Wednesday, BreitBurn Energy Partners L.P. (BBEP), an independent oil and gas limited partnership, in response to a press release issued Tuesday by Quicksilver Resources Inc. (KWK), said that the Court order referred to by Quicksilver is a partial decision and not all of the issues related to the election of directors have been resolved.
BreitBurn said Quicksilver's release indicates that the Court has made a final ruling on the Quicksilver lawsuit, that a BreitBurn annual meeting must be held within 120 days, and that at that meeting Quicksilver would be entitled to vote all of its units in the election of directors. None of these assertions are true, BreitBurn noted.
BreitBurn said the Court's order referred to by Quicksilver is not final or complete and the trial on these and all other outstanding issues remains scheduled for April 2010.
An annual meeting for the purpose of electing directors cannot be held until the issues concerning the election of directors and the proper procedures and safeguards adopted by the board are finally resolved.
In the interim, the current board, composed of a majority of non-management, independent directors, will continue to serve as directors of BreitBurn, the company said.
In June of 2008, BreitBurn amended its partnership agreement and granted a new right for all of the limited partners to elect the members of its board of directors. Prior to that time, the limited partners had no voice in the choice of directors.
In order to provide all limited partners with a meaningful right to vote in the election of directors and not give working control of the partnership to a single limited partner, the election provision limited the voting power of any single limited partner to 20%. Through its lawsuit, Quicksilver is attempting to remove these important limited partner protections, BreitBurn said.
Texas-based Quicksilver Resources, a limited partner in BreitBurn Energy Partners, filed a lawsuit in Fort Worth against the company on October 2008 to gain working control of the partnership.
On November 24, Quicksilver in its press release said that the 48th District Court in Tarrant County, Texas granted Quicksilver's motion for partial summary judgment and denied the same filed by BreitBurn Energy.
Quicksilver had brought suit against BreitBurn and others claiming, among other things, that the BreitBurn Defendants had improperly adopted unilateral changes to the Limited Partnership Agreement which attempted to limit Quicksilver's right to vote for BreitBurn GP, LLC's Board of Directors.
Quicksilver said specifically that BreitBurn attempted to place a cap which prevented unitholders from voting their units in excess of 20% of outstanding units even if the unitholders owned a greater percentage. Quicksilver owns about 21.35 million units, representing approximately 40% of the total outstanding units, and is the only unitholder with greater than 20% ownership in the partnership.
BBEP closed Wednesday's regular trading session at $11.31.
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