Energy Founders Fund v. Daskevich

FILED IN
BUSINESS COURT OF TEXAS
BEVERLY CRUMLEY, CLERK
ENTERED
5/29/2026
2026 Tex. Bus. 34

THE BUSINESS COURT OF TEXAS
ELEVENTH DIVISION

ENERGY FOUNDERS FUND, LP, §
§
Plaintiff/Counter-Defendant, §
§
v. §
§
PHILLIP DASKEVICH and CRIS §
CURNUTT DASKEVICH, §
§
Defendants/Counter-Plaintiffs, §
§ Cause No. 26-BC11A-0004
§
PHILLIP DASKEVICH and CRIS §
CURNUTT DASKEVICH, both §
individually, and derivatively on §
behalf of GAGE WESTERN LLC, §
§
Third-Party Plaintiffs, §
§
v. §
§
GAGE WESTERN LLC, et al., §
§
Third-Party Defendants. §

═══════════════════════════════════════════════════════
MEMORANDUM OPINION AND ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT ON AFFILIATE STATUS
═══════════════════════════════════════════════════════
INTRODUCTION

¶ 1. This corporate governance dispute arises from the sale of ownership

interests in Gage Western, LLC (“Gage Western”). At its core, the controversy turns

on a single contractual term: “Affiliate.” Although the term appears in only one

operative provision of Gage Western’s Third Amended and Restated Limited

Liability Company Agreement (the “Company Agreement”), it has spawned

competing interpretive theories, cross-motions for summary judgment, and a

sprawling evidentiary record.

¶ 2. The battlefield is the Company Agreement’s “drag along” provision—

a common corporate mechanism that allows a majority owner, under certain

conditions, to compel minority owners to participate in a sale of the entire company.

The dispositive question is whether Plaintiff Energy Founders Fund, LP (“EFF”)

validly triggered that right when it pursued a sale of its interest. The answer depends

on whether the buyer, GW Allen, LLC (“GW Allen”), was an “Affiliate” of EFF when

the transaction occurred.

¶ 3. Under the Company Agreement, a drag-along transaction is valid only

if it is a bona fide sale to a purchaser that is not an Affiliate of the dragging member.

Defendant Phillip Daskevich contends that GW Allen, though structured as an

independent third-party buyer, was, in reality, EFF’s Affiliate. He emphasizes that

as part of the broader deal structure, EFF bargained for substantial post-closing

MEMORANDUM OPINION AND ORDER, PAGE 2
governance rights in GW Allen, including future board seats and veto powers. In his

view, because the overall transaction was dependent on EFF obtaining these future

interests, the target vehicle became an Affiliate of EFF prior to closing.

¶ 4. EFF counters with a straightforward temporal argument: the Company

Agreement defines an “Affiliate” exclusively in terms of existing control—not future

rights that spring into existence only after the ink dries on the closing documents.

According to EFF, the relevant inquiry is whether it actually possessed the power to

direct GW Allen’s management or policies before the transaction closed. EFF

contends that, until closing occurred, GW Allen was owned and controlled

exclusively by PJC Investments, LLC (“PJC”), an independent third party, and that

EFF possessed no present governance authority over GW Allen whatsoever.

¶ 5. Having considered the briefing, evidence, arguments of counsel, and

applicable law, the Court concludes that EFF’s interpretation is the correct one. The

Company Agreement’s definition of “Affiliate” requires present, existing control,

not contingent future rights that materialize only after a transaction is

consummated. While the Court agrees with Daskevich that the transaction

documents must be read together, those documents ultimately confirm that GW

Allen remained under PJC’s exclusive control until closing. Because EFF lacked any

present authority over GW Allen before that time, GW Allen was not its Affiliate.

Daskevich’s motion is therefore DENIED, and EFF’s cross-motion is GRANTED.

MEMORANDUM OPINION AND ORDER, PAGE 3
BACKGROUND

A. The Company Agreement and the parties’ ownership structure

¶ 6. Gage Western is governed by its Company Agreement dated March 3,

2020. 1 The Agreement establishes a multi-class ownership structure and regulates,

among other matters, transfers of membership interests and the exercise of drag-

along rights.

¶ 7. EFF held Class A membership interests in the Company, while Phillip

and Cris Daskevich held substantial minority interests through Class B and other

units. 2 Phillip Daskevich also served as the Class B Director. The board consisted of

three directors: a Class A Director, a Class B Director, and a Management Director. 3

¶ 8. Article 9 of the Agreement governs transfers of membership interests.

