Thank you for sharing!
Guess what, folks? After eight years in Texas court, the LL&E lawsuit against Breitburn (really its successor Maverick Natural Resources, which has done well for itself and has the $ to pay) goes to pre-trial in three days. Case #201547031 in the 133rd Judicial District (Houston). It has it all: massively complex issues of law, accounting, alleged fraud and grand conspiracy. The trust's latest damage model approached ~$50 million and that was through maybe 2018 or so.
Pre - trial should be live-streamed here.
Dear Judge Jones:
I represent LL&E Royalty Trust (the “Trust”). The Trust is a general partner of LL&E Royalty Partnership (the “Partnership”), a Texas general partnership. The Trust holds 99% of the partnership interests.
Under Texas law, a general partner of a general partnership has standing to bring causes
of action on behalf of a general partnership. See Allied Chem. Co. v. DeHaven, 824 S.W.2d 257
(Tex. App. 1992). Similarly, the Trust had standing to file proofs of claim in this bankruptcy case
(and did so in October of 2016), even though, as the holder of a real property interest and/or a
secured creditor, neither the Trust nor the Partnership itself was required to file any proofs of
claim at all. See In re Fink, 366 B.R. 870 (Bankr. N.D. Ill. 2007); In re Soup Kitchen
International, Inc., 506 B.R. 29 (Bankr. E.D.N.Y. 2014); In re Mansaray-Ruffin, 530 F.3d 230 rd
(3 . Cir. 2008); In re W.S.F.–World Sports Fans, LLC, 367 B.R. 786 (Bankr. D.N.M. 2007); Merdrano Diaz v. Vazquez-Botet, 204 B.R. 842 (D.P.R. 1996). The Reorganized Debtor’s suggestion that “disallowance” of the filed proofs of claim will somehow obviate the need for further proceedings in the Texas litigation is, therefore, misguided.
In addition, to the extent any amendment of the proofs of claim is even required (which the Trust disputes), case law would instruct the Court to liberally allow a post-bar date amendment – up to and including substitution of claimants – in the circumstances presented. See, e.g., In re Unioil, Inc., 962 F.2d 988 (10th Cir. 1992). Accordingly, there is nothing to be achieved by the Court entertaining the Reorganized Debtors’ arguments.
As importantly, there is no reason for the Court to take up this issue at all at the present juncture, because the Texas litigation is still ongoing. The Reorganized Debtors invite the Court to unnecessarily insert itself into what is, at best, the early third quarter of complex, multimillion dollar Texas state-court litigation – litigation which has been going on for nearly seven years and is still far from over. The Court should decline to do so. Instead, the Court should continue to follow the prudent path it already set forth in its April 14, 2017 lift-stay decision (Docket No.
16-11390-dsj Doc 2860 Filed 05/03/22 Entered 05/03/22 12:36:13 Main Document Pg 2 of 3
Honorable David S. Jones Page 2
DICKINSON WRIGHT PLLC
1185, together with the related April 28, 2017 Order, Docket No. 1217) allowing the Texas litigation to be adjudicated to completion in the Texas courts before the parties return to this Court.
A brief history of the circumstances leading here may be helpful. On August 12, 2015,
the Reorganized Debtors’ predecessor in interest, QRE Operating LLC (“QRE”), sued the Trust
in the Texas courts for a declaratory judgment regarding QRE and the Trust’s respective rights
pursuant to a 1983 conveyance (the “Conveyance”) of oil and gas interests (“Overriding
Royalties”) in an oil and gas field in Florida and Alabama known as the “Jay Field”. QRE did
not sue the Partnership. Rather, QRE treated the Trust itself as the proper party to the
Conveyance. On February 19, 2016, the Trust counterclaimed against QRE for breach of the
On May 15, 2016, QRE and its affiliates (the “Debtors”) filed for chapter 11 in this Court. The Debtors scheduled the Trust as a creditor. They did not schedule the Partnership.
On October 14, 2016, solely out of an abundance of caution, the Trust filed a proof of claim against QRE (and duplicate proofs of claim against three other Debtors). The Trust did so expecting that its2 claims would be litigated in the Texas courts and not through the claim objection process.
