M&P BEING SUED / CLASS-ACTION SUIT AGAINST HALCON, M&P & CX

 

Hello everyone:

                         I have not posted anything on here before. I have always just read the comments of others. I thought I would just post some thoughts. After being patient for 8 1/2 months I still have no answers like others in the south east Mercer County area. Is Halcon going to be held responsible for their actions? Are they going to be made to pay for the contracts they signed for? How qualified is M&P when it comes to representing the landowners of group 4 against a company like Halcon with deep pockets. Will we get an honest effort from M&P or will they make it as short as possible and except less than what we deserve to mitigate damages on their behalf. I have just read, in detail, the civil suit against M&P by Terra Energy LLC. Now it seems to me that the landowners not only have to worry about being pushed around by an unethical oil & gas Co, but now we have to worry about the real motives of the law firm we have to represent us. Are they going to treat clients like they treated business partners? I think if given a chance M&P will come back to the land owners after any legal actions against Halcon with a bogus report how they couldn't do much and if we continue it will tie up our lands for years, of course due to a half hearted attempt at getting us what we legally are owed.

                        I only have this attitude after listening to M&P for 8 1/2 months tell us how important it is to stick together as a group but they will break up the group at the drop of a hat to sign a little chunk to this O&G Co and another chunk to a different O&G Co. This sticking together only benefitted them by having all of us available to them for whatever size of lease they could get from any other O&G Co. After seeing an E-Mail to Terra Energy Advisors LLC from Jack Polochak describing how maybe Terra Energy should  get some leases signed by an O&G Co that are less than desirable for landowners to make it look like A Co he was partnering up with was successful in the oil and gas leasing business. That just shows me that he will sacrifice his clients profits to improve his and his associates. I think everyone should read the Lawsuit especially the landowners of group 4. Maybe I am seeing this in a sinister way and I am just swayed by how the rest of the world does things these days. Here is the link to the Lawsuit. I would like to know how many other landowners see it the way I do.

MPLawsuit.pdf

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015334grltd9mPermalink Reply by 015334grltd9m on March 6, 2013 at 1:24am

Jim,

Wow!  sounds to me that you need to lawyer up here with due respect.  Never seen a lawyer here on GMS cross examining.

Permalink Reply by James Brink, Esq. on March 6, 2013 at 3:56am

Naw, no need for that!  I was accused of misstating facts and making baseless accusations.  I am merely giving Jim L. the opportunity of clarifying the misstatements that he said I made.  That's all.  There's nothing more to it than that.  You will notice, however, that no response was posted.

Permalink Reply by Schnoozie on March 6, 2013 at 4:17am

Ron, this is not going to go anywhere. Time to suck it up and move on. Lesson learned.

All parties involved, (except the landowner's of course) will simply state that there was no written guarantee between the, operators, CX-M&P Landmen, and the landowners, anywhere.. that both parties signed, that each and every acre signed up was to be included in any proposed deal at a set price. It was all fluff, clever salesmanship and everyone taking a chance based on a possible deal. The fact that everyone leaving those meetings and after siging those papers felt that they had a promise from CX-M&P, was about only one thing, getting acreage in their fancy propriotary software they touted so the operators could make their picks, which they did..

No company would ever promise this to a Broker-Land Gatherer like CX-M&P. Not all land is the same.

There is no way that they would take it all, they will blame it on the field staff who ran the meetings, blame it on each other. Everyone will sue back and forth for years. Then settle or keep suing.

My neighbors...please be cautious next time.

 

Permalink Reply by Schnoozie on March 6, 2013 at 4:33am

It would only make complete and proper business sense that they knew. Of course they knew.

They can very simply deny it, problem solved.

