JEAN CHRISTINE THOMPSON and THOMPSON PETROLEUM CORPORATION v. ANCHOR CAPITAL GP LLC and MICHAEL MANN
Cause No. 25-BC01B-0038
The Business Court of Texas, 1st Division
7/1/2026
2026 Tex. Bus. 41
BILL WHITEHILL
FILED IN BUSINESS COURT OF TEXAS BEVERLY CRUMLEY, CLERK ENTERED 7/1/2026
NUNC PRO TUNC MEMORANDUM OPINION AND ORDER ON DEFENDANTS’ MOTION FOR PARTIAL SUMMARY JUDGMENT
[¶ 1] This case is about whether defendants breached various duties owed to plaintiffs under a promissory note (Note),1 security agreement, and employment agreement. Before the court is Defendants’ Motion for Partial
[¶ 2] The pivotal issue is whether the Note is a “security” under the Texas Securities Act (TSA). After applying the Supreme Court’s test in Reves v. Ernst & Young, 494 U.S. 56, 63-64 (1990), the court concludes that the Note is not a TSA security. Accordingly, the court grants defendants’ motion.
[¶ 3] The parties are familiar with the facts the court discussed in its May 4, 2026, Memorandum Opinion and Order on Plaintiffs’ Motion for Summary Judgment. So, the court focuses on only those facts relevant to this opinion.
I. BACKGROUND
A. Factual Background2
1. The Parties
[¶ 4] Jean Thompson is an owner and President of Thompson Pеtroleum Corporation (TPC).3
[¶ 6] Michael Mann is the founder and CEO of defendant Anchor Capital GP LLC, a private equity investment brokerage comprised of Anchor and various subsidiaries.5
2. Thompson and Mann form a business relationship.
[¶ 7] Thompson and Mann met in 2022, after which Mann began offering her investment advice on alternative invеstments.6 Using Christy 2017, a holding company for the Thompson family’s investments, Thompson began investing millions into Anchor-managed funds.7
[¶ 8] In September 2024, Mann asked Thompson to loan Anchor money so he could buy out one of Anchor’s partners.8 She agreed contingent upon Mann providing a personal financial statement and loan guarantee.9 Mann signed a Secured Promissory Note, Security Agreement, and Mann’s Personal Guaranty to memorialize this agreement.10
[¶ 10] On May 5, 2025, Thompson exercised her rights to inspect the Collateral to verify that her loans to Anchor were adequately protected.12 To that end, she asked Anchor for access to its “boоks and records.”13
[¶ 11] Throughout that month, the parties communicated about the books and records request.14 But by early June, Thompson claimed that Anchor failed to produce the requested information.15 Approximately two weeks later, her outside counsel sent a letter requesting additional documents and answers to specific questions.16
[¶ 12] Mann sent multiple replies but refused to prоvide an audited personal financial statement that Thompson requested.17 So, in late June, Thompson’s counsel sent another letter about these issues.18 When Mann
[¶ 13] Plaintiffs claim that defendants have not cured any outstanding deficiencies highlighted in their last letter, which they sаy are an Event of Default under both the Note and Security Agreement.21 So, on July 22nd, Thompson sent Anchor a default notice and accelerated the loan.22
B. Procedural Background
[¶ 14] Plaintiffs sued the next month,23 and Defendants answered24. Plaintiffs later filed their First Amended Petition.25 Defendants then filed this motion,26 which plaintiffs opposed.27
A. Summary Judgment Standards
[¶ 15] At any time, a party may move with or without supporting evidence for a summary judgment as to all or any part of any causes of action asserted against it.
[¶ 16] Thereafter, the court shall render judgment if the pleadings, summary judgment filings, and properly filed evidence show that, except as to the amount of damages, there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law on the issues stated in the motion or in an answer or any other response.
[¶ 17] A court can grant a movant’s traditional summary judgment only if the movant’s evidence as a matter of law either proves all elements of its defense or disproves at least one еlement of the nonmovant’s claim. See e.g., Park Place Hosp. v. Estate of Milo, 909 S.W.2d 508, 511 (Tex. 1995) (causation disproved as a matter of law).
[¶ 18] So a summary judgment motion
Mack Trucks, Inc. v. Tamez, 206 S.W.3d 572, 581-82 (Tex. 2006) (citations omitted).
