WP Liquidating, Ltd. v. Fenoglio, 11-25-00131-CV, July 23, 2026.
On appeal from 43rd District Court, Parker County, Texas
Synopsis
A Texas limited partner who seeks partnership books and records to evaluate asset management and accounting asserts a proper purpose under Texas Business Organizations Code section 153.552. The Eleventh Court held that the partnership could not block inspection based on speculation about collateral litigation, an allegation that the partner’s interest may have been transferred in a prior divorce, or the partner’s refusal to sign a unilateral confidentiality agreement not required by the partnership agreement.
Relevance to Family Law
This is a business-entity case, but it has obvious force in Texas family law where community estates often include limited partnership, LLC, or closely held entity interests. In divorce, post-divorce enforcement, and fiduciary-duty disputes, lawyers frequently need books-and-records access to determine whether distributions were manipulated, assets were diverted, revenues were misallocated, or entity value was impaired before or after separation. WP Liquidating is useful authority for the proposition that a record request tied to valuation, tracing, accounting, or management review is a proper purpose, and that an entity cannot neutralize that right through conjecture about parallel litigation or by imposing extra-contractual access conditions.
For family lawyers, the opinion matters most when one spouse or former spouse claims an ownership interest in a partnership, disputes whether that interest was transferred in the divorce, or needs entity records to value and characterize the estate. The case also has implications in receivership-adjacent disputes, turnover disputes, and post-judgment discovery where one side tries to limit inspection by invoking privacy, proprietary concerns, or broad managerial discretion. The court’s reasoning supports a disciplined separation between the existence of an inspection right and later disputes over how information may be used.
Case Summary
Fact Summary
WP Liquidating, Ltd. was a limited partnership governed by an amended and restated partnership agreement. Anthony Fenoglio was a limited partner. Section 7.1(a) of the agreement provided that the partnership’s books and records would be kept at the partnership’s expense and “shall be available for inspection by any Partner,” while also requiring the general partner to maintain the records required by Texas Business Organizations Code section 153.551.
Fenoglio began asking for access to records after receiving financial information that, in his view, raised substantial accounting and management concerns. He saw a balance sheet showing that Robert Thompson had received distributions of more than $7 million while Fenoglio had received roughly $2.4 million, despite Fenoglio’s larger capital position. He also received a shareholder analysis that appeared inconsistent with the balance sheet and did not explain the disparity. A later liquidity event involving stock held by the partnership produced additional concern because Fenoglio received funds he believed were related to the transaction but had not received an accounting explaining it.
Fenoglio made multiple written requests to inspect the partnership’s books and records for the purpose of determining whether partnership assets had been properly managed and whether revenues and expenses had been properly accounted for and allocated. The partnership did not grant inspection. Instead, it gave several reasons for refusal: it questioned whether Fenoglio’s partnership interest had been transferred to his former wife in a divorce finalized years earlier; it asserted the records contained proprietary and financial information concerning other partners; it proposed a confidentiality agreement designating all requested material as confidential and restricting use to the stated purpose; and it expressed concern that the request might be connected to other litigation.
Fenoglio refused to sign the proposed confidentiality agreement and sued to enforce both his contractual inspection right under the partnership agreement and his statutory right under the Business Organizations Code. The trial court granted summary judgment in his favor and later entered a final judgment including attorney’s fees and costs against the partnership and its general partner. The Eleventh Court of Appeals affirmed.
Issues Decided
- Whether a limited partner’s stated desire to determine whether partnership assets were properly managed and whether revenues and expenses were properly accounted for and allocated constitutes a proper purpose under Texas Business Organizations Code section 153.552.
- Whether alleged collateral litigation created a fact issue on improper purpose sufficient to defeat summary judgment.
- Whether the partnership could condition inspection on execution of a unilateral confidentiality agreement not required by the partnership agreement.
- Whether a general-prudence provision in the partnership agreement authorized the general partner to restrict or qualify an express inspection right.
- Whether the trial court improperly considered new summary-judgment grounds raised in a reply brief.
- Whether the fee award and costs should be affirmed.
Rules Applied
The court applied both the governing partnership agreement and the Texas Business Organizations Code provisions addressing partnership records and inspection rights.
