Cadence Bank v. Bridgelink: The Nerve-Center Test for Multi‑Headquartered Banks and Strict Construction of Guarantor Release Clauses

I. Introduction

The Fifth Circuit’s decision in Cadence Bank v. Bridgelink (Nos. 24‑10812 & 25‑11078, filed Nov. 24, 2025) addresses two core issues that often arise in complex commercial litigation:

• Whether a federal court had diversity jurisdiction where a bank claimed its principal place of business was in Mississippi, despite significant executive presence and branding in Texas; and
• Whether individual guarantors were released from multimillion‑dollar personal guaranties under an early‑release clause tied to the borrower’s covenant compliance.

On the jurisdictional front, the case is an important application—and clarification—of the Supreme Court’s “nerve center” test from Hertz Corp. v. Friend, 559 U.S. 77 (2010), in the specific context of a bank that maintains both:

• a “corporate headquarters” in one state (Houston, Texas), and
• a “bank headquarters” in another (Tupelo, Mississippi).

Substantively, the decision is a pointed reminder that:

• guarantor release provisions are construed strictly according to their conditions,
• a borrower’s default persists absent actual satisfaction of express waiver conditions, and
• mere acknowledgement of receipt of compliance materials is not the same as confirmation that contractual conditions have been satisfied.

The plaintiffs–appellees are Cadence Bank and Century Bank (collectively, “the Banks”). The individual defendants–appellants are Cole Wayne Johnson and Cord Henry Johnson (the “Johnsons”), Texas‑based managers of Bridgelink Engineering LLC (“Bridgelink”) and related LLC guarantors (the “Bighorn” entities). The Banks sued Bridgelink, the Johnsons, and the Bighorn LLCs for breach of contract after defaults on $34 million in loans. Only the Johnsons appealed.

The opinion—authored by Judge Stuart Kyle Duncan and joined by Judges Smith and Graves—(1) upholds the district court’s finding of complete diversity, and (2) affirms summary judgment holding the Johnsons liable under their personal guaranties. In doing so, the Fifth Circuit clarifies how courts should locate the “nerve center” of a multi‑headquartered financial institution and how strictly courts will enforce the express conditions of an early‑release guaranty clause.

II. Factual and Procedural Background

A. The Loan and Guaranty Structure

In August 2021, Bridgelink Engineering LLC, managed by the Johnsons, entered into a credit agreement with the Banks:

• Cadence Bank extended a $20 million loan; and
• Century Bank extended a $14 million loan.

Bridgelink agreed to:

• repay principal and interest, and
• comply with specified financial covenants and prepayment terms.

Initially, three LLCs managed by the Johnsons—Bighorn Construction and Reclamation LLC, Bighorn Sand & Gravel LLC, and Bighorn Investments and Properties LLC—guaranteed Bridgelink’s obligations. Shortly thereafter, the Johnsons executed a personal guaranty, under which they individually guaranteed Bridgelink’s obligations.

Crucially, the personal guaranty contained an “early‑release” clause (Section 9.3) permitting the Johnsons’ release from their guaranty obligations if three conditions were satisfied:

1. No default. Bridgelink’s loan had to be “in good standing”—i.e., not in default under the credit agreement.
2. Financial covenant compliance. Bridgelink had to provide evidence that it complied with certain financial covenants for two consecutive quarters.
3. Prepayment compliance confirmation. For those same two consecutive quarters, the Banks had to confirm Bridgelink’s compliance with any applicable prepayment requirements under Section 2.7(b)(ii).

In practice, Bridgelink was required to send “compliance packages” by email after each quarter, after which the Banks’ personnel would:

• acknowledge receipt,
• review the materials, and
• formally confirm compliance (if appropriate).

B. Quarterly Compliance and Default

Q1 2022. Bridgelink submitted its Q1 2022 compliance materials in May 2022. About a month later, the Banks confirmed that Bridgelink had complied with its covenants for that quarter. However, by July 2022 Bridgelink had defaulted—specifically by failing to make required interest payments, an “event of default” under Section 8.1(b) of the credit agreement.

To address the default, the parties amended the credit agreement. The amendment:

• conditionally waived the existing events of default, and
• required, among other things:
  • payment of a $170,000 “waiver fee” by Bridgelink, and
  • the Johnsons’ agreement that Q1 2022 would not count as a compliant quarter toward satisfying the early‑release clause.

The Banks asserted—and Bridgelink did not contest—that the $170,000 waiver fee was never paid. That meant the default was never effectively waived.

