By Byron F. Egan

This article is part four of six articles in the “DExit to Texas: What You Need to Know About Reincorporating in the Lone Star State” series, which covers why Delaware companies are considering redomiciling in Texas and the primary differences between the two states.

A key driver behind the DExit movement is Texas’s investment in a specialized forum for complex business disputes. The Texas Business Court represents a significant shift in how commercial litigation is handled in the state.

Overview

Texas has established a new system of specialty trial courts known as the Business Court, which began hearing cases in 2024. Designed to handle significant Texas business disputes, the Business Court is supported by the Fifteenth Court of Appeals, a new intermediate appellate court created to hear appeals from Business Court decisions. The initial Business Court divisions are in major metropolitan areas around Austin, Dallas, Fort Worth, Houston, and San Antonio, with the expectation that the Legislature will eventually create divisions for the rest of the state. Parties in Business Court proceedings retain the right to a jury trial when required by the Texas Constitution.

Jurisdiction

The Business Court has civil jurisdiction concurrent with district courts over two categories of specified actions when the amount in controversy exceeds $5,000,000 (excluding interest, statutory damages, exemplary damages, penalties, attorneys’ fees, and court costs).

The first category includes, among other things: derivative proceedings; actions regarding an organization’s governance, governing documents, or internal affairs; securities and trade regulation claims against organizations and related persons (including controlling persons, officers, underwriters, or auditors); actions by organizations or owners alleging breaches of duty by governing persons; actions seeking to hold owners or governing persons liable for organizational obligations; and actions arising under the Texas Business Organizations Code (TBOC). The $5,000,000 minimum does not apply if a party is an entity whose voting equity securities are listed on a national securities exchange registered with the SEC.

The second category includes: actions arising out of “qualified transactions” (transactions involving payments, receipts, or lending obligations of at least $5 million); actions arising out of a contract or commercial transaction in which the parties agreed that the Business Court has jurisdiction (excluding insurance contracts); and actions alleging violations of the Texas Finance Code or the Texas Business & Commerce Code by an organization or its officers or governing persons.

The Business Court also has supplemental jurisdiction over related claims that form part of the same case or controversy, but only if all parties agree and the presiding Business Court judge consents.

What the Business Court Will Not Hear

The Business Court does not have jurisdiction over certain categories of cases, including:

• Health care liability claims
• Claims for bodily injury or death
• Legal malpractice claims
• Consumer transaction claims
• Claims involving governmental entities (unless within the court’s supplemental jurisdiction)
• Liens on real or personal property
• Covenants not to compete
• Deceptive trade practices claims
• Certain claims arising under specified Texas Code provisions
• Claims involving farm products
• Insurance policy disputes

The Judges

Business Court judges are appointed by the Governor with the advice and consent of the Texas State Senate. Each judge must have at least 10 years of specialized experience in complex civil business litigation, business transaction law, service as a judge of a Texas court with civil jurisdiction, or a combination of these qualifications. Judges are appointed for an initial two-year term beginning September 1 of every even-numbered year and may be reappointed. The Governor must appoint two judges to each of the five initial Business Court divisions.

Forum Selection

Under the TBOC, a corporation may include a provision in its governing documents (certificate of formation, company agreement, or bylaws) selecting a Texas court as the exclusive forum and venue for internal entity claims. The 2025 TBOC amendments specifically allow Texas entities to require that internal entity claims be brought in the Texas Business Court when it has jurisdiction. These provisions are enforceable even if not signed by the person to be bound, and they may also include prospective jury trial waivers.

Takeaway

The Texas Business Court offers a credible, specialized alternative to Delaware’s Court of Chancery for many disputes. Companies should evaluate whether the Business Court’s jurisdiction, procedures, and developing body of case law align with their litigation strategy and risk profile.

The opinions expressed are those of the authors and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For more information, please contact Byron F. Egan or a member of the Corporate & Securities practice.

Meet Byron

Byron F. Egan regularly handles business combinations of corporations, limited liability companies, and partnerships, including mergers and acquisitions, purchases and sales of stock, and other equity interests, and sales and exchanges of assets. He also handles the related entity governance and structure issues. In 2025, Byron published the fifth edition of EGAN ON ENTITIES: Corporations, Partnerships and Limited Liability Companies in Texas, a treatise on Texas, Delaware and other entity laws. Byron is the only attorney to have received the Burton Award for Legal Achievement four times and is consistently recognized among the top corporate and M&A lawyers in Texas by several publications.

Byron has consistently been recognized by Who’s Who Legal for over 15 years, including as a “Recommended” attorney in M&A and Corporate Governance and as a “Thought Leader” for M&A. He has also been named among The Best Lawyers in America since 1993 in the areas of Corporate Compliance Law, Corporate Governance Law, Corporate Law, and Mergers and Acquisitions Law.