Preview
EXHIBIT5/12/2021 2:16:12 PM
Marilyn Burgess - District Clerk
Harris County
Envelope No: 53372773
By: HODGINS, KEELEY M
Filed: 5/12/2021 2:16:12 PM
CAUSE NO. 2015-47031
QRE OPERATING, LLC § IN THE DISTRICT COURT OF
§
Plaintiff, §
§
vs. § HARRIS COUNTY, TEXAS
§
ROGER D. PARSONS, IN HIS §
CAPACITY AS TRUSTEE OF THE §
LL&E ROYALTY TRUST §
§
Defendant. § 133" JUDICIAL DISTRICT
TEMPORARY INJUNCTION
Defendant ROGER D. PARSONS, solely in his capacity as trustee of the LL&E
ROYALTY TRUST (“Parsons” or the “LL&E Trust”), as a general partner in the LL&E Royalty
Partnership, filed an application for an order compelling deposit of the account identified by the
parties as Wells Fargo Securities, NA Money Market Account number ******82 (the “Account”)
into the Court’s registry or, alternatively, for a Temporary Injunction to preserve the status quo by
prohibiting Breitburn Operating, LP (as putative successor to Third-party defendants QRE
Operating, LLC, Breitburn Energy Partners, LP, and QR Energy, LP), Breitburn Management
LLC, and Maverick Natural Resources, LLC, their officers, agents, servants, employees, and
attorneys, and all those in active concert or participation with them (collectively, “BBOP”) from
further liquidating or drawing down the Account after reducing the Account’s balance to $13.4
million following the April 29, 2021 Temporary Restraining & Show Cause Order entered in this
civil action
Parsons has alleged a breach of contract claim against BBOP, and Parsons is defending
against BBOP’s claim for declaratory relief on the same issue.
-l-
Pgs-5
TINIX
ORTXUpon a hearing held online via Zoom beginning at 4:30 p.m on May 12, 2021, and attended
by counsel for Parsons and BBOP, Parsons set forth his claim and offered evidence that at least
$13,356,193 of the Account belongs to Parsons through the LL&E Partnership. He further alleges
and offered evidence that liquidating of the Account will cause immediate and irreparable harm
and injury to the LL&E Trust through the LL&E Partnership. Parsons set forth his allegations and
offered evidence that a claim for money damages against BBOP will not be as complete, practical,
and efficient to the ends of justice and its prompt administration as is equitable relief, and further
that BBOP should not be permitted to dissipate the funds in the Account before the LL&E Trust’s
claims are resolved.
The Court finds that Parsons has established a probable right to relief on his claims against
BBOP for breach of BBOP’s duty to make monthly overriding royalty payments (calculated net
of certain expenses) as required by the Jay Field Conveyances. In particular, the Court finds that
Parsons has established a probable right that $13,356,193 of the funds in the Account represent
accrued but unpaid royalties that Parsons is entitled to receive under the Conveyances.
The Court further finds that Parsons will suffer probable, imminent, and irreparable injury
if this Court does not issue a temporary injunction in Parsons’ favor as trustee of the LL&E Trust
and thus general partner in the LL&E Royalty Partnership. In particular, the Court finds that: (i)
BBOP intends to deplete the funds in the Account, and BBOP’s current liquidity position shows
the funds are in danger of being further lost or depleted (rather than paid to Parsons) if not
maintained as a distinct account separate from BBOP’s operations; (ii) at a minimum, the funds in
the Account are at imminent risk of being depleted or otherwise used for purposes other than to
pay the overriding royalties that Parsons is entitled to receive under the Conveyances, (iii) BBOP
2gave up the right to operate without the Account in a 2014 letter agreement; (iv) LL&E
Partnership’s overriding royalty interest in the Conveyances is a real property interest calculated
net of certain expenses, (v) BBOP holds any unpaid overriding royalties in trust for LL&E; and
(vi) LL&E 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 Court finds that a temporary injunction should issue.
THE COURT THEREFORE ISSUES THIS TEMPORARY INJUNCTION
ENJOINING AND PROHIBITING Breitburn Operating, LP (as putative successor to Third-
party defendants QRE Operating, LLC, Breitburn Energy Partners, LP, and QR Energy, LP),
Breitburn Management LLC, and Maverick Natural Resources, LLC, their officers, agents,
servants, employees, and attorneys, and all those in active concert or participation with them
(collectively, “BBOP”) from closing, liquidating, or depleting the Wells Fargo Securities, NA
Money Market Account number ******82 (the “Account”) to a balance below $13,400,000.00, or
otherwise withdrawing or transferring any of that $13,400,000.00 from the Account. This equitable
relief is ordered without prejudice to BBOP’s transfer or removal of the Account’s balance in
excess of $13,400,000.00, and this equitable relief is likewise ordered without prejudice to any
LL&E Trust claims against BBOP in excess of $13,400,000.00.