Permalink Reply by p umpjack on March 6, 2013 at 6:30am

specific ami- option lease with a geology clause unfortunate for landowners good for oil business

 

standard business for o-g

Permalink Reply by Jim Litwinowicz on February 22, 2013 at 6:55am

There are issues at play that no one has discussed here, including the attorneys that are posting. I'll try to explain it as best I can as a layman.  Keep in mind I m not an attorney and this is in no way to be taken as legal advice. Talk to an attorney for that. If I get anything wrong I am sure the attorneys here will correct me;

When a contract is breached, one does not just file a lawsuit for the financial loss. They have a responsibility to minimize the damage. For example, you rent a home to someone for $1000/mo and have a one yr contract with the renter. After three months the renter skips town and doesn't pay. As the homeowner you need to try to minimize your loss by trying to rent the home again. Say you advertize it but it stays empty for three months and then you rent it out for $800/mo.  That means you  lost $3000 while it was empty, $200/mo for six months or $1200 and the cost of the additional advertising, say $100. Say you also had to repaint a room for $250. You then sue for the amount of loss or $4550 , if my math is right. Same here. Cx/M&P have to attempt to get another lease  for all members. If they get a lease at less than the Halcon deal, they have cause for the difference.  So if someone signs a lease for $3000/acre they can file a claim for the $850 difference.

Here is my take on what happened and what may happen. Vista had a lot of leases that were HBPd in Mercer Co and were negotiating with several companies to assign the deep rights last spring. Much of that acreage overlapped with parcels that Cx/M&P were marketing. Halcon was very confident that they were going to acquire those rights in Mercer and thus outbid others for the MtJkn4 group. But Vista elected to go with Shell after Halcon had already signed the LOI with the Mercer group. Halcon then decided to not accept all the parcels. Perhaps they think there is a flaw in the LOI they can exploit. Maybe they feel that paying the difference in leases that people eventually sign is cheaper than paying for parcels they don't want. It is my guess that they will drag this out as best they can for a while and then offer a settlement, say maybe $300/acre. At that point it will be up to people to decide whether accept or continuing litigating.

Again this is all my opinion, not any legal advice. If I have anything wrong I will gladly accept any corrections by the attorneys. If you have questions on this or other legal matters ask an attorney.

Permalink Reply by Samuel J. Orr on February 22, 2013 at 7:44am

I think that is a reasonable scenario that you propose. I again wonder why aggrieved landowners who call M$P complain of having calls diverted and voicemails not returned. I continue to wonder whether M&P / CX are expending any effort to find alternative leases for the lands that were rejected. I hope that they are expending considerable efforts in this endeavor but I have my reservations. I suppose I have said this all before. In summary if we assume Halcon is the prime villain, it still seems that M&P perhaps should revise how they do business and more carefully read any leases which they recommend to landowners. I maintain, perhaps wrongly, that a lease or lease option that required Halcon to lease all the acreage in Mount Jackson 4 except for such parcels where the landowners title was defective should not have been a difficult proposition to prepare for reasonably competent attorneys let alone a firm like M&P who purports to have special expertise in all matters related to O&G leasing. If my opinion on this is in error I would hope that one of the attorneys who post to the site would correct me. As for the observation that no suits have been filed against M&P, I would only state that the plaintiffs may have had to make some choices in whom to sue. Apart from whether Halcon or M&P are solely at fault or each partially at fault, it is indeed Halcon who has the deep pockets. There is no way that M&P has assets or insurance available to cover a judgment of perhaps $150,000,000 dollars. To the extent that the plaintiffs need M&P's cooperation in the class action suit against Halcon they may have made a tactical decision not to name M&P as a defendant and forego thereby any possible recovery from M&P. The above is all speculation on my part but like yours Jim, I think my speculations may have some validity. 

Permalink Reply by Kevin Senich on February 22, 2013 at 1:19pm

Mr. Litwinowicz:

My understanding of PA law is sketchy, but a non-breaching lessor has no duty to mitigate under a lease where a lessee "abandons the property".  See Stonehedge Square v. Movie Merchants, 552 Pa. 412 (1998), 715 A. 2d 1082.  This presupposes, of course, that the rejected landowners of MJLG4 actually had leases with Halcon.  This is the issue that is raised by the Order of Payment being different from the uniform offers of lease made by the landowners.