[¶ 19] A genuine fact issue exists if more than a scintilla of evidence supports the alleged fact. See Amazon.com Servs. LLC v. Grant, No. 05-23-01306, 2024 WL 5053063, at *2 (Tex. App.—5th Dist. Dec. 10, 2024, no pet.). Evidence is more than a scintilla when it “rises to a levеl that would enable reasonable and fair-minded people to differ in their conclusions.” King Ranch v. Chapman, 118 S.W.3d 742, 751 (Tex. 2003) (quoting Merrell Dow Pharms., Inc. v. Havner, 953 S.W.3d 706, 711 (Tex. 1997)). However, less than a scintilla exists when the evidence is “so weak as to do no more than create a mere surmise or suspicion” of a fact. Id. (quoting Kindred v. Con/Chem, Inc., 650 S.W.2d 61, 63 (Tex. 1983)).
[¶ 20] When a contract’s terms are unambiguous and the material facts are undisputed, compliance with those terms is a question of law. Hrdy v. Second St. Props., 649 S.W.3d 522, 554 (Tex. Aрp.—1st Dist. 2022, pet. denied).
[¶ 21] Accordingly, to decide this motion, the court must apply contractual construction principles to the Note and Security Agreement, Guaranty, Employment Agreement, the parties’ submissions, and the summary judgment evidence.
B. Contract Construction
[¶ 22] A court’s primary objective when construing contracts “is to ascertain and give effect to the parties’ intent as expressed in the instrument.” U.S. Polyco, Inc. v. Tex. Cent. Bus. Lines Corp., 681 S.W.3d 383, 387 (Tex. 2023) (quoting URI, Inc. v. Kleberg Cnty., 543 S.W.3d 755, 763 (Tex. 2018)).
[¶ 23] Usually, courts deem the contract alone to express the parties’ intent because it is objective, not subjective, intent that controls. Id.
[¶ 24] With unambiguous contracts, courts “can determine the parties’ rights and obligations under the agreement as a matter of law.” Inwood Nat’l Bank v. Fagin, No. 24-0055, 2025 WL 349890, at *4 (Tex. 2025) (per curiam) (quoting ACS Invs., Inc. v. McLaughlin, 943 S.W.2d 426, 430 (Tex. 1997)).
[¶ 25] A court’s primary purpose in statutory construction is to implement the Legislature’s intent by giving effect to every word, clause, and sentence. Sunstate Equip. Co. v. Hegar, 601 S.W.3d 685, 689-90 (Tex. 2020) (citation omitted). Indeed, statutory text is the “first and foremost” indication of legislative intent. Greater Hous. P’ship v. Paxton, 468 S.W.3d 51, 58 (Tex. 2015). Thus, courts apply the words’ common, ordinary meaning unless (i) the text supplies a different meaning or (ii) the common meaning produces absurd results. Fort Worth Transp. Auth. v. Rodriguez, 547 S.W.3d 830, 838 (Tex. 2018).
[¶ 26] Further, courts derive statutory meaning from the entire statute.
A. Introduction
[¶ 27] Defendants sought the following summary judgment rulings: (i) Thompson’s Texas Securities Act claim (Count 3) fails because the Note is not a security, and (ii) Thompson’s Breach of Guaranty claim (Count 2) fails because the Guaranty did not require Mann to audit his personal financial statement.28
[¶ 28] Plaintiffs responded that the court should deny the motion because (i) the Note is presumed a security, and defendants failed to rebut that presumption; and (ii) fact issues preclude summary judgment on a guaranty claim.29
[¶ 29] In a separate, June 18, 2026, order the court concluded that the Guaranty did not require Mann to provide an audited personal financial statement.30 Thus, the only remaining issue is whether the Note is a security.
1. Introduction
[¶ 30] The TSA31 creates civil liаbility for a person who offers or sells a security by means of an untrue statement of material fact or by means of a material misleading, omission of fact.
[¶ 31] The TSA broadly defines “securities.” See
[¶ 32] Determining whether documents are TSA securities is a matter of law. Grotjohn Precise Connexiones Intern., S.A. v. JEM Fin., Inc., 12 S.W.3d 859, 868 (Tex. App.—6th Dist. 2000, no pet.). Because the TSA closely mirrors the Federal Securities Act of 1933, Texas courts look to federal decisions to aid Texas’s interpretation of the TSA. See Searsy v. Com. Trading Corp., 560 S.W.2d 637, 639 (Tex. 1977).
2. Parties’ Arguments
[¶ 33] Defendants argue that the Note is merely a “commercial loan transaction” as opposed to a “security” and thus falls outside the TSA’s
[¶ 34] Accordingly, the court must determine the proper test before addressing the issue’s merits.