Q2 2022. After the amendment, Bridgelink submitted its Q2 2022 compliance documents. The Banks acknowledged receipt and stated they would review them. Although no documentary evidence of a written confirmation of compliance was produced, the Banks conceded at the summary‑judgment hearing that Bridgelink was in compliance with the relevant covenants and prepayment provisions for Q2.

Q3 2022. Bridgelink again sent its compliance package, and the Banks acknowledged receipt. But at summary judgment, the Banks disputed Bridgelink’s compliance for Q3. Crucially, neither side produced an email or other writing in which the Banks expressly confirmed Q3 compliance.

Q4 2022 and Q1 2023. By Q4 2022, Bridgelink was again (or still) in default, and it remained in default in Q1 2023. Neither Bridgelink nor any of the guarantors (including the Johnsons and the Bighorn LLCs) made payments on the loans.

C. The District Court Litigation

The Banks sued Bridgelink, the Johnsons, and the Bighorn LLCs in the Northern District of Texas, asserting exclusively state‑law breach‑of‑contract claims. The district court exercised jurisdiction based on diversity of citizenship under 28 U.S.C. § 1332(a).

After approximately ten months, the Banks moved for summary judgment. The Johnsons did not dispute:

• the existence of valid contracts (the credit agreement and guaranties),
• their failure to pay when due, or
• that the Banks suffered damages.

Instead, the Johnsons argued that they had been released from their guaranty obligations pursuant to the early‑release clause before Bridgelink’s December 2022 default. They relied primarily on email exchanges, contending these showed:

• Banks’ confirmation of covenant and prepayment compliance for Q1, Q2, and Q3 2022; and therefore
• satisfaction of the two‑consecutive‑quarter requirement.

The district court granted summary judgment, holding that:

• the Johnsons had not met the early‑release conditions, particularly given the continuing default and the lack of two consecutive quarters of confirmed compliance; and
• the Banks were entitled to judgment as a matter of law on their breach‑of‑contract claims.

Only the Johnsons appealed.

D. The Late-Raised Jurisdictional Challenge and Limited Remand

After briefing the appeal, the Johnsons moved in the district court to dismiss for lack of subject‑matter jurisdiction, claiming that Cadence Bank was a citizen of both Texas and Mississippi when the complaint was filed. If correct, this would destroy complete diversity because the Johnsons themselves are Texas citizens.

The district court, constrained by the pending appeal, followed Federal Rule of Civil Procedure 62.1(a) and In re Fort Worth Chamber of Commerce, 100 F.4th 528 (5th Cir. 2024), and issued an indicative ruling, deferring a final decision until the Fifth Circuit acted.

The Fifth Circuit then:

• heard argument in April 2025,
• remanded for the “limited purpose” of determining subject‑matter jurisdiction, Cadence Bank v. Johnson, 2025 WL 2576237 (5th Cir. May 19, 2025), and
• received a detailed jurisdictional ruling from the district court on September 8, 2025, holding that complete diversity existed and denying the motion to dismiss. Cadence Bank v. Bridgelink Eng’g LLC, 2025 WL 2699044 (N.D. Tex. Sept. 8, 2025).

The case then returned to the Fifth Circuit, which addressed both jurisdiction and the merits of the summary judgment.

III. Summary of the Fifth Circuit’s Opinion

The Fifth Circuit made two principal holdings:

1. Subject-Matter Jurisdiction. The court held that complete diversity exists because:
   • Cadence Bank is a citizen of Mississippi (state of incorporation and principal place of business in Tupelo) and not of Texas;
   • Century Bank is a citizen of New Mexico; and
   • the Johnsons and the Bighorn LLCs are citizens of Texas (through their individual domicile and through LLC‑member tracing).
   The court rejected the Johnsons’ judicial estoppel argument and concluded that Cadence’s “nerve center” is in Tupelo, Mississippi, not Houston, Texas.
2. Summary Judgment / Guarantor Liability. Applying Texas contract law, the court affirmed summary judgment for the Banks. It held:
   • Bridgelink’s loan was in default from at least Q1 2022 and the conditions for waiving that default (including the $170,000 waiver fee) were never satisfied;
   • Q1 2022 could not count as a compliant quarter toward the release clause due to the amendment;
   • although Q2 2022 was deemed compliant (by the Banks’ concession), there was no evidence the Banks ever confirmed compliance for Q3 2022; and
   • an email acknowledging receipt of compliance documents is not equivalent to a confirmation of contractual compliance.
   Therefore, the Johnsons failed to show they satisfied the early‑release conditions before default and remained liable on their guaranties.