Mitigation of damages is never required where such mitigation is unfeasible.  Here substantial question would exist where landowners joined in common cause are treated differently by a common lessor as to whether the rejected landowners could possibly mitigate.  What producer or developer would lease under the same terms as Halcon did with the accepted landowners?  What company would be in a similar situation as regards developing prospects?   Even in the pending class action, if Halcon were held fully responsible, how do you make the rejected landowners whole where Halcon has already shown a development preference for the accepted parcels? 

A myriad of questions arises where as here you have a group of individuals bound to one another in agreement not to contract with any lessee unless that lessee agrees to treat all equally. 

Permalink Reply by Samuel J. Orr on February 22, 2013 at 3:00pm

 Michael Senich: Thanks once again for some good research. I have no problem with lawyers posting  opinions and citing precedent. I have no problem with M&P/CX, Halcon, or the lawyers for the landowners  benefiting from the discussions on this forum. I continue to learn from your postings and I suspect that many others feel do a s well. I think law students could learn a lot from this particular thread and probably make valuable contributions as well.

Permalink Reply by Michael R on February 22, 2013 at 7:26am
Im going to have to agree with what Mike C recently posted. Jim, I do not know you, nor do I really care to. You may be a great person and your intentions may be well but do not insult everyone here by coming into this discussion and acting like you have no idea whats been going on. I have read your posts since this whole issue began. To say that you are just now reading and learning what is happening is absurd.

As for your analogy. I dont agree with it. Youre missing the fact that the landowner representatives had a duty to keep the group as a whole, not split it up. It was supposed to be all or none. If splitting up the group was a potential possibility, why was that not conveyed to the landowners?

You mentioned going to meetings to find out more information. Going to the meetings imo is a waste of gas, time and patience. I for one was disgusted by the way the initial landowner meeting in lakeview was held after the announcement that Halcon was going to opt out. The speakers came across as smug, even cracking jokes and making snide comments to landowners who spoke up. I actually couldnt believe the attitude towards the whole situation. Im sure I wasnt the only one thinking this as it was happening. In my opinion, it was not something that should have been taken lightly.

This issue needs to be addressed further and Im glad it is because the two minute evening news clip and 200 word article in the local papers didnt due justice compared to how many landowners in Mercer County this affected.

Also, I think this thread has been rather tame compared to what people are actually feeling towards the situation.
Permalink Reply by Jim Litwinowicz on February 22, 2013 at 7:59am

Micheal R; I posted that I had never heard of Terra or that lawsuit, not the Halcon debacle.

Since people are having trouble keeping the facts straight, I am done commenting on this issue and will just wait for all lawsuit(s) to play out. None of us know all the facts anyway so it makes no sense to continue arguing over that which we don't have all the facts.

Good luck to all the landowners affected by this.

Permalink Reply by Mike C. on February 22, 2013 at 8:09am

Jim your reading comprehension needs work.  No one questioned what you have heard of and what you have not.  The problem "for you" is that you have held yourself out as someone representing CX thus representing M&P.  You misrepresented what Halcon was going to do for the people of Mercer and in turn you placed yourself on the hook along with M&P.  So unless M&P states that you went rogue and acted on your own, they are going to be on the hook with you.  Anyone that has ever dealt with signing any form of contract knows that the deal is not done unless it is paid for.  Halcon never paid because they never had to.  Halcon cherry picked what they wanted. In turn they have honored their end of the deal. If it was all or nothing then they should be sitting with nothing right now.  The issue comes down to CX/M&P v the Lessors that were lied to.  Good luck to the Lessors in Mercer county and Jim I hope M&P represents you more effectively than they represented the people of Mercer. 

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