It is further ORDERED that,
This Temporary Injunction shall remain in effect until final judgment is entered in this civil
action or until further agreed by the Parties or as otherwise ordered by this Court
It is further ORDERED that trial on the merits with respect to the ultimate relief sought
shall begin at _***XXXX___m. on November 15 909 1 in the courtroom of the 133" Judicial
3-District, Harris County, Texas.
Accordingly, the Clerk of the Court is hereby directed to issue a Writ of Injunction for
service to all parties with notice to appear at said trial.
The Clerk shall forthwith, on execution and filing by Parsons of the bond hereinafter
required, and on approving the same according to the law, issue a temporary injunction in
conformity with the law and the terms of this Order.
This Order shall not be effective unless and until Parsons executes and files with the Clerk
a bond, in conformity with the law, in the amount of $ 250,000.00 , which shall be satisfied
from the Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) deposited as security for
the Temporary Restraining Order, and which bond may also be in the form of a deposit of a
negotiable obligation of any bank or savings and loan association chartered by the government of
the United States of America or any state thereof that is insured by the government of the United
States of America or any agency thereof, pursuant to Tex. R. Civ. P. 14c. By check made payable
and delivered to The Kim Law Firm, the Clerk shall refund to Parsons the balance (if any) of the
Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) deposited as security for the
Temporary Restraining Order which is not applied as security for this Temporary Injunction.
WARNING: FAILURE TO OBEY A COURT ORDER MAY RESULT IN
FURTHER LITIGATION TO ENFORCE THE ORDER, INCLUDING CONTEMPT OF
COURT. A FINDING OF CONTEMPT MAY BE PUNISHED BY CONFINEMENT IN
JAIL FOR UP TO SIX MONTHS, A FINE OF UP TO $500 FOR EACH VIOLATION, AND
A MONEY JUDGMENT FOR PAYMENT OF ATTORNEYS’ FEES AND COURT
COSTS.
-4.Entered and signed at -m. on May , 2021.
Signed: jp? we WALD
5/20/2021
HON. JACLANEL MCFARLAND, JUDGE
Without agreeing to its terms, I read this proposed order after our hearing on May 12, 2021,
and before it was submitted to the Honorable Judge McFarland for signing.
BECK REDDEN LLP
Geoff A. Gannaway, Attorney in charge for
Plaintiff BREITBURN OPERATING LP, successor-in-interest to
QRE OPERATING, LLC AND
THIRD-PARTY DEFENDANTS
BREITBURN MANAGEMENT COMPANY, LLC,
BREITBURN ENERGY PARTNERS, LP,
QR ENERGY, LP, AND MAVERICK
NATURAL RESOURCES, LLC
5.
Preview
EXHIBIT5/12/2021 2:16:12 PM Marilyn Burgess - District Clerk Harris County Envelope No: 53372773 By: HODGINS, KEELEY M Filed: 5/12/2021 2:16:12 PM CAUSE NO. 2015-47031 QRE OPERATING, LLC § IN THE DISTRICT COURT OF § Plaintiff, § § vs. § HARRIS COUNTY, TEXAS § ROGER D. PARSONS, IN HIS § CAPACITY AS TRUSTEE OF THE § LL&E ROYALTY TRUST § § Defendant. § 133" JUDICIAL DISTRICT TEMPORARY INJUNCTION Defendant ROGER D. PARSONS, solely in his capacity as trustee of the LL&E ROYALTY TRUST (“Parsons” or the “LL&E Trust”), as a general partner in the LL&E Royalty Partnership, filed an application for an order compelling deposit of the account identified by the parties as Wells Fargo Securities, NA Money Market Account number ******82 (the “Account”) into the Court’s registry or, alternatively, for a Temporary Injunction to preserve the status quo by prohibiting Breitburn Operating, LP (as putative successor to Third-party defendants QRE Operating, LLC, Breitburn Energy Partners, LP, and QR Energy, LP), Breitburn Management LLC, and Maverick Natural Resources, LLC, their officers, agents, servants, employees, and attorneys, and all those in active concert or participation with them (collectively, “BBOP”) from further liquidating or drawing down the Account after reducing the Account’s balance to $13.4 million following the April 29, 2021 Temporary Restraining & Show Cause Order entered in this civil action Parsons has alleged a breach of contract claim against BBOP, and Parsons is defending against BBOP’s claim for declaratory relief on the same issue. -l- Pgs-5 TINIX ORTXUpon a hearing held online via Zoom beginning at 4:30 p.m on May 12, 2021, and attended by counsel for Parsons and BBOP, Parsons set forth his claim and offered evidence that at least $13,356,193 of the Account belongs to Parsons through the LL&E Partnership. He further alleges and offered evidence that liquidating of the Account will cause immediate and irreparable harm and injury to the LL&E Trust through the LL&E Partnership. Parsons set forth his allegations and offered evidence that a claim for money damages against BBOP will not be as complete, practical, and efficient to the ends of justice and its prompt administration as is equitable relief, and further that BBOP should not be permitted to dissipate the funds in the Account before the LL&E Trust’s claims are resolved. The Court finds that Parsons has established a probable right to relief on his claims against BBOP