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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Permalink Reply by Samuel J. Orr on March 9, 2013 at 5:13am

 The term "such other due diligence deemed necessary at the sole discretion of the Lessee" must mean something. I suppose in the O&G leasing business it may include many things and perhaps there is some trade usage that defines what it may include. I still maintain that the term can not mean that Halcon can avoid payment FOR ANY REASON, OR FOR NO REASON WHATSOEVER!  If I am correct, was Halcon obligated to specify what particular meaning  within the broad term DUE DILIGENCE it was employing as an excuse to pay any particular landowner??  If Halcon can refuse for no reason whatsoever to pay for any particular acreage, then its obligations are I think illusory. I suspect one or more of the lawyers can get the drift of my thoughts on this. If I am correct,  said lawyers can express my thoughts on this subject more clearly. If I am wrong, they can correct my misimpressions. I think Mr. Senich may have commented on the above issue in the past!

Permalink Reply by Kevin Senich on March 9, 2013 at 9:45am

No.  The "due diligence" language of the LOI applies to those conditions reserved in the LOI.   None of those conditions recited in the LOI are at issue by operation of the language in the OOP.  No landowner was rejected because due diligence under the LOI triggered notice to the landowner to cure title, and the landowner failed in that duty.

"Geology" and "surface" considerations are not "restrictions".  "Restriction" is a legal term.  If you don't know what a term means, you should look it up in a legal dictionary.  A "restriction" is a legal limitation on the use of land imposed by statute, regulation or contract.  If you purchase a house in a gated community with  restrictive covenants (restrictions), one of them likely will be that you cannot paint your house purple. Likewise if Youngstown bans drilling within the City limits it imposes a restriction on all land within those City limits, and you cannot drill there.

"Restrictions" are definitely not "geology" and "surface" considerations.

Pardon my impatience, but does anybody have any good ideas as to why the conditions precedent to acceptance of the leases in the LOI differ from those in the OOP  --  whichever of the two OOPs.

 

Permalink Reply by Kevin Senich on March 9, 2013 at 11:13am

Fang:

You are absolutely right.  You cannot separate an attachment referenced in a contract from that contract.  It becomes an integrated part of that contract.

But attachments are not supposed to add new terms and conditions (distinguish in your mind "addendum" from "attachment").  Attachments are supposed to add detail consistent with the terms and conditions of the contract.

The OOP in this example is not an attachment as it so states in the LOI precisely because it essentially changes the nature of the contract.  It adds terms and conditions not found in the LOI or even referenced therein.  For example Halcon could easily have said in the LOI, "... subject to such additional terms and conditions as set forth in the attached Order of Payment".  It does not.

What irritates me is that the landowners were relying on M&P/CX to get this straight.  Multiple instruments must be internally consistent if they are to operate in harmony.  Here the rejected landowners point to the Offer Letter and the LOI for support; for its part Halcon rests on the OOP.  Both can persuasively argue that they fully performed under the language of the instruments upon which they relied. (This is why, as you correctly point out, the "Title Defects" and "other Defects" in the LOI become immaterial.)  THAT SHOULD NOT HAPPEN! 

The lawyers are responsible for getting this straight.  The problem is that you can't straighten something that is inherently crooked. 

Never trust a lawyer who says, "Trust, me.", so I won't.  But "surface" and "geology" are not what the LOI refers to in Section 10(f)(2).  I am very confident any court would say that.  Maybe Ralph, Jim or Steve would chime in on this.

Yes, the uniform Offer Letter is an offer from the MJLG4 members to Halcon.  But, it was drafted by Halcon, likely by the same person(s) who drafted the LOI.  This is not an uncommon practice. 

Permalink Reply by Rockjul on March 9, 2013 at 9:35am

  

Didn't CX/M&P have to submit the signed leases to Halcon to show authenticating signatures and descriptions of the properties? When they submitted them to Halcon wouldn't Halcon have noticed the OOP was missing the integral part of the terms "GEOLOGY"? Why wouldn't they have addressed that at the time? Maybe they didn't have to submit the actual signed lease documents. I'm not sure how that transpires with these types of deals but why wait till a Class Action Lawsuit to bring this omission to everyone’s attention?

015334grltd9mPermalink Reply by 015334grltd9m on March 9, 2013 at 9:35am

I'm a layperson here, so let me see if we can put this to rest in a simple manner.

1.  Did Halcon sign any document (lease,OOP, LOI) at mass signing?

I remember, all the leases I signed, I was the only one who signed until I got the check then I noticed signatures other than my own and the notary.  I bet the rejected landowners have no signatures on their documents either except their own and a notary.  So no signatures, no agreement in real estate.

Permalink Reply by James Brink, Esq. on March 9, 2013 at 11:24am

Again, let me throw this out for discussion.  Obviously, the Halcon transaction attorneys are pretty smart.  It is clear from my review of the landowners' lease package that they were making an offer of their land to Halcon.  Halcon could either accept their offer or reject it.  Contract Law 101 states that there is no contract without an acceptance of an offer.  So, if the landowners were merely extending offers to Halcon, then how can there be a breach of contract if the offers were not accepted?  This could explain why the landowners were told after the fact that there were no firm leases, only options to lease.  This is fine when the parties on each side of a transaction are equally savvy in the ways of business.  But, should this advanced business savvy be imputed to normal folks?  And with a deal so complex, were the intricacies of the deal adequately explained to the folks by their attorneys?

Permalink Reply by Rockjul on March 9, 2013 at 12:36pm

Except if the landowners counsel tells you "This is not a lease option it is a gauranteed lease" adding "As long as you sign and your title is clear you are getting paid" This is new to most of the landowners and they believed what was explained to them.

Permalink Reply by James Brink, Esq. on March 11, 2013 at 9:27pm

Ah, yes it does thicken! The mystery then becomes, who drafted the offer letter if it existed prior to the LOI? Or, perhaps, the offer letter was prepared, as part of the lease transaction package for use in gathering landowners, which occurred prior to the LOI.  Or, perhaps, a handshake deal existed prior to the formal June 2, 2012, written agreement? 

Permalink Reply by James Brink, Esq. on March 12, 2013 at 1:24am

I think you are right about that. With the amount of money riding on this deal, I am sure that a vigorous defense will be maintained.  I know the Burlson attorneys who are representing Halcon and they are no slouches.  They know what they are doing.  Let's just watch the pleadings as this litigation progresses.

Permalink Reply by Rockjul on March 26, 2013 at 11:40am

Has there been any new information on the case in Mercer?

Permalink Reply by Samuel J. Orr on May 12, 2013 at 4:15pm

Time to revive this thread !! Does anyone have anything new to report on the class action suit filed by the landowners of Mount Jackson 4 against Halcon?? I think the last thing that happened was that the Federal suit was abandoned in favor of proceeding in state court in Mercer County. Also would be interested in knowing what has happened to Terra Energy LLc"s suit against M&P??

Permalink Reply by JohnL on May 13, 2013 at 1:33am
Sam- at the CX meeting in Grove City a few weeks ago they mentioned that the suit was forced back to Federal court by Halcon. Not sure what that means or how it affects the law suit going forward or whether M&P is still part of it. Maybe someone here can look it up.

jl

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