Lee C. Ritchie v. Ann Caldwell Rupe, as Trustee for the Dallas Gordon Rupe, III 1995 Family Trust
This case involves Ann Rupe, a minority shareholder and trustee for Buddy's Trust, who sued other shareholders and directors of Rupe Investment Corporation (RIC) for alleged oppressive actions and breach of fiduciary duties. Rupe claimed the defendants refused to buy her shares or meet with prospective outside buyers. The trial court ordered a $7.3 million buyout, which the court of appeals affirmed in part, finding the refusal to meet prospective purchasers oppressive, but remanding on valuation. The Texas Supreme Court reversed, ruling that the defendants' conduct was not 'oppressive' under the Texas receivership statute, as it did not involve an abuse of authority with intent to harm the corporation or create a serious risk of harm to it. The Court clarified that the statute only authorizes the appointment of a rehabilitative receiver and does not permit a direct buyout remedy. Additionally, the Court declined to recognize a new common-law cause of action for 'minority shareholder oppression,' citing existing statutory and common-law protections. The case was remanded to the court of appeals to consider Rupe's breach-of-fiduciary-duty claim and the potential for a buyout remedy under that claim.