Section 9.2 provides that a selling member—designated as the “Dragging

Member”—may compel all other members to liquidate their units in connection with

a “Controlling Sale.” The Agreement defines a Controlling Sale as “a bona fide

sale . . . to one or more persons who are not Affiliates of the Dragging Member.” 4 To

invoke this mechanism, the Dragging Member must issue a “Drag Along Notice” to

the remaining members “either before or after a Notice of Proposed Transfer.” 5

1
Def.’s Ex. A (Gage Western Company Agreement).
2
Id. at Schedule 1.
3
Id. § 7.1(b).
4
Id. § 9.2(c).
5
Id.
MEMORANDUM OPINION AND ORDER, PAGE 4
¶ 9. The Company Agreement defines “Affiliate” as follows:

“Affiliate” means, when used with reference to a specified
Person, any other Person that directly, or indirectly through one
or more intermediaries, controls, is controlled by or is under
common control with the Person specified. For purposes of the
foregoing, “control,” “controlled by” and “under common
control with” with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person . . .
whether through the ownership of voting securities, partnership
interests or other equity interests, or by contract or otherwise. 6

¶ 10. That definition is the fulcrum on which this dispute turns.

B. The proposed sale to PJC and the formation of GW Allen

¶ 11. In mid-2024, EFF entertained a strategic offer to sell its interest in

Gage Western to PJC, an independent investment firm. PJC’s letter of intent

(“LOI”) proposed that “PJC Investments, LLC, or any of its subsidiaries” would

acquire Gage Western for $4.5 million. 7 The LOI explicitly contemplated that PJC

might complete the purchase through a newly formed acquisition subsidiary formed

for that purpose—a routine feature of modern commercial transactions. 8

¶ 12. Following initial negotiations, PJC formed GW Allen to serve as that

special-purpose acquisition vehicle. Coleman Curry, a member and Chief Operating

6
Id. § 1.8.
7
Pl.’s Ex. 3 (LOI).
8
See Sandra Feldman, The Different Types and Methods of Mergers and Acquisitions, WOLTERS KLUWER (Aug.
7, 2024), https://www.wolterskluwer.com/en/expert-insights/the-different-types-and-methods-of-
mergers-and-acquisitions (explaining that, in a triangular merger, “the subsidiary will be newly formed for
the sole purpose of assisting the parent in acquiring the target”); see also Pl.’s Ex. 15 (Curry Aff.) ¶ 5.
MEMORANDUM OPINION AND ORDER, PAGE 5
Officer of PJC, formally organized GW Allen in September 2024 and served as its

sole manager. 9 Under its organizational documents, GW Allen was structured as a

manager-managed limited liability company, vesting all management authority in

Curry alone. 10 PJC was GW Allen’s only member and sole equity owner. 11

¶ 13. Curry’s undisputed testimony confirms this governance structure. He

attested that, at all times before the November 15, 2024 closing: (a) PJC owned 100%

of GW Allen’s membership interests; (b) EFF held no equity stake or membership

interest in GW Allen; (c) EFF possessed no right to manage or direct GW Allen; (d)

EFF lacked any legal authority to bind GW Allen; and (e) every decision concerning

GW Allen—from its initial capitalization to its pursuit of Gage Western—was made

exclusively by PJC through Curry as manager. 12

¶ 14. John Donovan likewise attested on behalf of EFF that “[a]t no time

prior to the closing of the transaction on November 15, 2024 did EFF: have any right

to direct or control GW Allen’s management or policies; have any voting rights or

governance rights in GW Allen; have any contractual rights to control GW Allen; or

exercise any control over GW Allen’s operations or decision making.” 13 Donovan

stated that EFF’s negotiations with PJC regarding GW Allen’s future governance

9
Pl.’s Exs. 7–9 (Minutes of Organizational Meeting), 8 (Certificate of Formation), and 9 (Certificate of
Authority); Curry Aff. ¶¶ 2–3.
10
See Pl.’s Exs. 7–9; Curry Aff. ¶ 3.
11
Ex. 3.1 to Pl.’s Ex. 10 (GW Allen Company Agreement).
12
Curry Aff. ¶¶ 2–4.
13
Pl.’s Ex. 18 (Donovan Aff.) ¶ 4.
MEMORANDUM OPINION AND ORDER, PAGE 6
structure “related only to a potential future ownership and governance structure

after closing; were contingent on the transaction closing and EFF receiving equity;

and did not grant EFF any present rights to control GW Allen before closing.” 14

¶ 15. On August 7, 2024, EFF issued a Notice of Transfer of Units to the

remaining members, outlining its intent to execute a “Controlling Sale” under

Section 9.2 and advising them of their contractual right of first offer. 15 In September

