They signed LLC agreements saying no joint venture existed. Then they sued claiming one did
A Texas court told real estate investors: if your LLC agreements say no joint venture exists, you cannot claim otherwise.
The Business Court of Texas, Third Division, handed down the ruling on April 23, 2026. At the center of the dispute is the Reserve at Lake Travis, a mixed-use development in Travis County, Texas – and a falling out between two investors over how the whole thing was run.
Here is how it started. In early 2021, George Lake and Brett Jensen got together to discuss buying and managing the Reserve. They contemplated a structure where multiple LLCs would each own and operate different parts of the property. By May of that year, they had formed several entities, four of which sat at the heart of this dispute: Harbor Village – 2021, LLC, Hillside Cottages – 2021, LLC, Riverbend Club RE – 2021, LLC, and Riverbend Marina RE – 2021, LLC. Each one was governed by a written company agreement. Two entities co-managed the LLCs: Enosis Investments, owned by Lake, and Braverman Management, Inc., owned by Jensen. Enosis had the final say whenever the two managers could not agree. A third entity, Southfork Development Partners, LLC, tied to Jensen, held membership interests in the LLCs but did not manage any of them.
Things eventually soured. Lake and Enosis sued, arguing that Jensen, Braverman, and Southfork owed them fiduciary duties – the kind of heightened obligations that come with partnerships and joint ventures. They claimed the Reserve was essentially a joint venture, and that Jensen and Southfork owed duties to the LLCs through their positions of control.
Judge Melissa Andrews was not persuaded.
On the joint venture argument, the court pointed out that the plaintiffs never actually alleged that the parties agreed to share profits and losses – one of the fundamental requirements for a joint venture to exist under Texas law. The petition mentioned profiting from the Reserve, but said nothing about how those profits would be split, and did not mention losses at all. On top of that, every single one of the LLC agreements explicitly stated that no joint venture or partnership existed between the parties. Each agreement also included a clause saying it represented the entire deal between the parties and replaced anything that came before it. Lake signed every one of those agreements on behalf of Enosis. The court ruled that the parties simply cannot assert they orally agreed to the very thing their written contracts expressly disavowed.
On the question of whether Southfork owed fiduciary duties to the LLCs, the court said no. Southfork was a member, not a manager. Under Texas law, there is no general rule that says a non-managing member of a manager-managed LLC owes fiduciary duties to the company.
As for Jensen himself, the court noted that he was not a manager or member of any of the LLCs. The only connection was that he served as president and controlling shareholder of Braverman, which was a manager. The plaintiffs were essentially asking the court to treat Jensen and Braverman as one and the same – but they never made a case for piercing the corporate veil. Without that, the court held that Jensen was protected by the longstanding rule that corporate officers and shareholders are generally not on the hook for corporate obligations.
The court did confirm that Braverman, as a co-manager, owed fiduciary duties to the LLCs. That was never in dispute. It also left the door open for the plaintiffs' separate fraud claim against Jensen and a potential claim for knowingly participating in a breach of fiduciary duty, neither of which was addressed in this ruling.
The decision is not the final word on the case – the broader litigation is still ongoing. But the message for anyone putting together a multi-party real estate deal through LLCs is hard to miss: your operating agreements are not just paperwork. They define the relationship. If those documents say no joint venture exists, a court is going to hold you to that. And if you want someone to carry fiduciary duties, make sure the agreements actually say so.