3. Securities Tests
[¶ 35] Since the Securities Act of 1933’s passage, courts have devised multiple approaches to determine whether promissory notes are “securities.” Reves, 494 U.S. at 63-64. Specifically, Reves discussed three such approaches various federal circuits had adopted: (i) the “investment versus commercial” test, (ii) the “family resemblance” test, and (iii) the Court’s Howey test.
a. “Investment versus Commercial” Test
[¶ 36] Under the “investment versus commercial approach” courts distinguish, upon the totality of the circumstances, notes issued in investment contexts (securities) versus notes issued in commercial or consumer contexts
b. “Family Resemblance” Test
[¶ 37] The “family resemblance test” presumes that any note with a term of more than nine months is a security. Reves, 494 U.S. at 63 (citing Exchange Nat. Bank of Chi. v. Touche Ross & Co., 544 F.2d 1126, 1137 (2nd Cir. 1976)). However, that test judicially excepts certain notes that are obviously not securities, such as (i) notes delivered in consumer financing, (ii) notes secured by home mortgages, (iii) short-term notes secured by liens on a small business or some of its assets, (iv) notes evidencing a “character” loan to bank customers, and (v) notes formalizing open-account debts incurred in the ordinary course of business. Exchange Nat. Bank, 544 F.2d at 1138.
[¶ 38] Further, that test allows parties to rebut the presumption if they can show the note either (i) “bears a strong family resemblance” to an item on
c. Howey Test
[¶ 39] The United States Supreme Court developed the Howey Test to determine if an instrument was an “investment contract,” but some courts later expanded its application to determine whether an instrument is a “note.” Id. Under this test, a note is effectively presumed to not be a security unless it evidences “(1) an investment, (2) in a common enterprise, (3) with a reasonable expectation of profits, (4) to be derived from the entrepreneurial or managerial efforts of others.” Id.
d. Adopted Test
[¶ 40] After analyzing all three tests, and noting that the “family resemblance” and “investment versus commercial” tests formulate the same general approach, the Reves Court rejected the Howey test and adopted the “family resemblance” test. Id. 64-65.
[¶ 41] Texas courts followed and also adopted the “family resemblance” test as the controlling test on this issue.35 Campbell v. C.D.
[¶ 42] Accordingly, this court applies the “family resemblance” test.
4. “Family Resemblance” Test
a. Applicable Law
[¶ 43] To prevail under the “family resemblance” test, the movant must rebut the note’s presumed security status by showing the note (i) is an enumerated judicial exception or (ii) bears a strong family resemblance to one of the exceptions. Reves, 494 U.S. at 64.
[¶ 44] Courts apply four factors when analyzing whether the note bears a family resemblance to one of the enumerated exceptions. First, courts consider the parties’ motivations for entering into the transaction. Id. 66. Evidence that the note is for an investment purpose as opposed to a commercial or consumer purpose suggests that the note is a security. Id. Second, courts examine the “plan of distribution” to determine whether it is
b. “Short-Term” Note Analysis
[¶ 45] Preliminarily, defendants assert that the Note is “a short-term note secured by a lien on a small business or some of its assets” thereby avoiding the need to analyze the “family resemblance” test’s factors.36 Because the parties agree that the Note is secured by Anchor’s assets as Collateral, the only relevant question is whether the Note is “short-term.”37
[¶ 46] Neither the TSA nor its federal analogues expressly define the phrase “short-term” regarding securities or other instruments. However, the statutes suggest that short-term notes are nine months or less. See
[¶ 47] Here, the Note has a four-year maturity.39 So, it is not a “short term” note nor excepted from the “family resemblance” test. Accordingly, the court applies the “family resemblance” test.
c. Reves Factors Analysis
[¶ 48] Because Plaintiffs’ response conceded that the “plan of distribution” factor (Factor 2) supports Defendants,40 the court need consider factors pertaining to only (i) the parties’ motives (Factor 1), (ii) the investing public’s reasonable expectations (Factor 3), and (iii) the presence of risk reducing measures (Factor 4).
1) Party Motives
[¶ 49] The first factor considers both parties’ purpose for entering into the Note transaction. Grotjohn, 12 S.W.3d at 868. If the note’s purpose is to raise money for the business enterprise’s use and the lender seeks to profit off the note, it is likely a security. Id. However, if the note’s purpose is to
[¶ 50] Here, Thompson is entitled to accruing interest on the Note, which the Reves court held is included in the definition of “profit.” Reves, 494 U.S. at 68 n.4. But Thompson admitted that she agreed to the Note at a below market rate and under a borrower-friendly payment schedule.41
[¶ 51] Thus, while she is entitled to interest, that the Note was favorable to the borrower as to both payment terms and interest rate suggests profit was not her primary motive. Cf. Grotjohn, 12 S.W.3d at 869 (favorable interest rate indicated profit was lender’s primary motivation); SEC v. Thompson, 732 F.3d 1151, 1162-63 (10th Cir. 2013) (attractive interest rate suggests profit was primary motive). These facts slightly suggests the Note is not a TSA security.