2024, the Gage Western board approved EFF’s transfer pursuant to a proposed

Membership Interest Purchase Agreement (“MIPA”). 16 The MIPA was approved by

majority vote over the objection of Phillip Daskevich, who contested whether GW

Allen qualified as a non-affiliate purchaser and argued that the deal required

additional corporate approvals.

¶ 16. As the transaction advanced toward closing, EFF and PJC negotiated a

future governance framework for the post-acquisition operating company. 17 These

negotiations culminated in a proposed First Amended and Restated Limited Liability

Company Agreement for GW Allen (“A&R Agreement”). 18 This document, designed

to take effect after closing, outlined a new governing matrix for GW Allen that would

grant EFF board-designation rights, quorum protections, and veto authority over

14
Id. ¶ 6.
15
Def.’s Ex. E (Notice of Transfer of Units); Pl.’s Ex. 12 (Notice of Right of First Offer).
16
Pl.’s Exs. 6 (Written Consent of Board), 17 (Meeting Minutes) ¶ 11.
17
Curry Aff. ¶ 7; Donovan Aff. ¶ 6.
18
Ex. D (proposed A&R Agreement) to Pl.’s Ex. 4.
MEMORANDUM OPINION AND ORDER, PAGE 7
certain corporate actions. 19 In his affidavit, Curry stated that the A&R Agreement

was inoperative prior to closing, and that the pre-closing drafts were blueprints for

future governance rather than reflections of present control. 20

¶ 17. On November 15, 2024, EFF issued its formal Drag Along Notice to

compel the Daskeviches’ participation in the sale. 21 The broader transaction closed

through the final execution of the MIPA later that same day, though the Daskeviches

refused to execute the closing documents. 22

C. Prior summary-judgment rulings narrowing the dispute

¶ 18. This Court has previously issued two summary-judgment orders that,

taken together, narrowly frame the remaining issue before the Court.

¶ 19. On April 10, 2026, the Court ruled that Section 9.2 of the Company

Agreement required only “Board Approval,” meaning a simple majority vote, for a

transfer to invoke the drag-along mechanism. The Court rejected the Daskeviches’

contention that the transaction required separate, unanimous “Special Director

Approval” under Section 7.2(c)(ii). In that opinion, the Court reserved judgment on

whether the transaction qualified as a “Controlling Sale” to a non-affiliate

purchaser.

19
Id.; Donovan Aff. ¶ 7.
20
Curry Aff. ¶ 7.
21
Pl.’s Ex. 12.
22
Def.’s Ex. G (MIPA).
MEMORANDUM OPINION AND ORDER, PAGE 8
¶ 20. In a separate opinion four days later, on April 14, 2026, the Court ruled

that the Daskeviches still owned their membership interests in Gage Western

because they had declined to execute the closing documents on November 15, 2024.

The Court emphasized again the limited scope of that ruling and expressly reserved

judgment on whether the drag-along mechanism had been validly triggered in the

first instance.

¶ 21. The parties’ cross-motions now bring that sole remaining question to

the forefront: Did GW Allen qualify as a non-“Affiliate” purchaser within the

meaning of Section 9.2(c)? 23

SUMMARY-JUDGMENT STANDARD

¶ 22. Summary judgment is governed by Texas Rule of Civil Procedure 166a.

