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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Replies to This Discussion

Permalink Reply by Samuel J. Orr on February 17, 2013 at 3:25pm

Steven: Pardon my ignorance. What is mandatory ADR and how what does that acronym mean and how does the process work? Thanks in advance for your help on this question!

Permalink Reply by Mike C. on February 18, 2013 at 2:40am

Alternative Dispute Resolution

 

Arbitration, Mediation, etc...

 

 

Permalink Reply by James Brink, Esq. on February 20, 2013 at 1:45pm
All cases filed in federal court are referred to either an arbitrator, mediator, or a neutral evaluator for possible settlement instead of a full trial. The Halcon case has not completed this mandatory step at this point.
Permalink Reply by Kevin Senich on February 18, 2013 at 4:31am

Did Halcon ever provide the group representatives, CX-Energy and Morasczyk & Polochak, with the LOI guaranteeing payment (save for title defects) to all members of the Mt. Jackson4 Group?  See Ex.2 to the Complaint, pp. 27, 28.  This was the precondition upon which the landowners relied in signing.  Either this written guarantee was provided and Halcon has a huge problem, or it was not provided and Halcon has no problem, but the group representatives do have the huge problem.  Which is it? 

What's the reason for CX/MP having the group members request an LOI guaranteeing payment be sent to CX/MP?  If Halcon was going to guarantee payment but for defects, the individual instruments, order of payment or lease, could have/should have said so. 

Interesting that the Order of Payment differs in plaintiffs' and defendant's versions.  I wonder how many of these leases actually were rejected for "geology"?

Permalink Reply by Samuel J. Orr on February 19, 2013 at 1:09pm

You raise a good point about "due diligence".  I can conceive of a number of things it might include such as geology or some restriction on drilling because of some state, federal, or local regulation that might effect the ability of a company to drill. If however it means that an O&G company can use the "such other due diligence as company may require" language to avoid its obligation to pay for ANY REASON OR NO REASON WHATSOEVER, that seems to me to make the "lease" or "option to lease" illusory. So is there a legal question about the meaning of the questioned language. Further, if the term has some meaning, and Halcon did nothing within that meaning during the so called due diligence period, I would think that Halcon would not be excused from paying. If on the other hand Halcon does not have to pay for "ANY REASON OR NO REASON WHATSOEVER", then M&P I would seem to be in difficulty for allowing and recommending its clients to sign "contracts' which are illusory. Further if the term "such other due diligence as company may in its sole discretion require" has some objective meaning, would Halcon in rejecting particular parcels not be required to state what it did within the meaning of those terms that would allow it to not pay bonus money on a particular parcel? I hope some of the lawyers will comment! I have just tried to frame some of the questions, perhaps rather inartfully? If unfavorable geology is the excuse would Halcon have to show that it acquired geological information after the landowners signed the leases by actually performing some additional studies during the "due diligence" period in order to avoid paying the bonus money? Many questions, some factual and some legal. I again appeal to Kevin Senich, Steven Townsend, James Brink or any others knowledgeable in the law to comment. Their prior comments have been superb contributions to the site.

Permalink Reply by james miller on February 19, 2013 at 12:23pm

We are one of the ones in mercer county that never got paid and we have a well approximately 5 miles from us but another land owner had 25 acres and he got his money in october but ther was no one else around him that got anything what are we to do

Permalink Reply by ShaleAdvice (Steven C. Townsend) on February 19, 2013 at 12:26pm
Friend me or contact us through our website ShaleAdvice.
Permalink Reply by Jesse V. on February 17, 2013 at 5:25pm

I have been following this thread for a while and this issue since late fall. I was part of a land group here in PA but dropped out before the signing because the blanket lease terms did not work for me and my land use. I ended up with the same deal with addendums specific to my land use. I have not seen anyone mention this but I think that it should be the key to all of this. The issue at hand here is that Halcon agreed to take all land in the group and was awarded the entire GROUP. They then decided after I assume an agreement had been signed between Halcon and M&P to "close the deal for the entire GROUP" that they wanted certain parts of the GROUP and the other parts were out. This is what should be at issue. This is why these landowner groups come together. Strength in numbers. M&P for whatever reason has allowed them to dismantle the group and crack the strong foundation that had been built to negotiate with leverage. If the group leaders left the door open for something like this to happen they should shoulder the blame. 

