Supreme Court Shareholder Oppression Update: Cardiac Perfusion v. Hughes

Following up on last week’s decision that basically eliminated minority shareholder oppression claims (or more precisely, shareholder oppression remedies) in Texas, the state Supreme Court has reversed and remanded another such case that passed through the Dallas Court of Appeals a couple years ago. In Cardiac Perfusion Services, Inc. v. Hughes, the Court of Appeals had affirmed the trial court’s order of a $300,000 “fair value” buyout of the oppressed shareholder’s stock, holding that the majority’s oppressive conduct justified a departure from the “book value” buyout price provided for by the parties’ shareholder agreement. With court-ordered buyouts no longer a viable remedy for shareholder oppression claims, the Supreme Court vacated that portion of the judgment, but remanded the case to the trial court in the interests of justice in order to afford the minority shareholder an opportunity to try to establish liability under one or more of the alternative claims discussed last week in Ritchie v. Rupe.

Cardiac Perfusion Servs. Inc. v. Hughes, No. 13-0014