Shocker

Trustees Reveal the “Gotcha!”

HK vilified for not taking part in a stacked committee that doesn’t allow deliberation (hint: there won’t be any) disclosure.

The act is getting really stale.

Contrary to the dissidents’ assertions, David Barry was validly elected in January 2017 by nearly two-thirds of the votes cast. It is now clear that the dissidents have been misleading shareholders about their apparent intentions all along. The dissidents’ motion is nothing other than an effort to seize control of not just one, but two of the three Trustee seats. In doing so, the dissidents have laid bare their apparent intention: to undertake a hostile takeover by seizing control of TPL without paying a control premium to all shareholders.

As opposed to seizing control with no economic stake?

 

Court Orders Stay on Discovery

12(c) triggers automatic stay

For these reasons, the Court holds that Defendant’s 12(c) motion triggers the automatic discovery stay of the PSLRA. The Court therefore ORDERS that all discovery and other proceedings in this matter are STAYED until Defendant’s motion for judgment on the pleadings is resolved. Additionally, fourteen days after the Court enters its ruling on the Defendant’s motion, the parties shall file a joint proposed discovery schedule. Requests for additional affirmative relief, such as relief from the stay, shall be made by motion.

More info on 12(c)

Injunction + Request for Immediate Seat

New court docs at HK site

See docs labeled 6/25.

Press Release

White card asks court for 1) immediate confirmation of Oliver as Trustee and 2) an injunction on Trustee activity in the absence of Oliver.

It is unclear to me why these two requests weren’t filed immediately post-election or along with the countersuit.  It looks like the time requested for trial (1yr from now) was cause to get moving.

Discovery sounds like it’s terrible so far.

I think a risk now is that the blue ribbon commission gets together and converts to a C-Corp very quickly and in doing so installs a very insular board. Maybe I’m crazy but (as we’ve seen) stranger things have happened.

From Press release.  Highlighting mine:

“In order to bring the Court case to a prompt resolution, the Investor Group has filed with the United States District Court for the Northern District of Texas a request for a declaratory judgment that (1) the vote at the May 22, 2019 special meeting was valid and Mr. Oliver has been duly elected a TPL Trustee, and (2) David Barry has never been duly elected a TPL Trustee, among other things.  To prevent any further abrogation of TPL shareholders’ rights in connection with the May 2019 election, the Investor Group has also requested that the Court issue a preliminary injunction prohibiting Mr. Barry and Mr. Norris from taking any action on TPL’s behalf without Mr. Oliver’s participation as a fully empowered Trustee.  The Investor Group has also requested that the Court schedule the hearing on their motion for August 5, 2019, or as soon thereafter as the Court is available. The Court filings are available here: https://horizonkinetics.com/tpl/.

“On June 14, 2019, Mr. Barry and Mr. Norris issued a press release stating they were “obliged to remind shareholders that the proxy solicitation is suspended while the litigation is pending.”  One week later, their counsel requested, in a Court filing, a trial on the merits of the lawsuit not commence until at least August 31, 2020.  These recent statements – in addition to the daunting discovery requests served last week by Incumbents’ counsel on the Investor Group, including Eric Oliver’s son and Allan Tessler’s two daughters – make clear TPL’s true motivations behind its lawsuit: (1) intimidate the Investor Group, (2) impose on over 15,000 shareholders at least a year-long delay, and (3) incur the costs of protracted litigation. All of these nefarious tactics were taken in an effort to dodge the shareholders’ election of Mr. Oliver as Trustee.  In the meantime, the Incumbents continue to illegally manage TPL without the necessary checks Mr. Oliver would bring as a duly elected Trustee.  All TPL shareholders should be aligned in asking TPL management to fully cooperate in the prompt resolution of these matters.”

From court docs on injunction:

Counterclaim Plaintiffs also respectfully move for the issuance of a preliminary injunction that:

1. Either (i) prohibits Counterclaim Defendants from taking any action on TPL’s behalf without Mr. Oliver’s participation as a fully empowered trustee; or (ii) prohibits Counterclaim Defendants from any further unauthorized postponement of the election by requiring the previously scheduled May 22, 2019 special meeting of shareholders be reconvened within five days of entry of the injunction to allow any additional votes to be cast and the official results be confirmed and announced by TPL via press release or securities filing; and

2. Prohibits Mr. Barry from directly or indirectly taking any action on TPL’s behalf until a new election can be held pursuant to the requirements of TPL’s Declaration of Trust.

As explained in the accompanying memorandum of law, the disputes between Incumbents and TPL’s shareholders are ripe for swift resolution by declaratory judgment because the key facts underlying the disputes are uncontroverted. In addition, all four relevant factors weigh in favor of the issuance of interim injunctive relief: Counterclaim Plaintiffs are substantially likely to prevail on the merits; they and other TPL shareholders will suffer irreparable harm if the preliminary injunction does not issue; the balance of harm weighs in their favor; and issuance of preliminary injunction will serve the public interest.

Deliberate in Secret

https://www.prnewswire.com/news-releases/investor-group-responds-to-texas-pacific-lands-formation-of-conversion-exploration-committee-300874810.html

A far more important issue, though, is that the rules of the Charter you constructed require, among other philosophically interesting conditions, that the Committee members deliberate this topic in secret. Nor may they release any information, even after the conclusion of the Committee’s work, without your approval. Yet, that is contrary to the well and universally accepted principles of responsible and ethical corporate governance.

Sounds like the HK rep was being invited to a mob hit.