Christopher Babcock on Texas Business Code Change – 'Will make Texas a significantly more attractive jurisdiction'

Foley & Lardner LLP partner Christopher Babcock is highlighted in the Law360 article, “Amid Del. Corporate Law Overhaul Push, Texas Turns Up Heat,” for his recent appearance before the Texas Senate Committee on State Affairs.

Babcock told the committee that the proposed changes to Texas’ business code “will make Texas a significantly more attractive jurisdiction for companies to establish as their legal home” during his March 10, 2025, appearance.

“A basic premise of corporate governance is that decision-makers need to operate under rules that are predictable, stable, and knowable so that they can deploy capital without fear that their decisions will be second-guessed after the fact in hindsight,” he continued.

The Law360 article also cites a Foley Corporate Governance Update blog, which described the Texas legislation as proposing “a series of amendments to the Texas Business Organizations Code that would increase the certainty for how corporate decision-making is reviewed by the courts.”

These changes include codifying the business judgment rule, requiring a minimum ownership percentage for shareholders looking to bring derivative lawsuits, prohibiting the award of attorney fees when derivative suits result in a “disclosure-only” settlement; and permitting companies “to seek an upfront determination from a judge regarding the independence of directors serving on special committees before those directors are called into question as part of a derivative claim.”

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