When a chemical plant in Port Neches, Texas, exploded on Thanksgiving eve in 2019, multiple people were injured, tens of thousands were evacuated from their homes and off-site property damage costs topped $150 million.

• But the plant's ultimate owners, private equity firms First Reserve and SK Capital Partners, will not be held liable, per a recent ruling by the Texas Supreme Court.

Why it matters: This was a failed attempt to pierce the corporate veil that private equity funds use to protect themselves from portfolio company misdeeds.

• Had it succeeded in Texas, the second-largest state for private equity investment, it could have opened the floodgates for future litigation.

What to know: The Port Neches facility was owned by TPC Group, which was taken private for $850 million in 2012 by First Reserve and SKCP.

• It mostly produced butadiene, a petrochemical used in the production of synthetic rubber.
• An investigation by federal authorities determined that the blast was caused by the buildup of a “popcorn polymer” inside of a pipe, and that TPC failed to identity what it should have known was a possible problem.
• TPC filed for Chapter 11 bankruptcy protection last summer, in a prepackaged deal that included money to compensate thousands of plaintiffs in lawsuits that had been consolidated into a state multidistrict case. Prior to the bankruptcy filing, TPC had already paid out $134.5 million to settle explosion-related claims.

Piercing the veil: Not all victims were satisfied with going after TPC. Some also wanted compensation from the company's private equity owners, who they believed had caused the company to cut safety corners in the pursuit of investment profits.

• Plaintiffs never really got to their substantive arguments, however, because the Texas Supreme Court effectively ruled that the PE firms' creation of limited liability structures gave them legal cover (absent of fraud, which wasn't alleged). By doing so at the pleadings stage, it likely sets precedent for future cases and make it less likely future lawsuits are attempted.
• Defense attorneys also successfully argued that neither First Reserve nor SK Capital Partners controlled the TPC board of directors from a mathematical perspective — First Reserve, for example, held two of five board seats —and thus no operational control.

The big picture: Private equity firms regularly tout their "value-added" operational skills when trying to raise funds or secure a deal, so it's fairly rich that First Reserve and SKCP successfully argued that they were little more than financiers.

• Moreover, it's not uncommon for a single fund to lack board control, if a buyout was done by multiple firms acting in concert.
• "I don't see an inconsistency," says Chris Popov, an attorney with Vinson & Elkins who represented the PE firms on this case. "It's one thing for an owner to market profitability or returns to raise a fund ... it's entirely different to suggest the owner is then personally liable for every debt of the underlying company ... I think the fundamental issue of limitation of liability in corporate law is what was at stake here."

The bottom line: Private equity firms spend lots of money on fund formation lawyers. This is why.

The European Commission has opened a full investigation into Amazon's (Nasdaq: AMZN) proposed $1.7 billion acquisition of iRobot (Nasdaq: IRBT), the Bedford, Mass.-based maker of Roomba vacuum cleaners.

Why it's the BFD: Amazon is among the world's most acquisitive tech giants, making multibillion-dollar purchases in everything from connected home to grocery to movie studios to health care clinics. This could be the first time it's stopped by antitrust regulators.

Backstory: Amazon agreed to buy iRobot last summer, and recently received the go-ahead from U.K. competition authorities. The U.S. Federal Trade Commission reportedly is reviewing the deal, and has come under some political pressure to open a formal investigation of its own.

The bottom line: The European Commission will make its ruling by Nov. 15, and says that it's concerned that the "transaction would allow Amazon to restrict competition in the market for robot vacuum cleaners and to strengthen its position as online marketplace provider."

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• Benchmark Space Systems, a Burlington, Vt.-based developer of in-space propulsion solutions, raised $33.2m in Series B funding from undisclosed investors. https://axios.link/3D4Lf7Y

• Steadily, a Beaverton, Ore.-based landlord insurance startup, raised $28.5m in Series B funding. Zigg Capital led, and was joined by Matrix Partners, Koch Real Estate Investments, Clocktower Technology Ventures and Nine Four Ventures. https://axios.link/3NCSmcU

🚑 Luminopia, a Cambridge, Mass.-based provider of digital therapeutics for neuro-visual disorders, raised $16m in Series A funding led by USVP. https://axios.link/4396sbH

⚡ Ex-Fusion, a Japan-based laser fusion developer, raised around $12.5m in seed funding. ANRI led, and was joined by Nissay Capital, Delight Ventures, Mitsui Sumitomo Insurance Capital, Nikon-SBI Innovation Fund, Osaka Shoko Shinkin Bank, Mitsubishi UFJ Capital, SMBC VC, Shizuoka Capital and Kyushin Social Capital. www.ex-fusion.com

• DataGalaxy, a French provider of data governance and catalog solutions, raised $10m in seed funding. AV8 Ventures led, and was joined by Orange Ventures and insiders NewFund and Evolem. www.datagalaxy.com

⚡ NEU Battery Materials, a Singaporean battery recycling startup, raised $3.7m in seed funding. SGInnovate led, and was joined by ComfortDelGro Ventures, Shift4Good and Paragon Ventures I. https://axios.link/3pAma1B

