A Travis County jury heard two weeks of trial before unanimously finding a brother breached his fiduciary duty when he attempted to expel his sibling from a business they cofounded.
The jury awarded actual and exemplary damages totaling $116 million against Bob Gregory.
Texas Disposal Systems CEO Bob Gregory and his brother Jimmy Gregory cofounded the company in 1977 with split ownership. Bob eventually convinced Jimmy to become a minority owner in 1984.
According to court records, in 2019, Bob cut off Jimmy’s access to financial information about TDS, claiming he failed to protect confidential information in the process of estate planning. Jimmy then informed his brother he was interested in selling his shares of the company because he wanted to retire.
According to the complaint filed in 2023, using outdated information, Jimmy believed his shares were worth around $60 to $72 million. Bob has rarely talked with his brother since they discussed what he thought his shares were worth.
Bob held a TDS board meeting in 2022 and voted for Jimmy to be removed from his positions at the company.
“Jimmy Gregory feels completely vindicated by the verdict and proud that he brought this case to protect the companies that he and his brother spent decades building together,” Sara Clark of Scott Douglass McConnico told The Texas Lawbook.
She added that the defense put on evidence for the jury that Jimmy and his two children had taken inappropriate actions at the company.
“But at the end of the day, the judge granted a directed verdict or did not include a question for the jury on any of those claims,” Clark said.
The fiduciary breach verdict was based on claims that Bob Gregory used entities he wholly owns — Okapi Leasing, LLC, Okapi Environmental Services, LLC, and Txalloy/Acme Iron and Metal — to the financial detriment of the TDS Companies.
On May 1, the jury awarded TDS actual damages exceeding $91 million resulting from Bob Gregory’s breaches of fiduciary duties to the company. After finding Bob Gregory acted with “a specific intent to cause substantial injury to the TDS Companies,” the jury returned an additional verdict for exemplary damages against him of $23 million.
The jury also found that Bob Gregory breached a contract with Jimmy Gregory related to TDS shareholder distributions and salaries, with damages totaling $1.4 million.
Karen C. Burgess and Katie Dolan-Galaviz of Burgess Law, Robert Dubose of Alexander Dubose Jefferson, and Robin Harrison of Hicks Thomas represented Bob. They did not immediately respond to a request for comment.
Casey Dobson, Abe Kuczaj, Robyn Hargrove, Diana Kensy, and Kennon Wooten of Scott Douglass & McConnico, Jonathan Pauerstein and Cassidy Daniels of Rosenthal Pauerstein Sandoloski Agather, and Richard Gray and John Jacks of Gray Becker also represented James Gregory.
The case number is D-1-GN-23-001946.