The Texas Business Court continues to grant dispositive motions, enforce unambiguous agreements, and shape commercial law. In a recent opinion, Michael D. Crain v. William “Will” Northern, Cause No. 25-BC08A-0014 (Tex. Bus. Ct. Jan. 29, 2026), the Eighth Division addressed the enforceability of a mandatory buy-sell option clause — commonly known as a “Texas Shootout” provision — and the consequences of failing to respond within contractual deadlines.
This case may provide future guidance for business owners, in-house counsel, and practitioners navigating LLC governance disputes.
Background
Michael Crain and William Northern both served as 50% members in three related LLCs: Northern Crain Realty, LLC, Northern Crain Property Management, LLC, and Northern Crain, LLC. Each entity had a nearly identical company agreement, containing a buy-sell option clause.
The relationship between Crain and Northern eventually soured, and in August 2024, Northern exercised his rights under the buy-sell option. He sent Crain a formal notice offering to purchase Crain’s membership interests for specified amounts. Under the clause, Crain had 30 days to respond by electing to either (1) sell his interests to Northern at the stated price, or (2) purchase Northern’s interests at that same valuation.
Crain did not respond within the 30-day window. The clause expressly stated that failure to respond would be “conclusively deemed” an election to sell. Despite Northern’s subsequent attempts to close the transaction — including by tendering cashier’s checks — Crain refused to proceed and instead filed suit alleging Northern had breached fiduciary duties by pursuing a separate project.
The Court’s Analysis
Enforceability of the Buy-Sell Clause
The court found the company agreements, including the buy-sell option clause, valid and enforceable. Applying standard contract interpretation principles, the court emphasized that parties must enforce unambiguous terms as written. The court determined that the contractual language made clear that the buy-sell process was “mandatory,” and that 30 days of silence would “conclusively” trigger a deemed election to sell.
Crain’s Defenses Fail
Crain raised several defenses, arguing that:
- Northern’s alleged prior breaches should preclude enforcement of the clause.
- Unclean hands should bar specific performance.
- The valuation was improper because it excluded the separate project at issue.
The court rejected each argument and granted summary judgment. Finding the agreement unambiguous and enforceable, the court refused to allow Crain to “pick-and-choose which clauses he deems enforceable” while ignoring his own contractual obligations.
On the unclean hands defense, the court held that Crain failed to meet his burden of proving Northern caused harm serious enough to warrant abandoning the express specific performance remedy. The court’s approach to this issue may prove noteworthy because it did not allow an otherwise unfounded tort claim to preclude summary judgment and the grant of specific performance under the parties’ agreement.
Considerations for Texas Businesses
This opinion may serve to reinforce several lessons:
- Buy-sell provisions may be enforced as written. The Texas Business Court has not, to date, rewritten clear contractual language, even when parties later regret the consequences.
- Deadlines matter. Failing to respond to a buy-sell notice may result in forfeiture of valuable membership interests. Business owners may wish to monitor and respond to contractual notices promptly.
- Specific performance is available. When parties agree that damages are inadequate, the Texas Business Court might enforce the parties’ agreement and compel performance.
- Document everything. Northern’s careful compliance with notice requirements and deadlines was essential to the successful claim.
Conclusion
The Crain v. Northern decision may demonstrate the Texas Business Court’s commitment to enforcing commercial agreements according to their plain terms. LLC members should consider carefully reviewing their operating agreements, understanding the implications of buy-sell provisions, and acting within prescribed deadlines when disputes arise.
