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.”