• ChipFlow, a British chip design platform, raised £1.2m in pre-seed funding. Fontinalis Partners led, and was joined by Fuel Ventures, InMotion Ventures and APX. https://axios.link/3PRjgAx

🚑 Tessa Therapeutics, a Singaporean developer of treatments for hematological malignancies and solid tumors, has shut down. The company had raised over $250m from Polaris Partners, Temasek, EDBI, Heliconia Capital and Heritas Capital. https://axios.link/3rmkklq

⚡ Addison Capital Partners acquired Communication Power Companies, a Hauppauge, N.Y.-based manufacturer of RF and microwave power amplifiers. www.cpcamps.com

⚡ Balcor Cos. acquired a stake in Kaizen Clean Energy, a Tomball, Texas-based developer of hydrogen-based distributed energy resources. www.kaizencleanenergy.com

🚑 Blackstone invested in Lazeo, a French provider of aesthetic medicine services. https://axios.link/3D6UGDO

• Blackstone, TPG and Thomas H. Lee Partners each are considering takeover bids for Standish Management, a Boston-based provider of outsourced private equity fund administration services, per Reuters. https://axios.link/3r9AluY

• KKR agreed to acquire a majority stakes in Peruvian fiber optic networks PangeaCo, Telefónica del Perú, and Entel — and then combine them into a new company called ON*NET Fibra de Perú. KKR also committed to invest another $200m in expanding the network. https://axios.link/3pB7FdW

🚑 Lindsay Goldberg acquired a majority stake in Lightwave Dental, a Woodbridge, Va.-based dental service organization, from Alpine Investors. www.lightwavedental.com

• PAI Partners agreed to acquire a majority stake in Infra Group, a Belgian network infrastructure services provider. Sellers ICG and Andera Partners will retain minority positions. www.infra-group.eu

• Birkenstock, the German sandal maker owned by L Catterton, is talking with banks about an IPO that could value the company at $6b, per Bloomberg. https://axios.link/44vr3ba

🚑 ClinChoice, a Chinese contract research organization, is talking with banks about a 2024 IPO in Hong Kong, per Bloomberg. The company has raised over $200m from such investors as Goldman Sachs, Legend Capital, DFJ, Lilly Asia Ventures and Taikang Life Insurance. https://axios.link/3PLVeqw

• Anglian Water and Northumbrian Water are considering a sale of their Wave joint venture, which provides water and wastewater services to more than 300k British businesses, per Sky News. Anglian backers include Dalmore Capital and GLIL Infrastructure, while Northumbrian backers include KKR and CK Infrastructure Holdings. https://axios.link/3D2DXBJ

• DigitalOcean (NYSE: DOCN) will pay $111m in cash to acquire Paperspace, a Brooklyn-based cloud computing and machine learning development platform that raised $13m from Battery Ventures, SineWave Ventures, Intel Capital and Sorenson Ventures and Initialized Capital. https://axios.link/3XHm84x

• ADQ and Bank of Montreal agreed to acquire minority equity stakes in Sagard, a Canadian alt asset manager controlled by Power Corporation of Canada. As part of the deal, Great-West Lifeco will increase its existing minority position. https://axios.link/43jNG18

🚑 Bausch + Lomb (TSX: BLCO) acquired Blink, an eye and contact lens drop brand, from Johnson & Johnson (NYSE: JNJ) for $106.5m. https://axios.link/43eFejC

• BuzzFeed (Nasdaq: BZFD) is looking to secured bids of up to $150m for its sale of Complex, per The Information. https://axios.link/3NXWOUN

• Cronos Group (TSX: CRON), a Canadian cannabis producer backed by Marlboro maker Altria Group (41% stake), confirmed that it’s in sale talks. https://axios.link/3Ody4bv

• Generali (Milan: G), Italy’s largest insurer, agreed to buy global investment manager Conning Holdings from Cathay Life. https://axios.link/3D47qLE

• Marsh McLennan Agency acquired Integrity HR, a Louisville, Ky.-based HR consultancy. www.marshmma.com

🚑 Roivant Sciences (Nasdaq: ROIVW) is receiving strategic takeover interest for its IBS treatment, which could fetch more than $7b and potentially put all of Roivant in play, per Bloomberg. https://axios.link/3D3pc1r

• Hellman & Friedman has secured more than $20b in capital commitments for its 11thflagship buyout fund, per an SEC filing.

• Public Ventures, a Toronto-based firm that will invest in life science and clean tech startups that focus on underserved communities, is targeting $100m for its debut fund. https://axios.link/44e8NDw

• Colin Bryant joined Coatue Management as a general partner and COO for private investments. He previously was with NEA. Coatue also hired Nicholas Mouradian (ex-Ares) as a partner focused on structured equity. www.coatue.com

• Britt Harris, who recently stepped down as president and CEO of UTIMCO, agreed to become acting CEO of the $56.7b Texas Permanent School Fund. https://axios.link/3rjMQV3

The U.S. economy added 209k jobs in May, below economist estimates, with the unemployment rate falling to 3.6%. Average hourly earnings rose 0.4%. Go deeper.