A Texas court has ruled that a promissory note between Thompson Petroleum Corporation and Anchor Capital GP LLC is not considered a security under the Texas Securities Act (TSA). This decision, made by Judge Bill Whitehill on July 1, 2026, affects how business loans are classified and the responsibilities of parties involved in such agreements.
The case, Thompson v. Anchor Capital GP, was filed under docket number 25-BC01B-0038. It centers on whether the defendants breached their duties under a promissory note, security agreement, and employment agreement. The ruling is significant as it clarifies the legal definition of securities in the context of business loans and may influence future lending practices.
Background
The parties involved in this case are Jean Christine Thompson, the owner and president of Thompson Petroleum Corporation (TPC), and Michael Mann, the founder and CEO of Anchor Capital GP LLC, a private equity investment firm. The dispute arose after Thompson loaned money to Mann to buy out a partner in his firm, which was formalized through a secured promissory note and related agreements.
Thompson and Mann began their business relationship in 2022, with Thompson investing millions into Anchor-managed funds. In September 2024, Mann requested a loan from Thompson, which she agreed to under certain conditions, including a personal financial guarantee from Mann. However, disagreements arose regarding the documentation and transparency of the financial arrangements, leading Thompson to claim that Mann had defaulted on the agreement.
After several communications regarding the loan and the requested financial disclosures, Thompson ultimately sent a default notice to Mann and Anchor Capital, which led to the filing of the lawsuit in August 2025. Defendants responded to the lawsuit, and the case proceeded to this ruling on a motion for partial summary judgment.
The Ruling
The court ruled that the promissory note in question is not a security as defined by the TSA. Judge Whitehill stated, "the Note is not a TSA security. Accordingly, the court grants defendants’ motion." The court applied the “family resemblance” test established in the case of Reves v. Ernst & Young, which helps determine whether a note is considered a security.
In its analysis, the court examined several factors, including the motivations of the parties involved, the nature of the transaction, and the expectations of the investing public. Ultimately, the court found that while the motivations were mixed, the overall evidence suggested that the note was not intended as a security, particularly given its commercial nature and the protections in place for the lender.
Impact
This ruling has significant implications for future business transactions involving promissory notes. By clarifying that certain notes may not fall under the TSA's definition of a security, it allows for greater flexibility in how businesses structure their financing agreements. This decision may also influence how lenders and borrowers negotiate terms and conditions in future loan agreements.
The ruling could set a precedent for similar cases in Texas, where courts may look to this decision when determining the status of promissory notes and other financial instruments in business transactions. It emphasizes the importance of the context in which loans are made and the intentions of the parties involved.
What's Next
Details were not available in the court filing regarding whether the ruling can be appealed. However, it is common for parties in such disputes to seek further review if they believe the court's interpretation of the law is incorrect. There may also be related cases pending that could further clarify the legal landscape surrounding business loans and securities in Texas.