A recent decision in Texas applies the economic test as part of a partnership dissolution operation. In CBIF Ltd P`ship v. TGI Fridays Inc., the Dallas Court of Appeal upheld the legal liquidation of a joint venture created to operate TGI Friday`s restaurants and coffee bars at DFW International Airport. The jurors found that the court`s dissolution jurisdiction was triggered by the three tests: “After a lengthy trial, the jury made the following findings: … TGIFJV`s economic objective had been unduly frustrated and probably thwarted in the future; CBIF conduct was not reasonably permitted to conduct TGIFJV in partnership with cbifif; and the joint venture was unable to continue its activities in accordance with its administrative documents. But the court of appeal was only concerned with economic evaluation. The main argument on appeal was that the company`s economic objective was never foiled because “the company made profits of more than $70 million between 1995 and 2013.” The court considered the joint venture agreement which stated that the objective was to “build, equip and operate the airport`s restaurants and coffee bars” and that the joint venture had entered into a lease agreement with the airport to achieve this. The evidence showed that the joint venture had lost the lease in a terminal and would likely lose the remaining land. Without the lease, the agreed economic objective of the joint venture is to “build, equip and operate for profit,” the court said, “unreasonably frustrated and will likely be frustrated in the future.” Deportation or legal dissociation in Florida is usually for breach of the duty of loyalty or diligence and only by agreement or legal process. However, the removal of deportation is an important task, with many complex legal and factual obstacles.
Professors Miller and Ragazzo have suggested that in a situation where there is a court order requiring liquidation, it may be preferable to pursue a less extreme remedy. The Courts of Texas that exercise their just powers undoubtedly have the power to put in place appropriate corrective measures. The Texas Supreme Court in Patton v. Nicholas said: “Wisdom seems to advise tailoring the remedy to fit the particular case. … [E]quity can do a great deal by combining minor remedies, including the exercise of its practice of retaining supervisory jurisdiction and reserving stricter measures as the last weapon against the recalcitrant, in order to avoid mismanagement or recurrent repression by a majority shareholder or a dominant and perverse group of shareholders.” The idea of violating an OPERATing LLC contract implies your financial interest in the business if other owners seek your withdrawal.