A movant “bears the burden to show that no genuine issue of material fact exists and

that it is entitled to judgment as a matter of law.” 24 The nature of that burden varies

by posture. A plaintiff must conclusively establish all essential elements of its

claim. 25 A defendant must either conclusively negate at least one element of the

plaintiff’s claim or prove all elements of an affirmative defense. 26

23
The parties frame the relevant inquiry as whether GW Allen was an Affiliate of EFF. The Court addresses
the issue on that basis. The Court notes, however, that a credible argument could be made that the focus
should be on PJC, because it was PJC that made the initial offer to acquire Gage Western, sent the letter of
intent, and later formed GW Allen as the acquisition vehicle. Regardless, the distinction is not outcome
determinative. The summary-judgment record contains no evidence that EFF controlled, was controlled by,
or was under common control with PJC at any relevant time. Nor has Daskevich argued otherwise.
24
ConocoPhillips Co. v. Koopmann, 547 S.W.3d 858, 865 (Tex. 2018) (citing TEX. R. CIV. P. 166a(c)).
25
See MMP, Ltd. v. Jones, 710 S.W.2d 59, 60 (Tex. 1986) (per curiam).
26
Stanfield v. Neubaum, 494 S.W.3d 90, 96 (Tex. 2016).
MEMORANDUM OPINION AND ORDER, PAGE 9
¶ 23. In evaluating whether a fact issue exists, a court takes as true all

evidence favorable to the nonmovant, indulges every reasonable inference in the

nonmovant’s favor, and resolves any doubts against the movant. 27 The court may not

weigh the evidence or resolve credibility determinations at this stage; its role is

limited to deciding whether a genuine fact issue exists for trial. 28

¶ 24. Questions of contract interpretation are especially well suited for

summary judgment. 29 In construing a contract, the Court’s objective is to ascertain

and give effect to the parties’ intent as expressed in the agreement itself. 30 To do so,

the Court considers the contract as a whole, harmonizing and giving effect to all

provisions so that none are rendered meaningless. 31

¶ 25. This analysis begins—and, if possible, ends—with the contract’s plain

language. 32 If the language is susceptible to a definite or certain legal interpretation,

it is unambiguous and must be enforced as written. 33 If, on the other hand, the

contract is susceptible to more than one reasonable interpretation, it is

27
ConocoPhillips, 547 S.W.3d at 865.
28
Huckabee v. Time Warner Ent. Co. L.P., 19 S.W.3d 413, 422–23 (Tex. 2000); see also Ortega v. Pean, No.
01-18-00249-CV, 2019 WL 1560859, at *10 (Tex. App.—Houston [1st Dist.] Apr. 11, 2019, pet. denied)
(mem. op.) (“[I]f a summary judgment motion involves the credibility of affiants, or the weight to be given to
evidence, the motion should not be granted.” (internal quotation marks omitted)).
29
See Hallmark v. Port/Cooper-T. Smith Stevedoring Co., 907 S.W.2d 586, 590 (Tex. App.—Corpus Christi-
Edinburg 1995, no writ); Tellepsen Builders, L.P. v. Kendall/Heaton Assocs., Inc., 325 S.W.3d 692, 696 (Tex.
App.—Houston [1st Dist.] 2010, pet. denied).
30
Italian Cowboy Partners, Ltd. v. Prudential Ins. Co. of Am., 341 S.W.3d 323, 333 (Tex. 2011); J.M.
Davidson, Inc. v. Webster, 128 S.W.3d 223, 229 (Tex. 2003).
31
Italian Cowboy, 341 S.W.3d at 333.
32
Id. (citing Progressive Cnty Mut. Ins. Co. v. Kelley, 284 S.W.3d 805, 807 (Tex. 2009) (per curiam)).
33
J.M. Davidson, 128 S.W.3d at 229; Coker v. Coker, 650 S.W.2d 391, 393 (Tex. 1983).
MEMORANDUM OPINION AND ORDER, PAGE 10
ambiguous. 34 Only in that circumstance may the court consider extraneous evidence

“to determine the true meaning of the instrument.” 35

¶ 26. These principles apply with equal force to limited liability company

agreements. 36 Such agreements govern an LLC’s internal affairs and may include

“any provisions for the regulation and management” of the LLC’s affairs that are not

inconsistent with law. 37 The Court construes such agreements as a whole and gives

their terms their plain, ordinary, and accepted meanings unless the agreement itself

indicates a different or technical usage. 38 When the provisions of a company

agreement are unambiguous, a court must enforce them as written. 39

ANALYSIS

A. The “Affiliate” definition requires actual, present control.

¶ 27. The Court’s analysis begins and ends with the Company Agreement’s

plain text. The definition of “Affiliate” turns on “control,” which the Agreement

defines as “the possession, directly or indirectly, of the power to direct or cause the

direction of the management and policies” of the relevant entity, “whether through