IV. Detailed Analysis

A. Subject-Matter Jurisdiction and Corporate Citizenship

1. Governing Framework and Precedents

The threshold issue was whether the federal courts had diversity jurisdiction. The governing standards are well established:

• 28 U.S.C. § 1332(a) authorizes federal jurisdiction over civil actions where:
  • the amount in controversy exceeds $75,000, and
  • the action is “between citizens of different States.”
• Complete diversity requires that “the citizenship of each plaintiff” is “diverse from the citizenship of each defendant.” Caterpillar Inc. v. Lewis, 519 U.S. 61, 68 (1996).
• Diversity is determined by “the state of facts that existed at the time of filing.” Grupo Dataflux v. Atlas Glob. Grp., 541 U.S. 567, 571 (2004).
• Federal courts must assure themselves of jurisdiction at every stage: “An appellate federal court must satisfy itself not only of its own jurisdiction, but also of that of the [district] court[] in a cause under review.” Mitchell v. Maurer, 293 U.S. 237, 244 (1934).

Three categories of entities were involved, each with its own citizenship rule:

• Individuals. Citizenship equals domicile: “For individuals, ‘citizenship has the same meaning as domicile,’ and ‘the place of residence is prima facie the domicile.’” MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310, 313 (5th Cir. 2019) (quoting Stine v. Moore, 213 F.2d 446, 448 (5th Cir. 1954)).
• LLCs. An LLC’s citizenship is that of all its members. Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077, 1080 (5th Cir. 2008).
• Corporations. Under § 1332(c)(1), a corporation is a citizen of both:
  • the state of incorporation, and
  • its “principal place of business.”

The meaning of “principal place of business” is governed by the Supreme Court’s “nerve center” test in Hertz Corp. v. Friend, 559 U.S. 77 (2010). Hertz held:

• A corporation’s principal place of business is:
  • “the place where a corporation’s officers direct, control, and coordinate the corporation’s activities” (the “nerve center”),
  • usually the corporate headquarters, provided it is the actual center of direction, control, and coordination.

2. Citizenship of the Defendants: Individuals and LLCs

The Fifth Circuit first disposed of the simpler citizenship questions:

• The Johnsons admitted they “are citizens of Texas,” a finding the court accepted. Cadence Bank, 2025 WL 2699044, at *5.
• The Bighorn LLCs required a more intricate tracing of ownership:
  • Bighorn Sand & Gravel LLC’s sole member is Bighorn Construction and Reclamation LLC;
  • Bighorn Construction’s sole member is Bridgelink Engineering LLC;
  • Bridgelink Engineering’s sole member is Bridgelink Power Operating LLC;
  • Bridgelink Power Operating’s sole member is Bridgelink Power, LLC;
  • Bridgelink Power’s sole member is Bridgelink Power Holdings, LLC; and
  • Bridgelink Power Holdings, in turn, has only two members—the Johnsons.

Applying Harvey, each LLC inherits the citizenship of its members. Because the ownership chain ultimately ends with the Johnsons, all of the relevant LLCs are citizens of Texas. This is a textbook illustration of how deeply courts must sometimes trace LLC ownership to determine citizenship.

3. Citizenship of Century Bank

Century Bank submitted evidence that it is:

• a New Mexico state‑chartered bank, and
• maintains its principal place of business in Santa Fe, New Mexico.

The Johnsons did not seriously contest this, and the Fifth Circuit, like the district court, treated Century as a New Mexico citizen.

4. The Dispute over Cadence Bank’s Principal Place of Business

The crux of the jurisdictional fight was Cadence Bank’s principal place of business.

It was undisputed that Cadence is incorporated in Mississippi. The question was whether its “nerve center” was in:

• Tupelo, Mississippi (Cadence’s position), or
• Houston, Texas (the Johnsons’ position).

The Johnsons argued:

• Cadence’s executive officers reside and make decisions in Houston;
• Cadence’s SEC filings and other public‑facing materials suggest that its “corporate headquarters” is in Houston; and
• Cadence should be judicially estopped from claiming its principal place of business is Tupelo because, in prior litigation, it allegedly represented Houston as its headquarters to establish diversity jurisdiction.

Cadence responded that:

• its “principal place of business is, and always has been,” Tupelo, Mississippi;
• it maintains a corporate headquarters in Houston but its bank headquarters is in Tupelo; and
• the bulk of operational decision‑making—board meetings, management committee meetings, and executive functions—occur in Tupelo, satisfying Hertz’s nerve‑center test.