In April of 2017, after carefully considering extensive stay relief briefing and oral argument, and after careful consideration of the Sonnax factors, the Court lifted the stay to allow the Texas litigation to continue, specifically stating, “[S]tay relief is granted to allow the Texas courts to determine the parties’ rights under the Conveyance Agreement, and in particular, whether and to what extent LL&E owns or holds a beneficial or other interest in the [Overriding Royalties], or alternatively, is an unsecured creditor[.]” Docket No. 1185, p. 16 (emphasis added).
The Debtors later served a contract rejection notice (Docket No. 1914) on the Trust purporting to reject the Conveyance as an “executory contract” between the Debtors and the Trust. They did not list nor serve the Partnership. The Trust filed an objection (Docket No. 2036), which was subsequently resolved by inclusion of the following agreed language in the Order Confirming the Debtors’ Plan of Reorganization:
1 The Trust later impleaded ConocoPhillips Company, the 1% general partner of the Partnership, as a third-party defendant so that both general partners of the Partnership are parties to the Texas litigation.
2 Consistent with this expectation, to date, neither the Debtors nor Reorganized Debtors have ever filed a substantive objection to the proofs of claim. Rather, on December 3, 2018, the Reorganized Debtors filed a mere “placeholder” objection (Docket No. 2624) in order to comply with the claims objection deadline while the Texas litigation continued. The objection does not assert that the Trust is an improper party to have filed the proofs of claim.
ARIZONA CALIFORNIA FLORIDA KENTUCKY MICHIGAN
NEVADA OHIO TENNESSEE TEXAS TORONTO WASHINGTON DC
16-11390-dsj Doc 2860 Filed 05/03/22 Entered 05/03/22 12:36:13 Main Document Pg 3 of 3
Honorable David S. Jones Page 3
DICKINSON WRIGHT PLLC
The disposition of whether the Debtors’ agreement with LL&E Royalty Trust (the Conveyance of Overriding Royalty Interest) is subject to rejection under section 365 of the Bankruptcy Code shall be deferred, with the rights of all parties reserved, pending a determination of the issues to be adjudicated in the Texas Court[.] [Docket No. 2387, p. 21 (emphasis added)].
The Texas litigation has not been adjudicated to completion – even at the trial court level. In fact, just this past Friday the trial court re-set trial to October 17, 2022.
The Texas Court of Appeals’ mandamus decision, issued April 19, 2022, which is referred to in the Reorganized Debtors letter, relates to a specific interlocutory trial court order requiring the Reorganized Debtors to deposit certain disputed funds with the trial court. The Texas Court of Appeals based its mandamus decision on a finding that the Trust had not adequately pled claims on behalf of the Partnership. However, in the interim, the Trust amended its counterclaims by right in the trial court to more clearly identify that it was asserting claims on behalf of the Partnership. Importantly, the Reorganized Debtors moved for summary judgment on their “real party in interest” argument in the trial court based on these amended counterclaims, and the trial court denied that motion from the bench on April 4, 2022. Moreover, the trial court’s recent re-setting of the trial date – post-mandamus decision – makes it clear that the trial court still views the Trust as having sufficient standing to bring the claims to trial based on the
Because the Texas litigation is still ongoing, the Trust respectfully requests that the Court simply maintain the same prudent path it established in 2017 when it determined to allow the Texas Courts to adjudicate the rights of the parties. However, if the Court determines to take up the issues raised by the Reorganized Debtors now, the Trust respectfully requests that the Court set a full briefing schedule for the Trust to fully present its positions.
amended counterclaims that were not before the Court of Appeals on mandamus review.
Cc: Counsel to Reorganized Debtors
Very truly yours,
/s/ Doron Yitzchaki
3 By separate order, on May 20, 2021, the Texas trial court determined that the Trust, as a general partner of the Partnership, was entitled to a temporary injunction against the Reorganized Debtors because the “Partnership’s overriding royalty interest in the Conveyance is a real property interest,” that the Reorganized Debtors “holds any unpaid overriding royalties in trust for [the Trust],” and that the “Partnership is at the very least a secured creditor as to its accrued but unpaid overriding royalties and therefore enjoys a superior right to the funds in the Account attributable to its accrued but unpaid overriding royalties.” The Reorganized Debtors appealed the injunction, and the appeal remains pending.
