TSA security is a question of law. Id. ¶¶ 30–32. Because the TSA closely mirrors the federal Securities Act of 1933, the court looked to federal decisions and Texas appellate court opinions for guidance and applied the U.S. Supreme Court’s “family resemblance” test from Reves v. Ernst & Young, 494 U.S. 56 (1990) in lieu of other tests. See id. ¶¶ 32, 40–43.
Under the family resemblance test, a note with a term of more than nine months is presumed to be a security, but that presumption can be rebutted if the note is an enumerated non-security (e.g., a consumer financing note) or bears a strong family resemblance to one. See id. ¶¶ 37–38, 43. The court rejected defendants’ threshold argument that the note was a short-term note secured by a lien on a small business or its assets because the note had a four-year maturity. See id. ¶¶ 45–47. The court therefore proceeded to the four Reves factors to determine if the note resembled an enumerated security: the parties’ motivations, the plan of distribution, the investing public’s reasonable expectations, and the presence of risk-reducing measures. See id. ¶¶ 44, 48.
On the first factor, the court found mixed motives. Thompson was entitled to interest, but she had agreed to below-market, borrower-friendly terms — suggesting profit was not her primary motivation. See id. ¶¶ 49–51. Mann, however, used the funds to raise capital for Anchor, avoid dilution of an equity investor, and pay salaries and other business expenses, which weighed in favor of security status. See id. ¶¶ 52–53. The plan-of-distribution factor supported defendants because plaintiffs conceded it. See id. ¶ 48.
The remaining factors carried the day for defendants. The note was titled “Secured Promissory Note,” the documents referred to the funds as a loan, there was no evidence the note was advertised as an investment, and the parties were sophisticated businesspersons represented by adept counsel. See id. ¶¶ 54–58. The court also emphasized the transaction’s risk-reducing protections: collateral, Mann’s personal guaranty, extensive representations, warranties, and covenants, collateral-inspection rights, and financial-information rights. See id. ¶¶ 59–61. Although the first factor leaned toward security status, the court held as a matter of law that the note was not a TSA security and granted partial summary judgment. See id. ¶¶ 62–63.
Why the Opinion Matters for Business Court Securities Litigation
For litigators and businesses in the Texas Business Court, Thompson is important because it applies federal note-as-security doctrine to the TSA in a fact pattern common to private-credit, family-office, and private-equity transactions. Here are a few practical lessons:
1. Labels matter, but they are not dispositive. The court considered the note’s title, terminology, and absence of investment language, but it did not stop there. Parties seeking loan treatment should use consistent loan terminology — borrower, lender, principal, interest, collateral, guaranty, covenants, and repayment — while recognizing that a court will still evaluate the full transaction under Reves (assuming the term is longer than nine months).
2. Risk-reducing protections can be outcome-determinative. Collateral, personal guaranties, inspection rights, and other negotiated lender protections helped show that securities-law protections were not necessary. In private-credit and family-office lending, those protections should be drafted with both credit enforcement and potential TSA characterization issues in mind.
3. Purpose and distribution remain critical facts. The court found the motives factor mixed because the borrower used the funds for business-capital purposes, while the lender accepted below-market, borrower-friendly terms. Evidence about why money was advanced, how the instrument was marketed, whether it was broadly distributed, and who could hold it will be central in future TSA disputes over notes and other debt instruments.
4. The Business Court may decide the security-status question early. The court treated whether the note was a TSA security as a question of law and resolved the TSA claim on partial summary judgment. For defendants, that creates a potential early-disposition path where the transaction record supports loan treatment. For plaintiffs, it underscores the need to develop evidence showing investment-like features, expectations, distribution, and the absence of risk-reducing protections.
Key Takeaways
The Thompson opinion is significant since it gives market participants a concrete example of how the Texas Business Court will analyze whether a private note is a security. The decision does not mean every secured promissory note is outside the TSA. It does, however, show that a carefully documented, privately negotiated loan can fall outside the TSA’s definition of “security.”
For lenders, borrowers, family offices, private-equity sponsors, and litigators handling debt-related disputes, Thompson is a reminder that securities characterization can turn on deal architecture and the evidentiary record. Parties structuring private loans should consider TSA issues at the drafting stage and parties litigating them should build the record around each Reves factor. Foley & Lardner’s Texas litigation and securities attorneys can help clients evaluate whether a note or other debt instrument may implicate the TSA, structure transactions to reduce characterization risk, and develop litigation strategies when securities-act claims arise.
