Sectors
Foley & Lardner LLP partner Christopher Babcock was quoted in Law360’s article, “Southwest Board Beats Suit in First Texas Corporate Law Test,” addressing the dismissal of a shareholder derivative suit brought against the airline’s corporate board.
“The case validates the constitutionality of SB 29,” said Babcock, who was closely involved in the drafting and the passage of Texas Senate Bill 29 by the Texas legislature in 2025. Among the Texas corporate law reforms SB 29 introduced was a provision allowing companies to set up to a 3% minimum shareholder-ownership threshold for derivative suits, a threshold adopted by Southwest’s directors before the suit was brought.
“That’s what makes this case so significant, as it really does validate the constitutionality of the law,” he added.
Foley’s Texas Corporate Governance Team explored the ruling further in their recent article, “Meritless Lawsuits No Longer Fly Free in Texas,” including what it means for companies navigating Texas’s evolving corporate governance landscape.
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