Firm name Delek US Energy
Type of firm Public Company
Broker, Advisor, or Salesperson
Street address 7102 Commerce Way
Address (cont.)
City Brentwood
State/Province Tennessee
Zip/Postal code 37027
Country United States
Tell Us About Your Investment
Type of security Limited Parterships
Security symbol ALDW
Name of
Issuer or
Security
Below is the information I submitted in the "Tell Us About Your Complaint" area. I'm not sure it's completely accurate but it is as accurate as I understand the situation.
On Nov. 8th, 2017 Delek US (DK) announced it would be merging outstanding units of Alon Energy Partners (ALDW) into DK in an all stock arrangement of 1 unit of ALDW = 0.49 shares of DK. ALDW is a MLP which is a pass-through organization for taxes as well as profits through quarterly distributions for the limited partner unit holders. I was a limited partner unit holder in ALDW.
The intended merger announcement was coupled with 3rd quarter results and distribution announcement from ALDW on 11/8/17. ALDW had a very successful 3rd quarter and announced a somewhat mediocre distribution of $0.43/unit on 11/8/17.
The merger of Delek and ALDW closed on Feb. 7th, 2018.
After the Q3 distribution, there have been no further distributions from ALDW for Q4 and the partial quarter from Jan 1, 2018 until Feb. 7th, 2018.
On March 5th, 2018 I placed a call to Keith Johnson (DK investor relations 615-435-1366) to inquire about ALDW distributions for Q4 2017 and partial Q1 2018. He mentioned there would be no distributions for former ALDW holders.
I feel this in violation of the MLP law passed in 1986. While the limited partner unit holders in a MLP are tasked to shoulder the tax burden, we are also entitled to 90% of the earnings…which were never reported for the final 4 months of ALDW operation.
At the time of the merger close, I held 12,510 units of ALDW and received no distributions for Q4 2017 and partial Q1 2018 previous to the close of the merger (Oct. 1, 2017 through Feb. 7th, 2018). As limited unit partner, I am entitled to these funds.
It is my view that Delek US is in violation of SEC law in denying unit holders of ALDW distributions for Q4 2017 and partial Q1 2018. Please see below:
Rights of Holders of MLP Public Units. Each MLP Public Unit, upon being converted into the right to receive the Merger Consideration pursuant to this Section 2.1(c), shall cease to be outstanding and shall be canceled and retired and shall cease to exist, and each Holder of such MLP Public Units immediately prior to the Effective Time shall thereafter cease to be a limited partner of MLP or have any rights with respect to such MLP Public Units, except the right to receive the Merger Consideration and any distributions to which former Holders of MLP Public Units become entitled all in accordance with this Article II upon the Surrender of (A) a certificate that immediately prior to the Effective Time represented MLP Public Units (an “MLP Certificate”) or (B) uncertificated MLP Public Units represented by book-entry (“Book-Entry MLP Common Units”), together with such properly completed and duly executed Letter of Transmittal and such other documents in accordance with Section 2.2.
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