34
Italian Cowboy, 341 S.W.3d at 333 (citing J.M. Davidson, 128 S.W.3d at 229).
35
Id. at 333–34 (quoting David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450–51 (Tex. 2008) (per curiam)).
36
Bay Area RV Parks, L.L.C. v. WGB RV Parks, LLC, No. 01-21-00085-CV, 2023 WL 2248738, at *6 (Tex.
App.—Houston [1st Dist.] Feb. 28, 2023, pet. denied) (mem. op.) (citing Abdullatif v. Choudhri, 561 S.W.3d
590, 609–10 (Tex. App.—Houston [14th Dist.] 2018, pet. denied)).
37
TEX. BUS. ORGS. CODE § 101.052(a), (d); Bay Area RV Parks, L.L.C., 2023 WL 2248738, at *6.
38
See Bay Area RV Parks, L.L.C., 2023 WL 2248738, at *6 (citing URI, Inc. v. Kleberg Cnty., 543 S.W.3d
755, 764 (Tex. 2018)).
39
See id.
MEMORANDUM OPINION AND ORDER, PAGE 11
the ownership of voting securities, partnership interests or other equity interests, or

by contract or otherwise.” Three distinct features of that definition are dispositive.

¶ 28. First, the definition is framed entirely in the present tense. An Affiliate

is any entity that “controls,” “is controlled by,” or “is under common control with”

the specified person. “Control,” in turn, means the present “possession” of the

power to direct management and policies. The term “possession” is not an incidental

choice of words. It denotes current, existing authority, not a future or contingent

entitlement to it. 40 A party negotiating for future rights does not yet possess them,

no matter how certain their eventual receipt may seem.

¶ 29. Second, the definition focuses on actual operational governance, not on

who had negotiating leverage during the transaction. Under the Agreement’s plain

language, “control” means “the power to direct or cause the direction of [an

entity’s] management and policies”—a standard corporate law concept denoting

day-to-day operational command. 41 The relevant inquiry is therefore

straightforward: before closing, who could actually run GW Allen? Who had

authority to appoint managers, bind the company, or direct daily operations? The

40
Possession, BLACK’S LAW DICTIONARY (12th ed. 2024) (“The fact of having or holding property in one’s
power; the exercise of dominion over property.”); Possession, MERRIAM-WEBSTER ONLINE DICTIONARY,
https://www.merriam-webster.com/dictionary/possession (last visited May 28, 2026) (“[T]he act or
condition of having or taking into control.”).
41
Darocy v. Abildtrup, 345 S.W.3d 129, 137 (Tex. App.—Dallas 2011, no pet.) (adopting substantially similar
definition of “control” from federal securities law); see also Control, BLACK’S LAW DICTIONARY (12th ed.
2024) (“The direct or indirect power to govern the management and policies of a person or entity, whether
through ownership of voting securities, by contract, or otherwise; the power or authority to manage, direct,
or oversee.”).
MEMORANDUM OPINION AND ORDER, PAGE 12
undisputed answer is PJC—not EFF, which merely negotiated for rights it hoped to

receive after closing.

¶ 30. Third, the phrase “by contract or otherwise,” which Daskevich seizes

upon, expands the methods by which control may be established, but it does not

eliminate the temporal requirement that control must presently exist. At a basic

level, the Court agrees with Daskevich that this catch-all language prevents parties

from hiding affiliate relationships behind clever labels or corporate subterfuge. 42 It

rightly captures arrangements that confer actual, operative authority even without

majority ownership, such as voting trusts, pooling agreements, or board-control

agreements. It does not, however, override the requirement that control must

presently reside in the specified person. To hold otherwise would be to read the word

“possession” completely out of the definition.

B. Reading the transaction documents as a whole confirms that GW Allen was
controlled by PJC, not EFF.

¶ 31. Daskevich is correct as a matter of law that related transaction

documents may be read together to ascertain the parties’ intent. 43 The Court has

therefore examined the entire transactional record: the LOI, the MIPA, GW Allen’s

formation documents, the pre-closing drafts, and the A&R Agreement. Read

42
See Def.’s Mot. ¶¶ 38–40, 46–52.
43
Ft. Wor. Indep. Sch. Dist. v. City of Ft. Wor., 22 S.W.3d 831, 840 (Tex. 2000); Def.’s Mot. ¶ 31.
MEMORANDUM OPINION AND ORDER, PAGE 13
together, these materials confirm that GW Allen was under PJC’s exclusive control

before closing.

