Dallas Morning News Reports

Dallas Morning News: Texas Pacific Land Trust has sky-high returns in the Permian. Why isn’t that enough?

The challengers counter that a trust created in 1888 — and designed to pay off investors in the bankrupt Texas Pacific Railway Co. — is not appropriate for a publicly traded company worth billions of dollars.

The trust is not just liquidating the land that secured the railroad’s defaulted bonds, as originally intended. It’s created a water operating company, made complex royalty trades and reinvested nearly $100 million annually, the investor group wrote in a presentation.  

There’s no precedent for such a company to be structured as a business trust, it said. Nor is there “any logical justification, in our view, to forgo disclosures, controls and governance of a modern operating corporation,” the group wrote.

Instead of being run by diverse directors serving staggered terms, TPL is led by three trustees effectively appointed for life. One spot opened after Maurice Meyer III, a trustee since 1991, resigned in February because of health problems. Meyer died in late March.

TPL has held just four shareholder meetings in 30 years, the investors wrote in a letter to shareholders. And company leaders, including trustees and top management, hold just 1,600 shares, less than 0.03% of the outstanding stock.

That small stake runs counter to the common practice of requiring leaders of public companies to hold meaningful shares — to have real “skin in the game.”

2 thoughts on “Dallas Morning News Reports

  1. Does anyone have any fear that if Oliver gets elected he might find and expose some things going on that would cause the stock to tank?

    Liked by 2 people

    • That is an interesting thought, Jeffrey. I had not considered this, but its possible. I have felt the last couple of quarters there has been some “earnings management” going on, which long run may not be the best for shareholders. The idea of some really bad “Enron style” fraud seems remote, given they can’t have debt, they have high net profit margins, and the cash is flowing in at tidal wave proportions. Which of course could also be the opportunity for unethical behavior.

      However the opposite is if he isn’t elected, its also possible the retired general might also find some things that get exposed wth his good governance agenda.

      Either way there will be more transparency with TPL in the future and thats a good thing. Shareholders are showing they have a voice, and its getting louder for change.

      Liked by 2 people

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