5. Judicial Estoppel Argument and the Reed Test

The Johnsons also invoked judicial estoppel, attempting to preclude Cadence from arguing that its principal place of business is in Tupelo.

Judicial estoppel, as defined in Reed v. City of Arlington, 650 F.3d 571, 574 (5th Cir. 2011) (en banc), requires:

1. the party has asserted a legal position “plainly inconsistent” with a prior position;
2. a court accepted the prior position; and
3. the party did not act inadvertently.

The Fifth Circuit noted some uncertainty in the circuit about whether judicial estoppel even applies to issues of subject‑matter jurisdiction, citing Haverkamp v. Linthicum, 6 F.4th 662, 671 n.8 (5th Cir. 2021) (collecting cases). Rather than resolving that question, the court assumed arguendo that judicial estoppel could apply, and then held that the Johnsons failed the first prong of Reed.

The district court had identified two prior pleadings cited by the Johnsons:

• One stating that Cadence’s “principal place of business” is in Tupelo and its “corporate headquarters” is in Houston; and
• Another stating that its “principal corporate office is in Houston, Harris County, Texas.”

The Fifth Circuit agreed that these statements are not inconsistent with Cadence’s current position that:

• its corporate headquarters (or principal corporate office) is in Houston; but
• its nerve center—where the Bank’s key decisions are directed and coordinated—is in Tupelo.

Because there was no “plainly inconsistent” prior position, judicial estoppel did not apply. This portion of the opinion underscores that:

• courts differentiate between marketing or descriptive terms like “corporate headquarters” and the technical jurisdictional concept of a “principal place of business”; and
• minor differences in wording do not necessarily amount to the kind of clear inconsistency needed for judicial estoppel.

6. Applying Hertz: Locating Cadence’s “Nerve Center”

Turning to the Hertz analysis, the Fifth Circuit agreed with the district court that Cadence genuinely operates with two headquarters—Houston and Tupelo—but that only one can be the principal place of business for § 1332 purposes. The court then examined the evidence.

Executive Officers. The court emphasized the physical location of Cadence’s key executives:

• The Chief Executive Officer (CEO)—“the most important officer”—has his primary office in Mississippi.
• Of the 22 corporate officers who “direct, control, and coordinate Cadence Bank’s activities,” the primary offices were:
  • 8 in Mississippi,
  • 6 in Texas, and
  • the remainder in other locations.

The court concluded that “a majority of Cadence Bank’s executive officers” office outside Texas, with a notable concentration in Mississippi. This factor favored a Mississippi nerve center.

Board and Management Committee. The court then focused on the role of the Board of Directors and the Management Committee:

• The Management Committee, composed of certain “named executive officers” (NEOs) selected by the Board, is responsible for “setting important policies and making key decisions.”
• Cadence’s uncontroverted evidence showed that:
  • a majority of the NEOs have primary offices in Tupelo,
  • a majority of the Management Committee attends weekly meetings in person in Tupelo, and
  • the Board of Directors holds its meetings in Tupelo, where a majority of directors attend in person.

These facts strongly tied the bank’s central decision‑making and policy‑setting functions to Tupelo, not Houston.

SEC filings and public descriptions. While the Johnsons relied on SEC filings and other public materials that described Houston as Cadence’s corporate headquarters, the Fifth Circuit treated such materials as only one piece of the puzzle. Under Hertz, what matters is not the label “headquarters” but the actual locus of direction, control, and coordination.

On balance, the court held that:

• Cadence’s principal place of business—the nerve center—is Tupelo, Mississippi; and
• Cadence is therefore a citizen of Mississippi (state of incorporation + principal place of business).

7. Result: Complete Diversity Confirmed

Putting all the citizenship pieces together:

• Cadence Bank: Mississippi citizen (Mississippi incorporation + principal place of business in Tupelo);
• Century Bank: New Mexico citizen (state charter and principal place of business in Santa Fe);
• Johnsons: Texas citizens (individual domicile);
• Bighorn LLCs and Bridgelink: Texas citizens (through ownership tracing to the Johnsons).

No plaintiff shared citizenship with any defendant. The Fifth Circuit therefore held that complete diversity existed and that the district court properly exercised jurisdiction. The Johnsons’ motion to dismiss for lack of jurisdiction was correctly denied.

B. Guarantor Liability and Early-Release Clauses Under Texas Law

1. Elements of Breach of Contract under Texas Law

The Banks’ claims against the Johnsons are straightforward breach‑of‑contract claims based on personal guaranties. Under Texas law, a plaintiff must prove:

1. the existence of a valid contract;
2. performance or tendered performance by the plaintiff;
3. breach of the contract by the defendant; and
4. damages sustained by the plaintiff as a result of the breach.

