Settlement Agreement; LITIGATION DISMISSED

tpltblogger12 Comments

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.

Lastly, NO MORE LITIGATION!

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.

 

 

12 thoughts on “Settlement Agreement; LITIGATION DISMISSED”

  2. I think you are hitting the nail on the head in reference to the operations. This piece is key, “the Trust adopted an amended and restated charter for the Committee (the “Amended Charter”).” I’m not going to lie, my initial reaction was a little disappointment when reading this press release. However, graceful exit and significantly decreased legal fees. I wonder if the trust agreed to pay for the investor groups legal fees as part of this settlement. And thank you very much TPL for quoting John Norris and NOT David Barry.

    Liked by 2 people

    • I have to believe everyone walked away with something. And us shareholders should get reduced costs and a renewed effort to buy back shares.

      Liked by 2 people

  4. The addition of Hodges is huge. They are aggressive and big believers in C-Corp + Buybacks. I think this news is worth 10% to 15% move in the name today. Hodges & Co have owned TPL for nearly 25+ years and are extremely sharp. Plus they are based in Texas!! Let’s not forget EO is also joining!!

    Liked by 2 people

  5. I think both parties when they took a realistic view of the long and winding legal road ahead decided a more pragmatic approach was needed. Which means compromise. And stopping what has to be some huge legal fees for both sides.

    Agree with others, on fiirst review I was disappointed, but I think long run its the beginning of the end for the existing trustees. It we can have a more frequent election process for trustees and more transparency then everyone wins.

    Disappointed Team Trustees can outvote Team Oliver on the committee, but the General may prove to be a key swing vote that leans towards openness and more often elections. If that happens, its just a matter of time until the current Trustees are history.

    And in the end, the federal case went the way most of them do, with 90% never getting to trial. But, its been two months of fun being the sportscaster calling the motion drama. 😀

    Liked by 2 people

  6. I withhold all comments until I see share BUYBACKS! I don’t care if the Wizard of Oz is on the committee. Buy back the shares. This has been a travesty, and all parties have held us, the remaining 70%+ voting rights shareholders hostage.

    Okay. Rant over. At least I see a nice pop in the stock today.

    Liked by 1 person

  7. Thanks Ted (and your brother) for all of your time and legal reviews, I loved them, but I hope they’re done with for a very long time.

    Liked by 2 people

  8. I admit I wanted this to go down differently but its good that we can sort of get back to business as usual. Thanks so much TED, your brother and TPLtblogger for everything. I don’t think the legal is truly done for a while yet. There are a lot of unresolved issues that can always turn up later on. I have to admit all of this was an education to me that even your best investment idea can have problems. Not selling any but am cautiously optimistic.

    Liked by 2 people

  10. I may have one more opportunity at legal play by play analysis.

    From the press release:
    “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.”

    There could be some fascinating details in the Settlement Agreement, and the Amended Charter for the 7 person committee. Looking forward to reading these when released, and offering observations.

    Its also worth noting the case was only dismissed, and not dismissed with prejudice. A dismissal with prejudice means it can cannot be refiled. Both parties are keeping their options open and can refile if fairness isn’t felt by both sides. Hopefully the legal bills have been distasteful enough to both sides and they will work together towards meaningful reform, which this fight has shown is clearly needed.

    Liked by 1 person

Comments are closed.