Settlement Agreement

Docs posted on Edgar.  Some things that caught my eye below.  Big things to me are 1) 5 of 7 votes are needed for a decision or recommendation which puts concerns around the perceived 4/3 split to rest and 2) montly updates to investors.


Committee. The Committee will continue to be governed by its charter dated June 23, 2019, as amended and restated on July 30, 2019 (the “Committee Charter”). The CEC shall complete its work by December 31, 2019 (the “Committee Period”), unless the CEC determines otherwise. All decisions and recommendations of the Committee shall require the affirmative vote of at least five of the seven members. Due to the legal obligations of the Trustees as fiduciaries, the Committee’s recommendation will be non-binding on the Trustees and the Trust. If the Committee recommends a plan of Conversion (as defined below) by the end of the Committee Period, the Trustees will have a time period of 30 days following the receipt of such recommendation to decide whether to implement such plan of Conversion (such time period, the “Decision Period”).

Settlement Agreement

The Committee shall be comprised of a maximum of seven members. The members of the Committee shall be: (i) John R. Norris III; (ii) David E. Barry; (iii) General Donald G. Cook, USAF (Ret.); (iv) Dana McGinnis; (v)  Eric Oliver; (vi) Murray Stahl; and (vii) Craig Hodges. The Committee members shall serve for so long as the Committee is in existence or until their earlier resignation or death, in which case the remaining members of the Committee shall as promptly as practicable select a replacement with the approval of five Committee members then serving and consent of the Trustees (such consent not to be unreasonably withheld, delayed or conditioned). Mr. Norris and Mr. Barry shall serve as co-chairmen of the Committee (“Co-Chairmen”). The Co-Chairmen shall coordinate all their activities in consultation with other Committee members. The Committee may remove any member of the Committee (other than the Trustees) with the affirmative vote of five of the other Committee members if the Committee determines, in good faith, that reason exists to remove such member.

All members of the Committee agree to promptly confer and, if necessary, submit to mediation in front of a JAMS mediator in Dallas, Texas, within 20 days of any disputes arising out of or relating to this Charter.

Conversion Exporation Committee Charter

Without the prior written consent of the Trust, neither the Committee nor any of its members shall make any public announcements or other disclosures relating to the Committee and its work that has not previously been disclosed, including, but not limited to, discussions, recommendation, work product, and materials. Beginning in September, the Committee shall provide a report of its work to shareholders on a monthly basis provided that the Trustees approve such report (such approval not to be unreasonably withheld). Upon completion of its work, the Committee shall provide a final report to shareholders with the Committee’s recommendations provided that the Trustees approve such report (such approval not to be unreasonably withheld).

2Q Earnings

Full Press Release

SEC version

2q snapshot

$49,586 / $87,310 = 56.8% Q219 margin

$52,503 / $73,844 = 71.1% Q218 margin

Revenue up 18.4%

Net income down 5.6%

Tough quarter.  Back out the $4.9MM in land sales and it looks even worse.

The word expense is only used in the release twice and the context there was income tax expense.

Share count unchanged on the quarter at 7,756,156.

Time for change.



C-Corp Open Thread

7/31/19:  Would love to hear from readers what they would like to see in terms of governance and structure should TPL be converted to a corporation.

Your comments and replies to comments are welcome.

If the comments get substantive we will figure out a way to pin it to the top for a while so that it doesn’t get missed by our new gang of seven.

Update 8/1/19:  Thanks for your submission so far!

I’m going to leave this post at the top of the blog so we can keep the ideas flowing.  In a few days time I will put together a “top 5” or thereabouts that represents the majority of the sentiment.

We’ll keep the thread going until we capture the concensus of readers.  From there we’ll figure out a way to get it into the right hands.

Update 8/7/19:  Keep ’em coming!  Will start aggregating this weekend. 

Sounds Expensive

Sidley Represents Texas Pacific Land Trust in Settlement of Proxy Contest and Lawsuit

Sidley represented Texas Pacific Land Trust (NYSE: TPL) in its agreement to settle its litigation and proxy contest with an investor group led by Horizon Kinetics.

Sidley’s proxy contest team was led by partners Kai Haakon Liekefett and Holly Gregory and included associates Reuben Zaramian, Chris Porcelli, Sagar Sritharan and Philipp Nuernberger. Sidley’s litigation team was led by partners Yvette Ostolaza, Yolanda Garcia, Andrew W. Stern and Alex J. Kaplan and included counsel Jon Muenz, as well as associates Tiffanie Limbrick, Isaac G. Lara, Amanda Blau, Daniel Driscoll, Patrick Foley, Meaghan Nowell, David Silva, Kathleen Zink and Mason Parham.