- Texas Business Organizations Code sections 153.551-.552: These provisions require certain partnership records to be maintained and permit a limited partner to inspect and copy information regarding the partnership’s business, financial condition, and other statutorily identified matters for a proper purpose.
- Partnership Agreement, section 7.1: The agreement expressly provided that the books and records “shall be available for inspection by any Partner.”
- Partnership Agreement, section 6.2: The general partner relied on a general clause requiring it to perform its duties with ordinary prudence and in a manner characteristic of a businessman in similar circumstances.
- Summary judgment standards: The court reviewed the ruling de novo and considered whether the movant established entitlement to judgment as a matter of law and whether the nonmovants raised a genuine issue of material fact.
- Contract-construction principles: The court treated the agreement as a whole and declined to read a general managerial-prudence clause as overriding a specific, express inspection right.
Application
The court’s analysis was straightforward and important. It started with the nature of Fenoglio’s stated purpose. He sought records to determine whether partnership assets had been properly managed and whether revenues and expenses had been properly accounted for and allocated. The court treated that purpose as paradigmatically proper under section 153.552 because it goes directly to a limited partner’s economic and governance interests. This was not a request untethered from the partner’s rights; it was a request aimed at understanding management, distributions, accounting, and allocation.
The partnership attempted to create a fact issue by pointing to surrounding disputes, including litigation involving Fenoglio and questions about whether his ex-wife had received his interest in a 2013 divorce. But the court would not let conjecture about collateral disputes displace the statutory standard. The possibility that requested records might become useful in other litigation did not negate an otherwise proper inspection purpose. Nor did the unresolved assertion about a prior transfer defeat his standing as a limited partner on this record.
The court also rejected the effort to convert a general operational clause into a substantive limitation on inspection. Section 6.2 required the general partner to act with ordinary prudence, but section 7.1 expressly made the books and records available for inspection by any partner. Reading the agreement as a whole, the court refused to allow the general partner’s broad prudence language to override the specific inspection language. That is a useful drafting-and-litigation lesson: a general management provision does not silently amend an express access right.
The proposed confidentiality agreement failed for a related reason. The court did not hold that confidentiality protections are categorically impermissible. Instead, it held that this partnership could not deny inspection by conditioning access on a unilateral agreement that the partnership agreement itself did not require. In other words, the entity could not add a new contractual gatekeeping mechanism after the fact and then use the requesting partner’s refusal to sign as the basis for denying inspection.
Finally, the appellants argued that Fenoglio had introduced new summary-judgment grounds in his reply. The appellate court noted that the trial court expressly stated it would not consider any new grounds raised in the reply, which undercut the complaint.
Holding
The Eleventh Court held that Fenoglio established a proper purpose under Texas Business Organizations Code section 153.552 by seeking access to books and records to determine whether partnership assets had been properly managed and whether revenues and expenses had been properly accounted for and allocated. That purpose fell squarely within the statute’s protection.
The court further held that the partnership could not defeat that inspection right through speculation that the records might be used in collateral litigation or through an unresolved allegation that the limited partner’s interest had been transferred in an earlier divorce. Those assertions did not create a material fact issue sufficient to block summary judgment on the inspection claim.
The court also held that the partnership agreement’s general-prudence provision did not override the agreement’s express inspection provision. The general partner therefore could not condition inspection on execution of a unilateral confidentiality agreement not required by the partnership agreement and then deny access when the partner declined to sign it.
The court affirmed the trial court’s judgment, including the relief enforcing inspection and the award of attorney’s fees and costs against the partnership and general partner.
Practical Application
For Texas family-law litigators, this case is most valuable when the marital estate includes a closely held limited partnership and one side needs entity records for valuation, reimbursement, fraud-on-the-community, tracing, or post-divorce enforcement. If your client is the record owner of a partnership interest, frame the request in governance-and-accounting terms: management of assets, accounting for revenues and expenses, allocation of distributions, and explanation of liquidity events. That framing tracks the statutory “proper purpose” recognized in WP Liquidating.
The opinion is also useful where the opposing side argues that inspection should be denied because the requesting spouse may use the information in the divorce itself, in a related fiduciary-duty claim, or in later enforcement proceedings. The court’s reasoning strongly suggests that overlap with other litigation does not destroy a proper purpose if the request independently fits the statute and the governing agreement.