¶ 32. The record at every stage reflects PJC’s unbroken ownership and

command. From the outset, PJC’s LOI proposed that “PJC Investments, LLC, or any

of its subsidiaries” would acquire Gage Western 44—placing the buyer squarely

within PJC’s organizational family from the beginning. PJC then formed GW Allen

as a wholly owned, single-member acquisition vehicle. 45 Curry, PJC’s COO,

organized the entity and served as its sole manager. 46 Before closing, EFF held no

equity in GW Allen, no voting rights, no authority to appoint or remove managers or

directors, and no power to bind or direct the entity. 47 PJC, acting through Curry,

made every decision concerning GW Allen’s formation, capitalization, and deal

strategy. 48

¶ 33. No evidence in the record contradicts this governance structure. Curry

testified that PJC exclusively owned and controlled GW Allen before closing, and

Donovan’s testimony was to the same effect. He confirmed that before closing, EFF

did not hold any “right to direct or control GW Allen’s management or policies,” any

“voting rights or governance rights in GW Allen,” or any “contractual rights to

44
Pl.’s Ex. 3.
45
Curry Aff. ¶¶ 2–3.
46
Pl.’s Exs. 7–9; Curry Aff. ¶¶ 2–3.
47
Curry Aff. ¶¶ 3–4.
48
Id. ¶ 4.
MEMORANDUM OPINION AND ORDER, PAGE 14
control GW Allen.” 49 Donovan also attested that the negotiations over the A&R

Agreement concerned only future post-closing governance rights and “did not grant

EFF any present rights to control GW Allen before closing.” 50

¶ 34. Daskevich points to no contrary evidence showing that EFF possessed

any actual authority over GW Allen at any time before closing. Instead, his defense

relies on a retroactivity theory—arguing that the rights EFF received at closing

under the A&R Agreement somehow reached back in time to taint the pre-closing

entity. 51 This temporal flaw is fatal to his argument.

¶ 35. The pre-closing drafts and emails on which Daskevich relies are

entirely consistent with this timeline. They reflect active negotiation—which is

what independent parties who lack present rights must do to obtain future ones. For

example, EFF initially proposed a three-person board for the post-closing version of

GW Allen, including two EFF-designated seats. 52 PJC rejected that proposal, and

the parties eventually agreed on a five-member board consisting of two EFF

directors, two PJC directors, and a mutually selected fifth. 53 This back-and-forth

negotiation is difficult to reconcile with the notion that EFF already controlled GW

Allen. If EFF truly possessed the authority to dictate GW Allen’s governance before

49
Donovan Aff. ¶ 4.
50
Id. ¶ 6.
51
See Def.’s Resp. to Pl.’s Cross-Mot. ¶¶ 14–19.
52
See Ex. B to Pl.’s Ex. 4 (email negotiations); Ex. D § 7.1 to Pl.’s Ex. 4.
53
See Pl.’s Ex. 13 (executed version of A&R Agreement) § 7.1(a).
MEMORANDUM OPINION AND ORDER, PAGE 15
closing, PJC’s resistance would have been meaningless. The negotiating record

therefore does not establish pre-closing control; it confirms that EFF was bargaining

for rights it did not yet possess.

C. The phrase “in connection with” does not make post-closing rights
retroactively operative.

¶ 36. Daskevich’s most textually grounded argument rests on Section

9.2(c)’s phrasing: that drag-along rights apply “[i]n connection with the proposed

Transfer” of units “to one or more persons who are not Affiliates of the Dragging

Member.” He argues that this language—“in connection with”—is deliberately

expansive and requires the Court to view the transaction as an integrated whole,

looking past individual documents to examine the final destination of the deal. 54

¶ 37. The Court agrees, up to a point, that the phrase “in connection with” is

broad language requiring the transaction to be evaluated as a whole. And the Court

has done exactly that. But even viewing the transaction as an integrated whole,

Daskevich’s argument still fails because the decisive issue is not which documents

the Court may consider, but what type of control those documents require.

¶ 38. Even read broadly, the phrase “in connection with” cannot alter the

definitive timeline established by the contract. Section 9.2(c) conditions the drag-

along on a “proposed Transfer”—a transfer that, by definition, has not yet

54
Def.’s Resp. to Pl.’s Cross-Mot. ¶¶ 2–8.
MEMORANDUM OPINION AND ORDER, PAGE 16
occurred 55—to persons “who are not Affiliates” of the Dragging Member. These are

present-tense concepts evaluated before the transaction closes. The “in connection

with” phrase sweeps in related documents for interpretive context, but it does not

authorize the Court to declare a pre-closing entity to be an affiliate based on rights

that spring into existence only after the transaction is consummated.

¶ 39. The operational sequencing of the drag-along mechanism reinforces

this reading. Section 9.2 authorizes a Dragging Member to issue a Drag Along Notice

“either before or after a Notice of Proposed Transfer.” Both notices are pre-closing

mechanisms designed to assemble the company’s equity in preparation for a future

sale. In ordinary commercial practice, those notices are delivered weeks before

closing. 56 If the validity of those notices turned on post-closing governance

documents, the legal status of an already-issued notice could not be verified until

after closing. This would make the drag-along mechanism commercially unworkable

and would leave transactions in an extended state of limbo.

¶ 40. The Court therefore rejects Daskevich’s retroactivity theory. The A&R

Agreement can indeed be read alongside the other transaction documents, but it

cannot be used to shift post-closing governance rights backward in time. If the

drafters of the Company Agreement had intended to bar drag-along transactions

55
Proposed, THE COMPACT OXFORD ENGLISH DICTIONARY (2d ed. 1991) (“Put forward for consideration or
adoption . . . .”).
56
See Primexx Energy Opportunity Fund, LP v. Primexx Energy Corp., 2025 Tex. Bus. 9, ¶ 180, 709 S.W.3d
619, 655 (1st Div.) (“[A]dvance notice requirements are common with drag-along rights.”).
MEMORANDUM OPINION AND ORDER, PAGE 17
where a seller rolls over equity or retains post-closing board seats, they could easily

have written a forward-looking restriction. They chose not to do so. 57

D. The chronological record does not establish pre-closing control.

¶ 41. Daskevich places particular emphasis on one chronological detail. He

points to John Donovan’s August 17, 2024 written consent approving a drag-along

transfer to “GW Allen, LLC,” 58 even though GW Allen did not legally exist until

September 3, 2024. Daskevich argues this chronology reveals an insider-

constructed transaction in which EFF was controlling the buyer before the buyer

existed. 59

¶ 42. The Court acknowledges that this sequence is unusual, but it does not

establish control under the Agreement’s definition. When Donovan signed the

August 17 consent, GW Allen did not yet exist as a legal entity. As a matter of basic

logic, then, EFF could not have exercised governance authority over GW Allen at

that point because there was no entity to govern. And once GW Allen was organized

in September 2024, the undisputed evidence shows that PJC owned it entirely and

Curry managed it exclusively. 60 Accordingly, while the pre-formation activity

57
See Waste Mgmt. of Tex., Inc. v. Stevenson, 622 S.W.3d 273, 286 (Tex. 2021) (explaining that Texas’s
strong public policy favoring parties’ freedom of contract permits parties to “bargain for mutually agreeable
terms and allocate risks as they see fit”); U.S. Denro Steels, Inc. v. Lieck, 342 S.W.3d 677, 682 (Tex. App.—
Houston [14th Dist.] 2011, pet. denied) (enforcing “what is written in the contract, not . . . what one side
contends they intended but failed to say”).
58
Pl.’s Ex. 6.
59
Def.’s Mot. ¶¶ 49–50.
60
Pl.’s Exs. 7–9; Curry Aff. ¶¶ 2–4.
MEMORANDUM OPINION AND ORDER, PAGE 18
almost certainly reflects advance planning and coordination between the parties, it

does not demonstrate the exercise of present operational control over an existing

entity.

¶ 43. Moreover, the broader problem with Daskevich’s chronology argument

is that it proves too much. In virtually every corporate acquisition involving a newly

formed special-purpose acquisition vehicle, the target entity does not exist at the

time the seller and acquiror first begin coordinating. The seller often knows who will

own the buyer, what governance rights the seller may receive post-closing, and how

the acquisition vehicle will be capitalized, all before the vehicle is formed. None of

that transactional awareness constitutes “control” of the entity. The alternative

interpretation would cast doubt on virtually any drag-along transaction involving a

newly formed acquisition vehicle, a disruptive result the parties plainly did not

intend and that the Agreement’s text does not support.