[¶ 52] However, Mann admits that he used the Note to raise capital to avoid diluting Anchor’s existing equity investor.42 More specifically, Mann said that the Note’s funds were used to help grow the business by paying
[¶ 53] Thus, the borrower’s and seller’s motives are mixed. But becаuse Mann’s motives are clearly for investment purposes, this factor favors the Note being a security. See Pollack v. Laidlaw Holdings, Inc., 27 F.3d 808, 812-13 (2d Cir. 1994) (buyer’s clearer motives suggest note is a security).
2) Investing Public’s Reasonable Expectations
[¶ 54] The third factor considers how the investing public would reasonably view a note. Reves, 494 U.S at 58-59. Courts analyzing this factor consider the (i) note’s express language, (ii) notes’ advertisement, and (iii) parties’ sophistication. See Kirschner v. JP Morgan Chase Bank, N.A., 79 F.4th 290, 308 (2d. Cir. 2023). Here, these considerations suggests that the Note is not a security.
[¶ 55] For starters, the Note is entitled a “Secured Promissory Note,” which without more does not give rise to public expectations that the Note is
[¶ 56] Second, there is no evidence suggesting that the Note was ever advertised as an investment. When a note is advertised as an investment, “in the absence of contrary indications it is reasonable for prospеctive purchasers to take the offeror at its word.” Stoiber v. S.E.C., 161 F.3d 745, 751 (D.C. Cir. 1998) (quoting Reves, 494 U.S. at 69) (internal citations omitted). Conversely, when express disclaimers are made indicating the note is not an investment, the investing public can reasonably conclude that the note is not a security. Id. Because there is no evidence suggesting the Note was ever
[¶ 57] Finally, there is no disputе whether these are sophisticated businesspersons as they are actively involved in handling finances and represented by sophisticated counsel. So, the court can reasonably conclude the parties had a solid understanding that the Note was a loan and not a business enterprise investment. See Banco Espanol de Credito v. Sec. Pac. Nat. Bank., 973 F.2d 51, 55 (2d Cir. 1995) (parties’ sophistication ensured ample notice given to instruments’ purpose).
[¶ 58] Based on the forgoing, the investing public would not reasonably view the Note as an investment. Accordingly, this factor weighs against the Note being a security.
3) Risk-Reducing Measures
[¶ 59] The final factor considers whether there are schemes in place that reduce the instrument’s risk and thereby moot the need for securities protections. Reves, 494 U.S. at 67.
[¶ 61] Having multiple risk-reducing measurеs in place strongly suggests the Note is not a TSA security. Accordingly, this factor also weighs against the Note being a security.
4) Conclusion
[¶ 62] Based on the above Reves analysis, the court concludes as a matter of law that the Note is not a security While the first factor leans toward the Note being a security, the other three factors support that the instrument in question is not a security.
[¶ 63] Consistent with this opinion and its prior June 18 order, Defendants’ Traditional Motion for Partial Summary Judgment is GRANTED.
So ORDERED.
BILL WHITEHILL
Judge of the Texas Business Court,
First Division
SIGNED: July 1, 2026
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Case Contacts
| Name | BarNumber | TimestampSubmitted | Status | |
|---|---|---|---|---|
| Alex More | amore@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Monica E.Gaudioso | mgaudioso@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Robert C.Rowe | rrowe@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Aaron C. O‘Dell | Aaron.ODell@winstontaylor.com | 7/2/2026 9:51:03 AM | SENT | |
| Sarah Frisbee | sfrisbee@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Nathaniel R.Lee | nathan.lee@winstontaylor.com | 7/2/2026 9:51:03 AM | SENT | |
| Business Court 1B | BCDivision1B@txcourts.gov | 7/2/2026 9:51:03 AM | SENT | |
| Marco Plata | mplata@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Docket South | ecf_houston@winston.com | 7/2/2026 9:51:03 AM | SENT | |
| Angie Barrera | abarrera@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Jamie Vargo | jamie.vargo@winstontaylor.com | 7/2/2026 9:51:03 AM | SENT | |
| Lance Currie | lcurrie@ccsb.com | 7/2/2026 9:51:03 AM | SENT | |
| Michael Pezzulli, Jr. | michael.pezzulli@winstontaylor.com | 7/2/2026 9:51:03 AM | SENT | |
| Sherry Stewart | sstewart@ccsb.com | 7/2/2026 9:51:03 AM | SENT |