In drafting temporary orders, Rule 11 agreements, or entity-information protocols, family lawyers should pay close attention to whether a confidentiality restriction is grounded in an actual contract, statute, or court order. This opinion does not eliminate confidentiality protections, but it cautions against using unilateral proposed restrictions as a precondition to access where the underlying instrument grants an express inspection right without that condition.
The case also gives practitioners a useful contract-interpretation argument. In entity disputes embedded in divorce litigation, the managing spouse or affiliated manager will often cite broad authority clauses, fiduciary clauses, or prudence clauses to justify withholding records. WP Liquidating is a clean reminder that specific access provisions ordinarily control over broad managerial language.
Checklists
Framing an Inspection Demand in a Family Law Case
- Identify the client’s status as the record owner, assignee, member, partner, or beneficiary of the entity interest.
- Quote the governing instrument’s inspection language verbatim.
- Cite the relevant statutory records-inspection provisions in addition to the contract.
- State a proper purpose tied to valuation, accounting, management review, distribution analysis, or asset tracing.
- Connect the request to specific events such as unusual distributions, redemptions, recapitalizations, liquidity events, loans, or intercompany transfers.
- Request a defined set of books and records rather than a vague catch-all production.
- Set a reasonable deadline and request dates for in-person inspection or electronic production.
Responding When the Other Side Invokes the Divorce or Related Litigation
- Separate the inspection purpose from the existence of parallel litigation.
- Emphasize that valuation, accounting, and management review remain proper purposes even if the records may later be used elsewhere.
- Require the resisting party to identify the legal basis for withholding access.
- Test whether the alleged transfer of the interest is established by actual operative documents or merely asserted.
- Preserve a record showing that the request stands on contractual and statutory rights independent of the collateral case.
Evaluating Proposed Confidentiality Restrictions
- Compare the proposed confidentiality agreement to the governing partnership or LLC agreement.
- Determine whether the instrument expressly authorizes confidentiality conditions on inspection.
- Distinguish between a mutually negotiated protective order and a unilateral precondition to access.
- Narrow overbroad terms that label all requested material confidential without differentiation.
- Avoid use restrictions that impair valuation, expert review, or use in the family case absent court order.
- If confidentiality is appropriate, seek a court-entered protective order with defined scope, use, and disclosure provisions.
Litigating Summary Judgment on Inspection Rights
- Attach the governing agreement and the relevant statutory provisions.
- Present competent evidence establishing ownership status and the written demand.
- Use affidavit testimony to explain the management/accounting concerns prompting the request.
- Show the precise reasons given for denial, including any confidentiality demand or standing challenge.
- Argue that broad managerial-prudence language does not override an express inspection clause.
- Challenge speculative defenses that do not negate proper purpose as a matter of law.
- Preserve objections if the opposing party tries to inject new theories through reply briefing or unsupported declarations.
Avoiding the Non-Prevailing Party’s Problems
- Do not rely on a general management clause to curtail a specific inspection provision.
- Do not assume that parallel divorce or fiduciary litigation will itself negate proper purpose.
- Do not impose a unilateral confidentiality agreement unless the contract or a court order authorizes that condition.
- Do not leave standing challenges at the level of suspicion; support them with operative documents and admissible evidence.
- Do not ignore the fee-shifting risk that follows wrongful denial of a statutory inspection right.
Family Law Crossover
The procedural rule established by this decision is that a statutory and contractual inspection claim can be resolved on summary judgment when the requesting owner proves status, written demand, and a proper purpose tied to management and accounting, and the resisting entity offers only speculative reasons for refusal or relies on conditions not found in the governing instrument. In a Texas family law matter, that mechanism can arise when a spouse, former spouse, or estate representative seeks books and records from a partnership held in the marital estate to value the interest, analyze distributions, trace separate and community components, or test post-separation management. The crossover point is procedural: the family case may generate the need for entity information, but the right to obtain that information still turns on the contract and the Business Organizations Code, and those issues may be resolved as a discrete legal question rather than deferred until final trial.
Citation
WP Liquidating, Ltd. v. Fenoglio, No. 11-25-00131-CV, ___ S.W.3d ___, 2026 WL ___ (Tex. App.—Eastland July 23, 2026, no pet. h.).
Full Opinion
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