The Fifth Circuit cited Smith Int’l, Inc. v. Egle Group, 490 F.3d 380, 387 (5th Cir. 2007), which in turn quotes Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345, 351 (Tex. App. 2001). A breach occurs when “a party fails to perform a duty required by the contract.”

The district court had already concluded—and the Fifth Circuit noted—that the Johnsons did not dispute:

• the existence of valid contracts (credit agreement and guaranties);
• their non‑performance (failure to make payments under their guaranties); or
• the Banks’ damages.

Their sole defense was that they had been released from their guaranty obligations before the relevant defaults.

2. The Early-Release Clause and Conditions Precedent

The personal guaranty included an early‑release clause that remained effective until the “Termination Date” of Bridgelink’s loans but allowed the Johnsons to be released earlier if they satisfied specified conditions. Though the opinion does not quote Section 9.3 verbatim, it makes clear that three conditions had to be met:

1. No default. Bridgelink’s loan could not be in default at the time of release.
2. Two consecutive compliant quarters (financial covenants). Bridgelink had to submit evidence showing compliance with certain financial covenants for two consecutive quarters.
3. Two consecutive compliant quarters (prepayment requirements). The Banks had to confirm Bridgelink’s compliance with Section 2.7(b)(ii)’s prepayment requirements for those same two consecutive quarters.

These are classic conditions precedent: obligations or events that must occur before a contractual right (here, release of the guarantors) vests. Under Texas law, conditions precedent are generally strictly enforced, and the party seeking the benefit (the Johnsons) bears the burden of showing they were satisfied.

3. Continuing Default: The Unpaid Waiver Fee

The Fifth Circuit held that the Johnsons failed at the first condition—absence of default.

Under the credit agreement, Bridgelink’s failure to make its first interest payment constituted an event of default under Section 8.1(b). The Johnsons did not dispute that this default occurred. The Banks had agreed to waive that default through an amendment, but only if specified conditions were met, including prompt payment of a $170,000 waiver fee.

The Banks asserted—and the Johnsons produced no contrary evidence—that Bridgelink never paid the waiver fee. Without that payment, the waiver never became effective, and the default persisted. The Fifth Circuit therefore concluded that Bridgelink’s loan had been in default since at least Q1 2022, and that:

• the “no default” condition in the early‑release clause was never satisfied; and
• on this basis alone, the Johnsons could not have been released under Section 9.3.

This is an important practical point: a conditional waiver of default is only as good as the satisfaction of its own conditions. Failure to pay a waiver fee or meet other stated requirements leaves the default in place, with consequences for related guaranty provisions.

4. Even If No Default: The Consecutive-Quarter Requirement

The Fifth Circuit went on to say that its conclusion would be the same “even if we were to set aside Bridgelink’s prior default,” because the Johnsons could not show satisfaction of the second and third conditions (the consecutive‑quarter requirements).

The July 2022 amendment required the Johnsons to agree that Q1 2022 would not count as a compliant quarter under the early‑release clause. Thus, any two consecutive quarters had to be drawn from:

• Q2 2022 and Q3 2022, or
• a later period (which never arrived because the borrower defaulted again).

Thus, to establish their release, the Johnsons had to show that for both Q2 and Q3 2022:

• Bridgelink submitted compliance documents evidencing adherence to the financial covenants; and
• the Banks confirmed Bridgelink’s compliance with the prepayment requirements of Section 2.7(b)(ii).

5. Q2 2022: Compliance Conceded

As to Q2 2022, the Banks:

• acknowledged receipt of Bridgelink’s compliance package, and
• at the summary‑judgment hearing, expressly conceded that Bridgelink had complied with the relevant covenants and prepayment obligations for Q2.

The Fifth Circuit treated this concession as sufficient proof that the Q2 conditions were satisfied.

6. Q3 2022: Mere Acknowledgement vs. Confirmation of Compliance

The critical dispute concerned Q3 2022. The Johnsons argued that:

• Bridgelink had sent its Q3 compliance documents; and
• the Banks’ email acknowledging receipt of those documents constituted the required “confirmation” of compliance.

The Fifth Circuit rejected this argument as a matter of law.

The court distinguished between:

• Acknowledgement of receipt: an email or message stating that documents were received and would be reviewed; and
• Confirmation of compliance: an affirmative statement that the submitted materials demonstrate compliance with the relevant covenants and prepayment requirements.