Transcript regarding Hearing Held on 05/04/2022 At 11:00 AM RE: Status Conference RE: Debtors Objection To Claims (Prepetition Litigation Claims-LL&E). Remote electronic access to the transcript is restricted until 8/9/2022. The transcript may be viewed at the Bankruptcy Court Clerks Office. (Transcription Service Agency: Veritext Legal Solutions.). (See the Courts Website for contact information for the Transcription Service Agency.). Notice of Intent to Request Redaction Deadline Due By 5/18/2022. Statement of Redaction Request Due By 6/1/2022. Redacted Transcript Submission Due By 6/13/2022. Transcript access will be restricted through 8/9/2022. (No Underlying Document)
Every 6 months I check in on LL&E. It looks like May 17th is the next date. But if the pattern persists the court will push it out again.
Any predictions for how this ends?
Beneficial Owners of more than 5% of the outstanding Units
Jeffrey R. Beckett
Barry T. Brooks
Trellus Management Company, LLC
Formation of the Trust (Final 10-Q for 9/30/11)
On June 28, 1983, The Louisiana Land and Exploration Company (herein Working Interest Owner or Company) created LL&E Royalty Trust (Trust) and distributed Units of Beneficial Interest (Units) in the Trust to the holders of record of capital stock of the Company on the basis of one Unit for each two shares of capital stock held on June 22, 1983. On October 22, 1997, the shareholders of the Company approved a definitive agreement to merge with Burlington Resources Inc. (BR). Effective on that date, the Company became a wholly owned subsidiary of BR. The merger has had no significant effects on the Trust. On March 31, 2006, ConocoPhillips acquired BR via merger into Cello Acquisition Corp., a wholly owned subsidiary of ConocoPhillips. The surviving entity of the merger was Cello Acquisition Corp., which changed its name to Burlington Resources Inc. (New BR) Consequently, New BR (including the Company) is a wholly owned subsidiary of ConocoPhillips. The merger has had no significant effects on the Trust. In December 2006, the Company, as working interest owner, and ExxonMobil, as the operator of the Jay Field, sold their respective interests in the Jay Field properties located in Florida and Alabama to Quantum Resource Management LLC (“Quantum”). Quantum began operating the Jay Field properties in April 2007. As used in this report, the terms “Working Interest Owner” and “Working Interest Owners” refer to The Louisiana Land and Exploration Company for the South Pass 89 and Offshore Louisiana properties and, after its December 2006 acquisition of the Jay Field interest, Quantum, for the Jay Field properties.
Upon creation of the Trust, the Company conveyed to the Trust (a) net overriding royalty interests (Overriding Royalties), which are equivalent to net profits interests, in certain productive oil and gas properties located in Alabama, Florida and in federal waters offshore Louisiana (Productive Properties) and (b) 3 percent royalty interests (Fee Lands Royalties) in approximately 400,000 acres of the Company’s then unleased, undeveloped south Louisiana fee lands (Fee Lands). The Overriding Royalties and the Fee Lands Royalties are referred to collectively as the “Royalties.” Title to the Royalties is held by a partnership (Partnership) of which the Trust and the Company are the only partners, holding 99 percent and 1 percent interests, respectively.
The Trust is passive, with The Bank of New York Mellon Trust Company, N.A., (the Trustee), having only such powers as are necessary for the collection and distribution of revenues resulting from the Royalties, the payment of Trust liabilities and the conservation and protection of the Trust estate. The Units are traded over the counter under the symbol LRTR.
The accompanying financial statements should be read in conjunction with the Trust’s Annual Report on Form 10-K for the year ended December 31, 2010.