E. Daskevich’s interpretation would produce commercially unreasonable
results.

¶ 44. The Court’s textual analysis is sufficient to resolve this dispute. But

even if Daskevich’s interpretation were textually plausible, Texas law counsels

against contract interpretations that produce commercially unreasonable results,

absent clear contractual language requiring that outcome. 61

61
See FPL Energy, LLC, v. TXU Portfolio Mgmt. Co., L.P., 426 S.W.3d, 59 63 (Tex. 2014) (“[W]e construe
contracts from a utilitarian standpoint bearing in mind the particular business activity sought to be served.”);
MEMORANDUM OPINION AND ORDER, PAGE 19
¶ 45. Daskevich’s interpretation would produce exactly that kind of

untenable result. Rollover equity and post-closing board participation are common,

ubiquitous features of modern merger and acquisition transactions. 62 Sellers

frequently retain minority equity interests, board-designation rights, veto

protections, or other governance participation in the acquiring entity as part of the

transaction consideration. Under Daskevich’s theory, however, the mere negotiation

of such post-closing rights would transform an otherwise independent buyer into an

“Affiliate” during the drafting phase, nullifying the drag-along rights the parties

expressly bargained for in the Company Agreement.

¶ 46. Moreover, if “Affiliate” status could be decided based on post-closing

rights, Daskevich’s theory provides no principled stopping point. The theory would

apply equally to a seller who merely accepts passive rollover equity as consideration

and to a seller who negotiates more substantial future governance protections.

Although the former is plainly routine, Daskevich offers no workable standard for

determining when future contingent rights become sufficient to establish present

“control.” Courts would be left to draw inherently subjective lines regarding how

The Mark at Weatherford Owner, LLC, v. German, 2026 Tex. Bus. 22, ¶ 34, 2026 WL 1266173, at *6 (8th
Div.) (mem. op.).
62
See, e.g., Casey S. August & Paul A. Gordon, Know Your ‘Roll’—Planning for Taxable Acquisitions of S
Corporations Involving Equity Rollover for Sellers, 18 No. 4 BUS. ENTITIES 4, 4 (2016) (explaining that rollover
equity is prevalent in acquisitions of S corporations); Wachovia Capital Partners, LLC v. Frank Harvey Inv.
Family Ltd. P’ship, No. 05-CVS 20568, 2007 WL 2570838, at *8 (N.C. Super. Mar. 5, 2007) (describing
rollover provisions as “perfectly normal” in merger transactions).
MEMORANDUM OPINION AND ORDER, PAGE 20
much anticipated future influence is too much. The Company Agreement supplies no

objective benchmark for making that determination because its Affiliate definition

is framed strictly around existing control relationships, not contingent future rights

that arise only after closing.

CONCLUSION

¶ 47. The Court’s ruling follows directly from the plain language of the

Company Agreement. The Agreement defines Affiliate status strictly by reference to

existing control relationships. Its text is written in present tense, its definition

requires actual “possession” of governance power, and its drag-along mechanics

apply to a “proposed transfer” before closing. Nothing in the Agreement allows post-

closing governance rights to retroactively create affiliate status.

¶ 48. The undisputed evidence shows that, before closing, GW Allen was

owned and controlled exclusively by PJC. EFF held no equity interest, no voting

authority, no managerial power, and no contractual right to direct GW Allen’s

affairs. Although EFF negotiated for substantial post-closing rights, it did not

possess those rights until the transaction closed.

¶ 49. IT IS THEREFORE ORDERED that Philip Daskevich’s motion for

partial summary judgment is DENIED and EFF’s cross-motion is GRANTED.

¶ 50. IT IS FURTHER DECLARED that:

MEMORANDUM OPINION AND ORDER, PAGE 21
1. GW Allen, LLC was not an “Affiliate” of Energy Founders Fund,

LP within the meaning of the Third Amended and Restated

Limited Liability Company Agreement of Gage Western LLC in

connection with the November 15, 2024 transaction; and

2. the transfer of units to GW Allen, LLC pursuant to the November

15, 2024 transaction did not violate Section 9.2(c) of the

Company Agreement.

IT IS SO ORDERED.

BRIAN STAGNER
Judge of the Texas Business Court,
Eleventh Division, sitting by
assignment

SIGNED: May 29, 2026

MEMORANDUM OPINION AND ORDER, PAGE 22