The parties’ past practice reinforced this distinction:

• Q1 2022: the Banks first acknowledged receipt, then later (about a month afterwards) sent a separate confirmation that Bridgelink had complied with its covenants for that quarter.
• Q2 2022: the Banks again only acknowledged receipt by email. The district court treated Q2 as compliant only because the Banks expressly conceded compliance at the hearing, not because the acknowledgement email itself amounted to “confirmation.”

In Q3 2022, the Banks:

• acknowledged receipt of the compliance materials, but
• contested compliance at the summary‑judgment hearing.

Neither side produced any email or written document in which the Banks affirmatively stated that Q3 compliance was achieved. The Fifth Circuit thus held that:

• the Banks never confirmed Bridgelink’s compliance with the prepayment requirements for Q3; and
• without such confirmation, the Johnsons could not establish two consecutive compliant quarters as required by the release clause.

This is a significant holding: an acknowledgement‑of‑receipt email does not, without more, satisfy a contractual requirement that the lender “confirm” compliance. The difference between receiving documents and approving them is dispositive.

7. Summary Judgment Standard Applied

The Fifth Circuit reviewed the grant of summary judgment de novo, consistent with its precedent. See Bagley v. Albertsons, Inc., 492 F.3d 328, 330 (5th Cir. 2007). Under Federal Rule of Civil Procedure 56(a), summary judgment is appropriate when:

• “there is no genuine dispute as to any material fact,” and
• “the movant is entitled to judgment as a matter of law.”

On the early‑release issue, the Johnsons had the burden to produce evidence raising a genuine factual dispute that:

1. Bridgelink’s loan was not in default (or that defaults had been effectively waived); and

2. the conditions for early release had been satisfied, including two consecutive quarters of lender‑confirmed compliance.

The Fifth Circuit held:

• There was no evidence that Bridgelink paid the waiver fee or otherwise cured the Q1 default—so the “no default” condition remained unsatisfied.
• Even putting the default aside, there was no evidence of Q3 compliance confirmation. The Banks’ Q3 receipt email was legally insufficient to create a genuine issue of fact.

Accordingly, the Banks were entitled to judgment as a matter of law on their guaranty claims. The Johnsons remained personally liable for the unpaid obligations.

C. Precedents Cited and Their Influence

The opinion weaves together a number of prior decisions, each serving a specific role:

• Mitchell v. Maurer, 293 U.S. 237 (1934) – Establishes the duty of appellate courts to satisfy themselves of both their own jurisdiction and that of the district court. This justified the Fifth Circuit’s limited remand to address diversity.
• Grupo Dataflux v. Atlas Global Group, 541 U.S. 567 (2004) – Confirms that diversity is determined by the facts as they existed at the time of filing; post‑filing changes do not cure or create jurisdiction.
• Caterpillar Inc. v. Lewis, 519 U.S. 61 (1996) – Reiterates the “complete diversity” requirement: no plaintiff may share a state of citizenship with any defendant.
• Hertz Corp. v. Friend, 559 U.S. 77 (2010) – Provides the “nerve center” test for a corporation’s principal place of business, central to resolving Cadence’s citizenship.
• Harvey v. Grey Wolf Drilling Co., 542 F.3d 1077 (5th Cir. 2008) – Governs LLC citizenship, requiring courts to trace through each layer of membership to ultimate individuals.
• MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 929 F.3d 310 (5th Cir. 2019), and Stine v. Moore, 213 F.2d 446 (5th Cir. 1954) – Provide the framework for individual citizenship based on domicile and residence.
• Reed v. City of Arlington, 650 F.3d 571 (5th Cir. 2011) (en banc) – Sets forth the three‑part test for judicial estoppel; used here to reject the Johnsons’ estoppel argument.
• Haverkamp v. Linthicum, 6 F.4th 662 (5th Cir. 2021) – Cited to note the circuit’s uncertainty over whether judicial estoppel applies to jurisdictional issues, though the court resolved the case without deciding that question.
• Smith Int’l, Inc. v. Egle Group, 490 F.3d 380 (5th Cir. 2007) and Valero Mktg. & Supply Co. v. Kalama Int’l, 51 S.W.3d 345 (Tex. App. 2001) – Supply the Texas elements of a breach‑of‑contract claim.
• In re Fort Worth Chamber of Commerce, 100 F.4th 528 (5th Cir. 2024) – Supports the district court’s use of Federal Rule of Civil Procedure 62.1 to issue an indicative ruling on jurisdiction while the appeal was pending.
• Bagley v. Albertsons, Inc., 492 F.3d 328 (5th Cir. 2007) – Cited for the standard of review applicable to summary judgments (de novo review).

The Fifth Circuit does not innovate dramatically in doctrine; rather, it applies these authorities rigorously to a sophisticated fact pattern involving:

• a multi‑layered LLC ownership structure,
• a bank with dual headquarters,
• a contested guaranty release clause, and
• a conditional waiver of default.

D. Impact and Practical Implications

1. For Corporate and Financial Institutions: The “Nerve Center” of Multi-Headquartered Entities

The decision is especially significant for financial institutions and other corporations that:

• operate in multiple states,
• maintain several substantial offices or headquarters, and
• use different labels (“corporate headquarters,” “bank headquarters,” “principal corporate office”) in their public documents.

Key takeaways include:

• Only one principal place of business. Even where an institution maintains multiple headquarters, Hertz requires identifying a single nerve center. Dual headquarters do not mean dual citizenship under § 1332.
• Substance over labels. Courts will look beyond how a company labels its offices in SEC filings, marketing materials, or pleadings. The dispositive question is where officers and directors actually “direct, control, and coordinate” corporate activities.
• Board and management meetings matter. Regular in‑person meetings of boards and key committees can be powerful evidence of the nerve center’s location.
• Executive concentration is critical. The number and importance of executives located in each office weighs heavily. A majority of key officers in one state supports that state as the principal place of business.

Practically, this opinion encourages institutional litigants to:

• maintain clear internal documentation about executive locations, board and committee meeting sites, and decision‑making structures;
• be cautious in using terminology like “headquarters” or “principal corporate office” in public‑facing documents; and
• anticipate that opponents may comb through SEC filings and pleadings to argue competing nerve centers.

2. For Litigators: Judicial Estoppel and Jurisdictional Positions

The decision also sends a nuanced message about judicial estoppel in jurisdictional disputes:

• The Fifth Circuit remains cautious about applying judicial estoppel to subject‑matter jurisdiction issues, as suggested by Haverkamp. It again avoided formally deciding the point.
• Even assuming estoppel applies, litigants must show clear, unequivocal inconsistency in a party’s prior and current positions. Minor wording differences or the coexistence of “corporate headquarters” and “bank headquarters” are insufficient.

Litigants seeking to attack jurisdiction via estoppel should:

• identify cases where the opposing party explicitly used a different principal place of business to establish diversity;
• show that a court accepted that prior position; and
• demonstrate that the change is not merely semantic or based on new facts.

3. For Lenders and Guarantors: Drafting and Administering Release Clauses

The guaranty ruling has concrete implications for transactional lawyers and lenders:

• Conditions precedent must be satisfied precisely. Early‑release or “burn‑off” provisions will be enforced as written. If they require “confirmation” of compliance, a lender’s mere receipt of materials is not enough.
• Separate acknowledgement from approval. The court’s emphasis on the parties’ practice (receipt emails followed by separate compliance confirmations) illustrates how important it is to keep those communications distinct.
• Conditional waivers must be completed. Where a default waiver is conditioned on payment of a fee or other acts, failure to complete those acts means the default persists and may prevent guarantor release.
• Burden of proof on guarantors. Guarantors who seek to invoke a release clause bear the burden of coming forward with evidence that each condition was satisfied—quarter by quarter if necessary.

Best practices for lenders might include:

• using explicit, standardized language for “compliance confirmations,” clearly distinguishing them from acknowledgement-of‑receipt emails;
• keeping a centralized record of formal compliance determinations by quarter; and
• drafting guaranty release clauses that unambiguously define what constitutes “confirmation” and by whom it must be made.

For guarantors and borrowers, the opinion underscores the importance of:

• documenting not just the submission of compliance materials but also the lender’s explicit acknowledgment of compliance when the contract requires it; and
• carefully negotiating amendments that may reset or nullify the applicability of earlier compliant periods (as occurred with Q1 2022 here).

4. For Summary Judgment Practice

The case is also instructive for how courts evaluate summary judgment in commercial disputes:

• Concessions matter. The Banks’ in‑court concession regarding Q2 compliance was treated as dispositive for that quarter. Oral concessions can effectively substitute for missing documents.
• Silence is fatal where burden lies with the non‑movant. The Johnsons provided no evidence that the waiver fee was paid, no documentary Q3 compliance confirmation, and no testimony to fill those gaps. As the parties resisting summary judgment, they bore the risk of that silence.
• Emails are read carefully and narrowly. Courts will parse language to distinguish between administrative acknowledgements and substantive approvals, rather than inferring more favorable meanings for the non‑movant.