Termination of the Trust and Recent Developments
The Trust Agreement provides that the Trust will terminate in the event that the net revenues fall below $5,000,000 for two successive years (the “Termination Threshold”). Net revenues are calculated as royalty revenues after administrative expenses of the Trust and as if the Trust had received its pro rata portion of any amounts being withheld by the Working Interest Owners or the Partnership under escrow arrangements or to make refund payments pursuant to the Conveyances (the Trust’s pro rata portion of escrowed amounts relating to the future dismantlement of platforms are included in the net revenue calculation for this purpose).
Net revenues to the Trust for the years ended December 31, 2007 and 2006 calculated as described above, were approximately $1,600,000 and $2,100,000, respectively. Consequently, the Trust is required to terminate and is required to sell the assets of the Trust for cash by means of a public auction. After paying or making provision for all actual and contingent liabilities of the Trust, including fees of the Trustee, the Trustee will distribute any remaining cash as promptly as practicable. Despite the termination of the Trust, the Trustee is continuing to act as Trustee for purposes of liquidating and winding up the affairs of the Trust. The Trustee does not expect to make any further monthly distributions to Unit holders in the interim period prior to any distribution resulting from the sale of the Trust’s assets. See “Management’s Discussion and Analysis.”
The Trustee has retained Stifel, Nicolaus & Company, Incorporated (“Stifel Nicolaus”), a nationally recognized investment banking firm, to market the Trust’s assets. However, as announced by the Trustee on October 22, 2008, the Trustee previously determined that, in light of market conditions at that time, it was in the best interests of the Trust unit holders to postpone the sale of the Trust’s assets for an indefinite period of time. The Trustee recommenced the marketing efforts in 2010. The Financial Advisor marketed the Trust’s assets and had received preliminary indications of interest in late 2010, and the Trustee intended to sell the assets in accordance with the terms of the Trust Agreement. However, as previously announced, in November 2010 the Trust and Trustee were named as defendants in a Complaint for Legal and Equitable Relief (the “Complaint”) filed by Jeff Beckett in the United States District Court for the Eastern District of Michigan. Mr. Beckett’s Complaint seeks a judicial modification of the terms of the Trust Agreement governing the Trust, a judgment declaring that the termination provisions of the Trust Agreement do not apply and an order preventing the sale of the Trust’s assets. The Complaint also makes a number of other allegations and seeks removal of the Trustee and other relief.
As a result of the Beckett lawsuit, certain of the bidders who had submitted preliminary indications of interest in purchasing the Trust’s remaining assets indicated that they were unwilling to proceed with the purchase of the Jay Field interest from the Trust until the Beckett lawsuit was resolved. Consequently, as previously disclosed in the Trust’s public filings, the Trustee suspended the sale process pending a resolution of the lawsuit. On March 4, 2011 the Court entered a stipulated order in which the Trust voluntarily agreed that the Trust would not sell any assets of the Trust until at least such time as the Court entered an order dismissing or transferring the case or preliminarily enjoining the sale of the assets. The Trustee filed a Motion to Dismiss for Failure to Join Required Parties, or, in the Alternative, to Transfer Venue with the Court seeking dismissal of the suit and/or transfer of the suit to the United States District Court for the Western District of Texas.
On July 7, 2011, Mr. Beckett and the Trust entered into a settlement agreement pursuant to which Mr. Beckett agreed to dismiss his lawsuit with prejudice within ten days after the Trust held a meeting of the Unitholders for the purpose of appointing Premier Bank & Trust, National Association, as successor trustee, provided that notice of the Meeting was mailed by August 1, 2011 and the Meeting occurred by September 1, 2011. The notice of the meeting to appoint Premier was mailed by August 1, 2011 and the meeting to appoint Premier occurred by September 1, 2011. However, Premier refused to accept its appointment, and Mr. Beckett has asserted that the settlement agreement did not require him to dismiss his lawsuit.
Although the Trustee believes that the settlement agreement clearly required the dismissal of the Beckett lawsuit, the Trustee has called a second meeting of the Unitholders for the purpose of voting on a proposal by Mr. Beckett to appoint James E. Barlett as successor trustee. In connection with the calling of the second meeting, Mr. Beckett dismissed his lawsuit with prejudice.
The Trust Agreement provides that if any asset required to be sold has not been sold by December 31, 2010, the Trustee is to cause the asset to be sold at public auction to the highest cash bidder. Consequently, unless replaced or otherwise prevented from doing so, the Trustee intends to auction the remaining Trust assets in accordance with the Trust Agreement. The Trustee will mail notice of any public auction to all Unit holders at least 30 days prior to any such auction in accordance with the Trust Agreement. No approval of the Unit holders will be required in connection with the sale of the Trust’s assets.
As of September 30, 2011, the Trust had $10,968 in cash (all of which had been advanced to the Trust by Bank of New York (BNY) Mellon, as described below) and was holding unpaid invoices for administrative services totaling approximately $436,399. In addition, BNY Mellon, an affiliate of the Trustee, has made interest-free advances to enable the Trust to pay administrative expenses. As of September 30, 2011, the total amount advanced to the Trust (the “Bank Advance”) by BNY Mellon was $2,379,347. Based on current general and administrative expenditures, in the absence of Royalty Revenues, the Trustee expects that the Trust will be required to borrow money in accordance with the Trust Agreement to fund future Trust expenses. However, no assurance can be given that the Trust will be able to borrow money on terms the Trustee considers reasonable or at all. The Trust Agreement permits, but does not require, The Bank of New York Mellon Trust Company, N.A. or an affiliate to lend funds to the Trust. The Trust Agreement prohibits the Trust from making any distributions to unitholders until all loans are repaid in full.
As of November 10, 2011, the Trust had no cash except for the cash advanced to the Trust by BNY Mellon, as affiliate of the Trustee, as an interest-free advance to enable the Trust to pay administrative expenses. As of November 10, 2011, the total amount advanced to the Trust (the “Bank Advance”) by the Bank was $2,582,294, of which $8,769 remained available to pay expenses at November 10, 2011. However, at November 10, 2011, in addition to the amount owed to the Bank, the Trust was also holding unpaid invoices for administrative services totaling $619,153. See Management’s Discussion and Analysis. The entire amount of the Bank Advance and all other liabilities and expenses of the Trust must be repaid before any distribution can be made to Unit holders.
For the first nine months of 2011, the Trust did not receive any royalty revenue. Excess production costs must be recovered by the Working Interest Owners before any distribution of royalty revenues will be made to the Trust. During the first nine months of 2010, the Trust did not receive any royalty revenue except for $50 of royalty revenue from the Fee Lands property.
Letter to the Honorable David S. Jones Requesting an Adjournment Filed by Christopher Marcus on behalf of Breitburn Energy Partners LP, et al. (11/23/21)
I wonder the same thing. If there is a future that would be great. Otherwise, I have some capital gains that I was thinking about writing off.
I don't what to write the shares off as worthless if there not. But it's been awhile since we've had an news. Anyone have any thoughts/news?
Thanks so much. Is there any chance of any recovery here down the road? It seems like no remaining litigation that LL&E is a plaintiff on right?
The case was filed prior to the Breitburn Energy Partners LP bankruptcy.
QRE filed the Texas Litigation against LL&E in Harris County Texas (Case No. 2015-47031) on 8/12/15. I have been unable to gain access to any filings.
Additional information is provided in the information box.
Could you point me to which case you are talking about? I don't see that in the docket. Thanks!
The Texas Litigation currently is set for trial in Texas state court beginning 3/04/19.
The Breitburn Debtors have examined the LL&E Claims and have determined that they are based on and related to the Texas Litigation.
The Confirmation Order includes the following provision:
The disposition of whether the Debtors’ agreement with LL&E Royalty Trust (the Conveyance of Overriding Royalty Interests) is subject to rejection under section 365 of the Bankruptcy Code shall be deferred, with the rights of all parties reserved, pending a determination of the issues to be adjudicated in the Texas Court as defined in, and as set forth in, the [Lift Stay Order]. Nothing shall preclude the parties from seeking any relief in the Bankruptcy Court that is not inconsistent with the Lift Stay Order.
Each of the LL&E Claims was either (i) filed by LL&E based on claims asserted in the Texas Litigation, or (ii) filed by The Bank of New York Mellon Trust Company, N.A., as former trustee of LL&E., to preserve its asserted right of contribution against certain of the Debtors in connection with the Texas Litigation. To prevent the possible deemed allowance of the LL&E Claims, and in accordance with the deadline to object to proofs of claim, the Debtors file this Objection to the LL&E Claims to reserve and preserve their rights pending the adjudication of the matters to be adjudicated in the Texas Litigation in accordance with the Lift Stay Order and to reserve and preserve their rights as to further proceedings in the Bankruptcy Court with respect to the LL&E Claims.
However, the Conveyance, which by its terms is governed by Texas law, does not constitute an executory contract or unexpired lease for purposes of Section 365 of the Bankruptcy Code. Rather, the Conveyance is a conveyance of real property under Texas law, and is therefore not subject to assumption, rejection, or cure.
Additional information was in the process of being provided, but a trip to the ER prevented me from completing the update. Sorry.
I’m much better now.
More to follow...
Motion for Objection to Claim(s) / Reorganized Debtors Objection to Claims (Prepetition Litigation Claims LL&E) filed by Stephen Karotkin on behalf of Breitburn Energy Partners LP, et al., with hearing to be held on 1/31/2019 at 10:00 AM at Courtroom 723 (SMB) Responses due by 1/24/2019 (12/03/18)
Source: Prime Clerk [Docket 2624]
[From the Department of Corrections]
Breitburn Energy Partners LP, et al
U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Bankruptcy Petition #: 16-11390
LL&E is a creditor in the case and filed a claim.
That's the one
U.S. Bankruptcy Court
Southern District of New York (Manhattan)
Bankruptcy Petition #: 16-11390
US Bankruptcy court southern district of New York. Regarding Breitburn. If you google search "LL&E Royalty trust BBEP" it's the forth one down as a PDF.
The original case has been closed since 2015.
Can you please provide some additional information like the court?
I paid an average of $.93 in the first half of 2015.
My plan was to buy more LRTR as the litigation continued, but the SEC revoked its registration.
Thank you, Enterprising! I only own 200 shares. Worth it? Hmm.
Someone reports that the case is active again.
I will need to research.
I recently learned that brokerage firms will not transfer out “worthless” securities. As a result, I’m in the same boat with one account
Although unlikely, sometimes value shows up years later due to a lawsuit. LRTR was involved in one, but the case later faded away.
If you own a small position, it might be worth having the firm write it off.
Question: I inherited some shares of this thing and can't get any information about the likelihood of it ever being worth anything.
I'm trying to transfer the entire account to another brokerage firm, but they're telling me I need to sign a worthless security/insignificant value form to dispose of this before the transfer can take place. Advice? If I keep it, it keeps this account open and that will cost me account servicing fees.
What are the chances it will ever be worth anything: does someone involved still own an oil field or something? Thanks, Anne
Wild situation to be sure. Best to all involved.
In addition, no new lawsuit has been filed. I reviewed PACER yesterday.
Interesting situation. Before investing significant time understanding it - it looks like there is no way in or out of these shares. Is that correct?
No new complaint filed as of this date (9/25/15)
Truly expected that the amended complaint would be filed before the deadline.
However, there might have been a work product issue once a new firm was retained. It might be better to just start over.
I own a few shares of this EI. Hope all is well with you.
Have any ideas on what is going on with his. Haven't been able to keep up with my investments lately.
Order for Plaintiff(s) to Show Cause Why This Case Should Not be Dismissed for Failure to Prosecute (Amended Complaint was due 8/14/15). Show Cause Response due by 9/2/2015. Signed by District Judge George Caram Steeh (8/19/15)
Source: PACER [Docket 43]
Consent Order granting substitution of attorney Craig T. Mierzwa in place of Attorney David E. Plunkett. Signed by District Judge George Caram Steeh (8/12/15)
Source: PACER [Docket 40]
Simon PLC replaces Williams, Williams, Rattner & Plunkett PC.
From the Department of Corrections: