Cross Border Resources, Inc. (XBOR)

[diy_investor]

Bobwins,

It is possible that KeyBanc believed it was entitled a transaction fee when Red Mountain Resources took a controlling interest in XBOR. Here is what was in the last XBOR 10-K:

The Company was previously party to an engagement letter, dated February 7, 2012 (the "Engagement Letter"), with KeyBanc Capital Markets Inc. ("KeyBanc") pursuant to which KeyBanc was to act as exclusive financial advisor to the Company’s Board of Directors in connection with a possible "Transaction" (as defined in the Engagement Letter). The Engagement Letter was formally terminated by the Company on August 21, 2012. The Engagement Letter provided that KeyBanc would be entitled to a fee upon consummation of a Transaction within a certain period of time following termination of the Engagement Letter. On May 16, 2013, KeyBanc delivered an invoice to the Company in the amount of $751,334, representing amounts purportedly owed by the Company to KeyBanc as a result of the consummation of a purported Transaction KeyBanc asserts had been consummated within the required time period and its out-of-pocket expenses in connection therewith. The Company disputes that any Transaction was consummated and that KeyBanc is entitled to any out-of-pocket expenses. The matter was originally filed by the Company in the 44th-B Judicial District Court for the State of Texas, Dallas County but was subsequently removed to the United States District Court for the Northern District of Texas, Dallas Division where Key Banc filed a counter claim against the Company. The Company and Key Banc have each filed motions for summary judgement, requesting the Court to rule in their respective Favors. The Company intends to vigorously defend the action.

http://www.sec.gov/Archives/edgar/data/1373485/000138713114001427/xbor-10k_123113.htm


The case was due for trial in early September. Management may have believed it was going to lose so it sought an out of court settlement.

https://www.docketalarm.com/cases/Texas_Northern_District_Court/3--13-cv-02491/Cross_Border_Resources_Inc_v._KeyBanc_Capital_Markets_Inc./