V. Simplifying Key Legal Concepts

Several doctrines in the opinion can be opaque to non‑lawyers. The following is a simplified explanation.

1. Diversity Jurisdiction

Federal courts can hear many state‑law disputes if the opposing sides are from different states and the amount in controversy is over $75,000. This is called “diversity jurisdiction.” To qualify:

• No plaintiff can be from the same state as any defendant.
• If that condition is met at the time the lawsuit is filed, later moves or citizenship changes usually do not affect jurisdiction.

2. Principal Place of Business and the “Nerve Center”

Corporations (including many banks) are citizens of:

• the state where they are incorporated; and
• the state where their “principal place of business” is located.

The Supreme Court has said that the principal place of business is the “nerve center”: the place where top officers run the company day‑to‑day. This is usually, but not always, the place called “headquarters” in public materials. If a company has more than one major office, courts must decide which one is truly the nerve center based on where key decisions are actually made.

3. LLC Citizenship

Limited liability companies (LLCs) are not treated like corporations for diversity purposes. Instead, an LLC is a citizen of every state where its members are citizens. If an LLC’s member is another LLC, courts must keep tracing ownership layers until they reach actual individuals or corporations, then use those citizens’ states as the LLC’s citizenship.

4. Judicial Estoppel

Judicial estoppel is a fairness doctrine that prevents a party from:

• taking one legal position in a court case, and
• later taking the opposite position in another case,

if:

• the positions are clearly inconsistent,
• a court accepted the first position, and
• the shift is not accidental or based on new information.

In this case, the defendants argued Cadence had previously claimed to be headquartered in Houston (for jurisdictional purposes) and should not now be allowed to claim its principal place of business is in Tupelo. The court found no clear inconsistency between saying that one office is the “corporate headquarters” and another is the “principal place of business” for the bank’s operations.

5. Guaranties and Early-Release Clauses

A guaranty is a promise by a third party (the guarantor) to pay or perform if the primary obligor (the borrower) fails to do so. An early‑release clause is a contract term that allows the guarantor to be released from this obligation if certain conditions occur—often tied to the borrower’s good performance for a fixed period.

Those conditions might include:

• the borrower not being in default;
• the borrower meeting financial targets for several consecutive quarters; and
• the lender formally confirming that those targets were met.

Courts treat these as strict conditions. If any part is not satisfied, the guarantor remains liable.

6. Default, Waiver, and Conditional Waiver Fees

A borrower is “in default” when it fails to do what the loan contract requires—such as failing to make a payment on time. Sometimes, lenders agree to waive a default if the borrower meets new conditions, such as:

• paying a “waiver fee,” or
• performing additional covenants.

If those new conditions are not met—e.g., the waiver fee is never paid—the default is not actually waived and continues to exist, with consequences for guarantors and future enforcement.

7. Summary Judgment

Summary judgment is a procedure to resolve a case (or parts of it) without a trial when there is:

• no real dispute about the key facts, and
• the moving party is entitled to win under the law.

The party opposing summary judgment must show real evidence—documents, sworn testimony, admissions, etc.—that creates a genuine factual dispute. Mere argument, speculation, or ambiguous documents are not enough.

VI. Conclusion

Cadence Bank v. Bridgelink reinforces two important principles in federal civil litigation.

First, it offers a careful, fact‑intensive application of the Hertz nerve‑center test to a multi‑headquartered financial institution. By focusing on the actual location of executive decision‑making, board activity, and management committee meetings, the Fifth Circuit confirms that:

• public branding or ambiguous references to “corporate headquarters” do not control; and
• even complex, multi‑state institutions have a single principal place of business for diversity‑jurisdiction purposes.

Second, the opinion underscores the strict enforcement of guarantor early‑release clauses and conditional waivers under Texas contract law. Guarantors bear the burden of demonstrating:

• that defaults were actually cured or waived in accordance with contractual conditions; and
• that each prerequisite to early release—such as lender “confirmation” of compliance—was fully and unambiguously satisfied.

Mere acknowledgement that compliance documents were received, absent a clear approval, will not suffice. Nor will informal understandings or incomplete performance of waiver conditions. In commercial lending practice, the message is clear: if a release provision depends on precise steps being taken and confirmed, those steps must be documented rigorously.

For jurisdictional doctrine and commercial law alike, Cadence Bank v. Bridgelink serves both as a clarification of existing principles and a practical guide to how courts will apply them in high‑stakes banking and guaranty disputes.