for breach of BBOP’s duty to make monthly overriding royalty payments (calculated net of certain expenses) as required by the Jay Field Conveyances. In particular, the Court finds that Parsons has established a probable right that $13,356,193 of the funds in the Account represent accrued but unpaid royalties that Parsons is entitled to receive under the Conveyances. The Court further finds that Parsons will suffer probable, imminent, and irreparable injury if this Court does not issue a temporary injunction in Parsons’ favor as trustee of the LL&E Trust and thus general partner in the LL&E Royalty Partnership. In particular, the Court finds that: (i) BBOP intends to deplete the funds in the Account, and BBOP’s current liquidity position shows the funds are in danger of being further lost or depleted (rather than paid to Parsons) if not maintained as a distinct account separate from BBOP’s operations; (ii) at a minimum, the funds in the Account are at imminent risk of being depleted or otherwise used for purposes other than to pay the overriding royalties that Parsons is entitled to receive under the Conveyances, (iii) BBOP 2gave up the right to operate without the Account in a 2014 letter agreement; (iv) LL&E Partnership’s overriding royalty interest in the Conveyances is a real property interest calculated net of certain expenses, (v) BBOP holds any unpaid overriding royalties in trust for LL&E; and (vi) LL&E 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 Court finds that a temporary injunction should issue. THE COURT THEREFORE ISSUES THIS TEMPORARY INJUNCTION ENJOINING AND PROHIBITING Breitburn Operating, LP (as putative successor to Third- party defendants QRE Operating, LLC, Breitburn Energy Partners, LP, and QR Energy, LP), Breitburn Management LLC, and Maverick Natural Resources, LLC, their officers, agents, servants, employees, and attorneys, and all those in active concert or participation with them (collectively, “BBOP”) from closing, liquidating, or depleting the Wells Fargo Securities, NA Money Market Account number ******82 (the “Account”) to a balance below $13,400,000.00, or otherwise withdrawing or transferring any of that $13,400,000.00 from the Account. This equitable relief is ordered without prejudice to BBOP’s transfer or removal of the Account’s balance in excess of $13,400,000.00, and this equitable relief is likewise ordered without prejudice to any LL&E Trust claims against BBOP in excess of $13,400,000.00. It is further ORDERED that, This Temporary Injunction shall remain in effect until final judgment is entered in this civil action or until further agreed by the Parties or as otherwise ordered by this Court It is further ORDERED that trial on the merits with respect to the ultimate relief sought shall begin at _***XXXX___m. on November 15 909 1 in the courtroom of the 133" Judicial 3-District, Harris County, Texas. Accordingly, the Clerk of the Court is hereby directed to issue a Writ of Injunction for service to all parties with notice to appear at said trial. The Clerk shall forthwith, on execution and filing by Parsons of the bond hereinafter required, and on approving the same according to the law, issue a temporary injunction in conformity with the law and the terms of this Order. This Order shall not be effective unless and until Parsons executes and files with the Clerk a bond, in conformity with the law, in the amount of $ 250,000.00 , which shall be satisfied from the Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) deposited as security for the Temporary Restraining Order, and which bond may also be in the form of a deposit of a negotiable obligation of any bank or savings and loan association chartered by the government of the United States of America or any state thereof that is insured by the government of the United States of America or any agency thereof, pursuant to Tex. R. Civ. P. 14c. By check made payable and delivered to The Kim Law Firm, the Clerk shall refund to Parsons the balance (if any) of the Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) deposited as security for the Temporary Restraining Order which is not applied as security for this Temporary Injunction. WARNING: FAILURE TO OBEY A COURT ORDER MAY RESULT IN FURTHER LITIGATION TO ENFORCE THE ORDER, INCLUDING CONTEMPT OF COURT. A FINDING OF CONTEMPT MAY BE PUNISHED BY CONFINEMENT IN JAIL FOR UP TO SIX MONTHS, A FINE OF UP TO $500 FOR EACH VIOLATION, AND A MONEY JUDGMENT FOR PAYMENT OF ATTORNEYS’ FEES AND COURT COSTS. -4.Entered and signed at -m. on May , 2021. Signed: jp? we WALD 5/20/2021 HON. JACLANEL MCFARLAND, JUDGE Without agreeing to its terms, I read this proposed order after our hearing on May 12, 2021, and before it was submitted to the Honorable Judge McFarland for signing. BECK REDDEN LLP Geoff A. Gannaway, Attorney in charge for Plaintiff BREITBURN OPERATING LP, successor-in-interest to QRE OPERATING, LLC AND THIRD-PARTY DEFENDANTS BREITBURN MANAGEMENT COMPANY, LLC, BREITBURN ENERGY PARTNERS, LP, QR ENERGY, LP, AND MAVERICK NATURAL RESOURCES, LLC 5.