6 partners.  In case you’re keeping score at home.

Joint Motion to Dismiss


On May 22, 2019, Plaintiffs filed an Amended Complaint alleging violations of the Securities Exchange Act of 1934 and seeking a declaratory judgment. Dkt No. 15. On June 18, 2019, Counter-Plaintiffs filed Amended Counterclaims also seeking a declaratory judgment and alleging various causes of action sounding in tort and contract. Dkt. No. 22. Having entered into a settlement agreement on July 30, 2019 (the “Agreement”), the Parties respectfully request that the Court dismiss all claims and counterclaims in this action, in their entirety, without prejudice. The Parties likewise respectfully request that the Court retain exclusive jurisdiction over the Parties for purposes of enforcing the Agreement. Plaintiffs and Counter-Plaintiffs agree that all claims and counterclaims should be dismissed without prejudice.


Settlement Agreement; LITIGATION DISMISSED

Texas Pacific Land Trust Enters into Settlement Agreement with Investor Group

Looks like we may be skipping a step here.

Old path was pro-governance Trustee gets elected; new Trustee pushed for c-corp or other modern governance.  New path could be that we get to modern governance without a Trustee getting elected.

Appears as if the Trustees get to save face by not having Oliver get fully elected.  Barry’s standing at Trustee is no longer challenged.  Personal liability for Trustees is no longer a threat.  Could be the beginnings of a graceful exit.

I’d have to assume that Oliver, Stahl, and Hodges will be pretty strong voices in what was formerly a stacked committee.

That said, one could make the argument that, on it’s face, the Committee looks to be split 4 to 3.

It’s General Cook’s world and we’re just living in it.  Paycheck time.  Let’s see you flex those “governance muscles” you spoke about, General.  All of this without winning a vote!

HK/Oliver/Hodges didn’t just fall off the turnip truck.  There is probably more good here than meets the eye when it comes to how the Committe will operate.


Investor Group to Join TPL’s Conversion Exploration Committee

Parties Agreed to Dismiss Pending Litigation in Federal District Court in Dallas

Third Trustee Seat to Remain Vacant Until Committee’s Work Concludes

July 31, 2019 07:30 AM Eastern Daylight Time

DALLAS–(BUSINESS WIRE)–Texas Pacific Land Trust (NYSE: TPL) (the “Trust” or “TPL”) today announced that it has entered into a settlement agreement (the “Settlement Agreement”) with the investor group led by Horizon Kinetics LLC, SoftVest, L.P., and ART-FGT Family Partners (the “Investor Group”) with respect to the previous proxy contest and the pending litigation between the parties in the U.S. District Court for the Northern District of Texas in Dallas.

Pursuant to the Settlement Agreement, three additional members will join TPL’s Conversion Exploration Committee: Murray Stahl, Chairman of Horizon Kinetics; Eric L. Oliver, Founder and President of SoftVest Advisors; and Craig Hodges, Chief Executive Officer of Hodges Capital. They will join the existing four members of the Committee: John R. Norris III and David E. Barry, the incumbent Trustees of TPL; Four-Star General Donald G. Cook, USAF (Retired); and Dana McGinnis, Founder and Chief Investment Officer of Mission Advisors.

The Committee, which has been charged to make a recommendation as to whether the Trust should be converted into a C-corporation and regarding appropriate governance changes, has been meeting since June on a regular basis and will complete its work by December 31, 2019, unless the Committee decides otherwise. The Committee will be chaired by the incumbent Trustees of TPL.

In connection with the Settlement Agreement, the parties have dismissed their litigation in the U.S. District Court for the Northern District of Texas in Dallas. The parties have further agreed that TPL’s third trustee position will remain vacant at least until the Committee has completed its work.

“We are pleased to have come to an amicable resolution,” said Trustee John Norris. “It is now time for all of us to come together, put aside our differences, and determine the best way forward for the Trust and all of its shareholders.”

Pursuant to the Settlement Agreement, the Trust and the Investor Group have also agreed to certain other terms. To reflect the terms of the Settlement Agreement, the Trust adopted an amended and restated charter for the Committee (the “Amended Charter”). The complete Settlement Agreement and Amended Charter will be included as an exhibit to a Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission.