The complaint form presented by the Texas Securities Board requires what they call a summary of the protester's complaint. Follow is an exact duplicate of what I've now submitted. Use it as you will. Naturally I'll keep everyone apprised of any developments forthcoming.
Throughout my four years of involvement with ALDW it was common practice for that company to issue guidance on a quarterly basis so as to equip partners with important information by which to manage his/her investment. Quarters 4 and 1 (of 2018) are the only times when such information was not directed to unitholders. Delek assumed control over all matters connected to Alon Partners.
Hurricane Harvey proved devastating for area refiners. In its most recent SEC filing, DK admits that ALDW refining assets contributed massively to Delek's bottom line improvement amounting to a 129% improvement. Higher commodity prices and improved crack spread also contributed to the overall increased valuation. Delek has made it known that ALDW assets were not impaired as a result of the storm affecting other area refiners. It is for this reason that the media and analysts covering commodities formed a consensus leading to greatly improved distribution expectations.
At the time of announcement of the intended merger between Delek US and Alon US, it was stipulated that upon completion of the merger, ALDW unitholders would receive 0 ,49% of a DK share for two ALDW units. ALDW unitholders holding onto their positions had to have done so for the sake of pending distributions. When the (roughly) two-for-one conversion was announced, stock of both companies proceeded to move in lock-step with one another and there could be no advantage in owning ALDW other than for the lure of the distributions.
There were a number of larger institutional investors dating back to October and running through to the end of 2017 which added to preexisting positions. It would not make sense for them to enter the combined entity consisting of ALDW and DK were it not for the opportunity to capture ALDW distributions. It is my belief that there were back-room discussions occurring between certain institutional investors in a laundering scheme designed to defraud the retail investor.
Keith Johnson, Delek's Vice President of Investor Relations, failed to follow up on my phone calls to his office prior to my finally being able to find him answering his phone. When I asked about the distributions in question, he told me there would be no further distributions. Asking how this could be the case, he reminded me that Delek is now in charge of all things formerly under the purview of ALDW. He added that this became the fact as of February 7th when the merger was officially declared finalized. I told him that this signing occurred well after the dates of coverage under our discussion. He said nothing more.
I then told him I believed it unlawful to blend assets or to back-date things so as to have them appear to be covered by the 2/7/18 signing. He said he'd have "legal" contact me about that. I've not heard back and doubt I will.
MLPs are required to distribute 90% or more of their gains to unitholders who are then taxed appropriately. I can only wonder if any tax on the massive gains incurred by Delek is even scheduled for recognition.
Finally, it seems to me that Delek has willfully chosen to disregard any and all obligations due (former) ALDW unitholders. For this reason I ask for your help in bringing this situation out into the open.
___________________________________________________
pete807, speaking out strongly in support of a person's belief system is never to become an object to be addressed as a rant. Rants typically are excursions away from reasonable assertions.
You, my wonderful friend, have hardly drifted away from a very important subject now under discussion on this board and, I'm sure, in our respective homes. Your position holds that we unitholders in what was formerly ALDW have been wronged as I'm sure we have, too. It is to be expected that we are justifiably angry. And certainly you've been right all along in expecting DK would pull this stunt.
Most investors probably would not squawk. There's an old saying about bending over. I'm thinking DK operatives had to have assumed we'd bend over with a smile on our cheeks. I'm not saying which set of cheeks. Now that DK's dastardly deed has been done, it is logical to assume management knew exactly how this would likely go down. And it may, indeed, unless enough of us band together and do all in our power to register our complaints. If we don't follow through on this, big business will continue to get away with devouring our money, our prosperity, our legal entitlements. Worst of all, I feel, is that we put ourselves on the line, taking chances as we have and while we survived handily, the fact remains that DK is engaged in a feeding frenzy hoping to devour us still further.
