16 thoughts on “Defendants’ Post-Trial Reply Brief ”

  1. Thanks TPL Blogger for obtaining this document. Most of it appears to my eyes to be recapping of information we know, but the excerpt below caught my attention. Just think, if Prop 4 had passed, the dilution damage TPL management could have done within the 20% threshold (not requiring a shareholder vote) is astounding. They could have completed the purchase of Oxy and Brigham without bothering to get shareholder approval. To reward themselves for that empire building, they no doubt would have used another share issuance (under 20%) for an exec comp package. Then rinse and repeat, rinse and repeat until all the share authorization was tapped out and we shareholders are left massively diluted. These idiots emphasized in a lot of their proxy materials that Prop 4 was not in and of itself a dilution, but that sure would have been the end result of their sinister strategy before we knew what hit us.

    Nor is it difficult to see why the parties agreed to the broad, “related to”
    formulation of the Extraordinary Transactions carve-out. As Defendants have
    explained, the narrower “to approve” interpretation favored by TPL would mean that
    TPL could sidestep the Extraordinary Transactions carve-out by pursuing an
    acquisition in two steps (a share authorization and then an acquisition) rather than
    one (a vote to approve a share authorization for a specified acquisition). TPL argues
    that this is of little concern because stockholders would still have the right to vote
    on a transaction requiring the issuance of 20% or more of TPL’s outstanding stock. But this provides no comfort where even the largest of TPL’s potential transactions—including both the Oxy and Brigham transactions—would not have required the issuance of 20% or more of TPL’s outstanding stock.

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    • We all need to thank the Blogger for all he has done on our behalf. HK/SV’s lawyers took TPL’s to the woodshed. TPL’s kept embarrassing themselves hoping that some of their claims might stick to the wall but they seemed to have been written by law students, not actual attorneys.
      The Court should not only issue a verdict in our favor, but also issue discipline TPL & their counsel from the bench.

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  2. An interesting statistic from page 44-
    “Finally, TPL claims it cured its fraud by issuing corrective disclosures after
    trial. But this Court can take judicial notice of the fact that, between the record date for Proposal Four of September 22, 2022 and April 25, 2023, 6,226,000 shares of TPL common stock had been exchanged on the open market. Other than stock held by Defendants, TPL had 5,938,861 outstanding shares as of the record date.

    Thus, by the time TPL issued its corrective disclosures, its unaffiliated stockholder base had turned over more than 100%.”

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  3. They would have to ‘cure’ the fraud PRIOR to the record date. Shares were voted prior to that date will fraudulent misstatements. You can’t ‘cure’ after the fact.

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    • I was referring to the 100% turnover of stockholder ownership. Of course some of that could be day traders buying and selling.

      Liked by 1 person

  4. Really appreciate TPL blogger for finding and continuing to pay for legal briefs. Without this blog we would dwell in the darkness, without the sunshine of visibility.

    I reviewed the latest brief and will share some comments. I made an error on my review of the May 26th where I thought that was the second brief by Team HK/SV. This in fact is the second brief, of the two briefs per side, with the defense having the last say.

    This brief refutes arguments made in the second brief of TPL. Its interesting its both shorter in length and has a tighter focus. As the arguments phase winds down, that is expected.

    The arguments made continue to bolster that Proposal 4 was a recapitalization, an extra-ordinary transaction, and is also related to governance. All of these should allow HK/SV to vote without restriction is the continuing position.

    Its amusing how TPL management in their last brief tried to minimize damaging statements at trial from Patrick Hessler as a “junior member of the management team”, while leaving out that he is the Vice President of Acquisitions and is senior management.

    This is a similar pattern, as the brief makes another refutation: “TPL seeks to distance itself from its own Chairman-David Barry because he conceded under oath that the “primary purpose” of Proposal Four was to facilitate acquisitions with stock.”

    This and other places show a pattern of TPL’s brief trying to diminishing the importance of the most damaging testimony or trying misdirection to case law that isn’t current or not relevant.

    The last part of the final HK/SV brief further justifies the “unclean hands” arguments that as a result of knowingly made selective information not fairly disclosed should be enough on its own to toss out the TPL management case.

    Specifically issues of not disclosing directors Stahl and Oliver opposed Proposal 4, the Glass Lewis recommendation to vote yes so the company could meet “current and future obligations”, and then Glass Lewis changing their recommendation after court testimony revealed it was false and misleading.

    It’s laughable TPL’s counsel has tried to refute this by first saying its too late to claim “unclean hands”, and the misleading parts were corrected by filing corrective statements 5 days before the 2022 adjourned meeting in May 2023.

    The final brief by HK/SV destroys the plaintiff’s defense on this by noting “the Court found there to be “ample evidence to bring the crime-fraud exception into play on the fraud side” regarding what transpired during the process of drafting that solicitation.” This statement was made by the judge at trial.

    And they also make a solid point stating when the company provided the corrective statements: “The impact a timely disclosure might have had, however, was apparent from the fact that over 200,000 shares were added to the votes “against” Proposal Four after the supplemental disclosure.”

    I have reviewed Delaware civil procedure to try and determine what happens at the hearing on Friday. The description seems to suggest its questions from the judge, and answers from the legal teams. Perhaps the judge is seeking further clarification on each sides position? The briefs seem exhaustive, so am unsure of the need for Q/A.

    Ruling decisions are usually announced from the bench and the supporting legal opinions later issued and filed. Its also possible that could happen.

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  5. When the dust settles, what then. You have a great asset that will be mismanaged into oblivion by a Board (certain board members) who misinform shareholders and are jus4t there at TPL to enrich themselves while being so stupid as to use $20 million plus to sue themselves. I am long gone.

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      • No, shorting doesn’t have good risk reward. Sold some in Nov 2022 when the price was silly, then more on the way down. Been a shareholder for over a decade. I would immediately rebuy if mgt would spin off water co, then mgt can have the operating co, while TPL Land reverts to a rapidly liquidating trust.

        The whole point of owning TPL is to have a royalty on quality assets where your revenue is 95% profit and costs are almost nil. An inflation pass through. I love TPL, just tired of the stupidity. If the Board was replaced by apes, then I would become a shareholder again. See https://youtu.be/3pH98f8kz5w plus you could feed them bananas rather than $200,000 per year.

        The clown show fell into a gold mine and they are trying to loot it. Do the Board members who are suing HK have any skill in allocating capital much less making acquisitions?

        Just a damn shame.

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  6. TPL Blog – all of your work is greatly appreciated by the ACTUAL shareholders, so thank you for that. Ever since I peppered the Board with questions at the 2022 Board meeting, I have found myself more disgusted with them every day. What I am happy about is that this fiasco will soon end. It is truly amazing to me that these people own very little shares and are fighting so hard to hold on to their power. It may lead one to believe that they are fighting for their “freedom” from prison. When you look back and pick at each complaint we have all had about the board, it makes you wonder why Ty & Chris have not bailed on David, et al.; at least to save their reputations. There are so many unanswered questions. Since that fateful day last October in Dallas, I have been considering running for a seat on the board. We need someone that actually owns shares who will stand with and for the shareholders. I will announce my intentions in a few weeks, – Regards, Craig Cohen

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    • Does this carveout language indicate that HK and SV can vote against board recommendations regarding board members without violating the agreement? (as they did with Dana).

      “In the Stockholders’ Agreement, TPL agreed to grant Defendants two broad
      carve-outs from their commitment to vote with the recommendations of TPL’s
      Board. Those carve-outs are for any proposals “related to” either (i) an
      “Extraordinary Transaction”—which is defined to include an “acquisition,”
      “recapitalization,” or any “other matters involving a corporate transaction that
      require a stockholder vote”—or (ii) “governance, environmental or social matters.”

      With HK and SV votes, getting rid of Norris, Barry and Cook seems doable. without?

      ps. I am thinking of getting a dog and naming it Norris, so that when it Barrys the truth in the backyard, I can scold it for having unclean paws. bad doggie

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  8. I’m the third generation of TPL shareholder in my family. I’ve only recently started following the machinations of the management, and I have a simple (and perhaps naive) question – who appointed this CEO? Additionally — how have HK/SV, being by far the largest shareholders, not gotten more board members to oust him/his management team?

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    • Glover was put in place by Barry & Norris while TPL was still a trust. They have since hired a bunch of VPs with indecent salaries, benefits, and golden parachutes. HK/EO have been bound by the Shareholders’ Agreement until now.

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    • I’ve always wondered what the sequence of events were that resulted in David Barry becoming a Trustee and Tyler Glover being appointed as CEO of TPL when it was a trust. So much of the insanity that has ensued can be traced back to directly to those moves. Glover has clearly been Barry’s puppet from the onset. Once we win this lawsuit and set our sights on cleaning house during the next election cycle, there should be inquiry into how legitimate and qualified they even were to begin with.

      Here’s a blurb that appeared in the 2016 Annual Report (read it and weep):

      The Trustees (who were Maurice Meyer and John Norris at the time) were saddened that Mr. James K. Norwood passed away on September 27, 2016. Mr. Norwood was a Trustee from June 14, 2006 and the Trust will surely miss him. At a Special Meeting of the Holders of Sub-Share Certificates of Proprietary Interest held on January 12, 2017, the holders of Sub-share Certificates elected Mr. David E. Barry as a Trustee to fill the vacancy created by the death of Mr. Norwood.

      Mr. Barry graduated from the College of Holy Cross in 1966 with a degree in Physics and from Harvard Law School in 1969. He spent his entire legal career at the law firm of Kelley Drye & Warren LLP until he became a retired partner in 2012. Mr. Barry is now President of Sidra Real Estate, Inc. and Tarka Resources, Inc.

      Mr. Tyler Glover, formerly serving the Trust as Assistant General Agent, was promoted to General Agent, Chief Executive Officer and Secretary. Mr. Robert J. Packer, formerly serving as Chief Financial Officer, was promoted to General Agent and Chief Financial Officer.

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