Texas Pacific Land Trust Forms Conversion Exploration Committee to Consider C-Corp Conversion
June 24 2019 - 7:00AM
Business Wire
Texas Pacific Land Trust (NYSE: TPL) (the “Trust”) today
announced the formation of a Conversion Exploration Committee to
evaluate a conversion of the Trust into a C-corporation.
The Conversion Exploration Committee will evaluate, from a
corporate, corporate governance, tax, accounting and business
perspective, whether the Trust should be converted into a C-corp
or, in the alternative, whether the Trust should remain a business
trust (with potential amendments to the declaration of trust). The
Conversion Exploration Committee will begin its work this week.
While the process is expected to take several months, the
Conversion Exploration Committee will make a recommendation to the
Trust as soon as practicable.
The members of the Conversion Exploration Committee are:
- John R. Norris III, incumbent Trustee
- David E. Barry, incumbent Trustee
- Four-Star General Donald Cook, USAF (Ret.)
- Dana McGinnis, Founder and Chief Investment Officer of Mission
Advisors, one of the Trust’s largest shareholders
The Trust also invites Horizon Kinetics to designate a person of
its choosing as the fifth member of the Conversion Exploration
Committee.
“The silver lining of a long and hard-fought proxy contest is
that we have had the opportunity to hear thoughts from many of our
shareholders about the Trust,” said Mr. Barry. “A C-corp conversion
would be a dramatic departure from the governance structure that
has governed the Trust for over 130 years, and this is nothing we
would ever undertake lightly. After all, the Trust outperformed 99%
of the companies listed on the New York Stock Exchange in the past
5 years prior to the proxy contest. The Trustees have previously
considered the issue on various occasions, and thus far have
determined that conversion was not the best path forward. However,
we recognize that the marketplace has changed, and as the Trust has
changed with it, it is time to reconsider the possibility of
adopting a new corporate structure.
“We are particularly pleased to have the participation in this
review of both Dana McGinnis, an experienced investor with deep
familiarity with the Trust, and General Don Cook, our trustee
nominee, a corporate governance expert who publicly committed
during the proxy contest to carefully evaluate potential governance
changes, including a C-corp conversion. Notwithstanding the proxy
contest and pending litigation, we have also invited Horizon
Kinetics, as a large shareholder, to designate the fifth member of
the Conversion Exploration Committee. We believe it is time for all
of us to come together, put aside our differences, and determine
the best way forward for the Trust and all of its shareholders. We
promise that whatever our next act is, we will carry it out in a
thoughtful and deliberate fashion, in strict accordance with our
fiduciary duties, to ensure that the value of the Trust is
protected for all shareholders.”
The Trust will file the charter of the Conversion Exploration
Committee on a Form 8-K with the Securities and Exchange
Commission.
Stifel is serving as financial advisor to the Trust and Sidley
Austin LLP is serving as legal advisor to the Trust.
Litigation and Proxy Solicitation Update
The Trust notes that, notwithstanding the formation of the
Conversion Exploration Committee, the Trust’s litigation in the
United States District Court for the Northern District of Texas
against Eric Oliver, Horizon Kinetics and certain other members of
their group remains pending. In its complaint, the Trust seeks,
among other things, an order to compel Mr. Oliver to issue
corrective disclosure and a judgment to enjoin Mr. Oliver from
running for election as a trustee until 60 days after he provides
full and accurate disclosures and is thereafter found by the
Trustees not to be disqualified from serving as a trustee. The
proxy solicitation for election of a third trustee remains
suspended until the foregoing litigation is resolved, and proxies
are not being accepted at this time. Notwithstanding the foregoing,
shareholders may revoke any previously-submitted proxies at any
time by delivering a written notice, stating that their proxy is
revoked, to the Secretary of Texas Pacific Land Trust, 1700 Pacific
Avenue, Suite 2770, Dallas, TX 75201.
Forward-Looking Statements
This release may contain statements that are “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements contained in this release,
other than statements of historical fact, are “forward-looking
statements” for purposes of these provisions, including statements
regarding Texas Pacific’s future operations and prospects, the
markets for real estate in the areas in which Texas Pacific owns
real estate, applicable zoning regulations, the markets for oil and
gas, production limits on prorated oil and gas wells authorized by
the Railroad Commission of Texas, expected competitions,
management’s intent, beliefs or current expectations with respect
to Texas Pacific’s future financial performance and other matters.
Texas Pacific cautions readers that various factors could cause its
actual financial and operational results to differ materially from
those indicated by forward-looking statements made from
time-to-time in news releases, reports, proxy statements and other
written communications, as well as oral statements made from time
to time by representatives of Texas Pacific. The following factors,
as well as any other cautionary language included in this release,
provide examples of risks, uncertainties and events beyond our
control that may cause Texas Pacific’s actual results to differ
materially from the expectations Texas Pacific describes in such
forward-looking statements: global economic conditions; market
prices of oil and gas; the demand for water services by operators
in the Permian Basin; the impact of government regulation; the
impact of competition; the continued service of key management
personnel; and other risks and uncertainties disclosed in Texas
Pacific’s annual reports on Form 10-K and quarterly reports on Form
10-Q. We undertake no obligation to update publicly or otherwise
revise any forward-looking statements, whether as a result of new
information, future events or other factors that affect the subject
of these statements, except where we are expressly required to do
so by law.
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Media: Abernathy MacGregor Sydney Isaacs / Jeremy Jacobs
(713) 343-0427 / (212) 371-5999 sri@abmac.com / jrj@abmac.com
Investor Relations: MacKenzie Partners Paul Schulman /
David Whissel (212) 929-5500 or (800) 322-2885
pschulman@mackenziepartners.com
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