I still remember reading posts here by recruiters for CX bad mouthing every landman or company other than who they had dealings with. These is sad to see. My brother is a respected attorney in the Northern Tier of PA and has despised the influx of Oil and Gas business his office has received. He has had many clients (individual landowners and municipalities) come to him to review a lease for them. He's told me that he has always basically rewrote the lease or loaded it with addendum's and in every case advised the client not to sign any lease with any company unless it was absolutely necessary. Basically he believes that there is no protection for any landowner if the you know what hits the fan or if the gas company decides down the road that your property is the only path for their pipeline. Hust my 2 cents. I'm leased. I'm happy with my deal and hoping to be unitized before this lease runs out because I don't want to go through it all again.

Permalink Reply by Samuel J. Orr on February 19, 2013 at 5:19am

 If you want to read something perhaps even more scary, read the thread under "general discussions" about DUX Petroleum LLC.

Permalink Reply by Samuel J. Orr on February 19, 2013 at 5:37pm

In  my post of 4 hours ago about Halcon on the one hand and M&P / CX on the other in a reply to Kevin Senich, I framed some issues, perhaps inartfully, and asked some questions. I still hope that Mr. Brink, Mr. Senich, Mr. Townsend or any other competent lawyers reading this thread might post replies to the issues framed and the questions asked. The above named gentlemen have all provided very important contributions to this website.

Permalink Reply by ShaleAdvice (Steven C. Townsend) on February 20, 2013 at 1:00am

Sam,

You are spot on with your questions.  The ability to unilaterally walk away from the deal is not a promise and is not supported by consideration.  This is where the fiduciary duty comes in.  However, without seeing the "confidential" document between MP and Halcon, it is difficult to say what duty exists if any.  If MP is working as the exclusive agent of the landowner, then there should not have been nor ever be a confidential document between the agent and the buyer.  My guess is that MP struck their own deal behind the backs of there clients and have negotiated a percentage of the landowners royalty.  If this is the case, then MP would have breached their duty to their client.  Again, all of this is speculation without the documents.  There is an absolute "duty to speak" on certain terms in a contract, especially regarding what courts have considered one the most complicated contracts in American jurisprudence, when a provision is unclear, a detriment to the client, or where the person knows that there is likelihood of misunderstanding. 

On another note, I was at a function last night and another gentleman approached me knowing that we represented landowners in a number of capacities.  He too believes he represents landowners however, after speaking with this "attorney" I quickly realized that his representation was much like the MP firm.  After I explained that many of the offers, leases, ROW's that are currently being used are not favorable to the landowner he looked at me and said that he would gladly take them and sign them.  I pushed this issue a bit and realized that he was only interested in volume of clients.  It makes me sick when I hear this and when I see people being taken advantage of by these unscrupulous hacks. 

By the way, this post is again not targeted toward MP, Halcon, CX or the hack I met last night.  I am merely giving an opinion of what issues I see in the lawsuit and current issues in general. 

Permalink Reply by Daniel Rupert on February 20, 2013 at 1:42am

Mr, Townsend,

I was once told by an attorney that, "I needed to chose what side I was on"! I remember telling him that I was on the side of fairness and transparency. He laughed at me and I remember feeling extremely uncomfortable with his laughter. It was a huge red flag and I should have been fair warned accordingly...unfortunately I did not heed this warning flag and this attorney took advantage of EVERYBODY in the deal and is facing possible litigation from EVERYBODY  in the deal! UNSCRUPULOUS INDEED!!!

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