PJC Business 2024

F RAUD AND N EGLIGENT M ISREPRESENTATION

PJC 105.25

Relative. The term “relative” in the definition of “insider” is defined in section 24.002(11). If no relatives participated in the relevant transactions, the portions of the definition of insider that refer to “relative” should not be submitted. If there is no fac tual dispute that a relative did participate in a relevant transaction, the court may instruct the jury that the relative is an insider. Affiliate. The term “affiliate” in the definition of “insider” is defined in section 24.002(1). If no affiliates participated in the relevant transactions, the portions of the definition of insider that refer to “affiliate” should not be submitted. If there is no fac tual dispute that an affiliate did participate in a relevant transaction, the court may instruct the jury that the affiliate is an insider. If there is a factual dispute regarding whether a particular entity is an affiliate, the relevant parts of the following definition should be submitted: “Affiliate” means a person or entity— 1. who directly or indirectly owns, controls, or holds with power to vote 20 percent or more of the outstanding voting securities of Debtor, Inc. , other than a person or entity who holds the securities— a. as a fiduciary or agent without sole discretionary power to vote the securities or b. solely to secure a debt, if the person or entity has not exercised the power to vote; 2. whose business is operated by Dean Debtor under a lease or other agreement, or a person or entity substantially all of whose assets are con trolled by Dean Debtor ; or 3. who operates Dean Debtor ’s business under a lease or other agree ment or controls substantially all of Dean Debtor ’s assets. [If the alleged affiliate is a corporation, the following additional definition may be included.] “Affiliate” also means a corporation 20 percent or more of whose outstand ing voting securities are directly or indirectly owned, controlled, or held with power to vote by Dean Debtor . Insolvent. PJC 105.25 assumes insolvency is undisputed. If insolvency is undis puted, the court may instruct the jury regarding the fact and date of insolvency. If insolvency is disputed, the following instruction (which is derived from section 24.003) should be submitted: A debtor is “insolvent” if the sum of the debtor’s debts is greater than all of the debtor’s assets at a fair valuation. A debtor who is gen-

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