Motion-Secondary: PETROROCK MINERAL HOLDINGS, LLC, et al vs. MINERVA RESOURCES, LLC, et al

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                                CAUSE NO. DC-22-04656

PETROROCK MINERAL HOLDINGS, LLC,                       §               1N   THE DISTRICT COURT
                                                       §
         Plaintiff in Liquidation,                     §               DALLAS COUNTY, TEXAS
                                                       §
                                                       §               IOIST   IUDICIAL DISTRICT


Todd Bossier,




                                                     §§§§§§§§§
Clarence Jones, Christa Petrusa, et al.
       Plaintiffs in Intervention,

V.

PetroRock Mineral Holdings,      LLC,
         Defendant.



                       AMENDED ORDER CERTIFYING CLASS AND
                          FINAL APPROVAL OF SETTLENIENT


              CAME ON FOR CONSIDERATION                           this day the Approval of Class Action

     Settlement, which was preliminarily sought in a motion originally filed on September 9,

     2022, and set for a final Fairness Hearing held on February 6, 2023. After considering the

     Motion for Final Approval and Brief in Support of Fairness Hearing, evidence presented, the

     papers on file, the arguments       of counsel and           the objecting parties, the Court makes the

     following findings and rulings:

                                         FINDINGS OF FACT

         A.     Procedural Facts.

         l.     On May 3, 2022, PetroRock Mineral Holdings,                    LLC (“PetroRock”)   filed suit in

this Court for the appointment of an agent to oversee the Wind up of the affairs of the business.

The suit also asserted claims on behalf of PetroRock against various insiders and affiliated

companies.


Amended Order Certifying and Approving Class Settlement
        2.      Shortly thereafter, on May 25, 2022, a group of Plaintiff Debt Investors

intervened asserting claims against PetroRock and the other Defendants based on fraudulent

debt investments in PetroRock. The Plaintiff Investors sought a temporary restraining order

freezing the assets of all of the Defendants, which relief was granted, in part, on the basis of the

findings recited in a SEC Cease & Desist Order entered against the former principals of

PetroRock, Thomas Powell and Stefan Toth. On June 27, 2022, an additional group of Plaintiff

Equity Investors intervened asserting identical claims based on fraudulently procured equity

investments. On July 28, 2022, the Debt Investor Plaintiffs filed an amended petition that

asserted class action allegations and claims against PetroRock. On August 25, 2022, a third

group of investors intervened asserting substantially similar claims against the Defendants.

        3.      On June 27, 2022, the Court formally appointed Albert C. (Tre) Black, III as

Wind-Up Agent over PetroRock, which gave him the authority to manage the wind up affairs

of the company as well     as authority to settle and compromise any claims.

        4.      All   parties to the lawsuit attended a mediation before The Honorable Royal

Furgeson on August 31, 2022. That mediation was successful, at least With respect to the claims

against PetroRock, and produced the proposed settlement before the Court. On September 7,

2022, the parties announced a Notice of Settlement and filed a Motion for Preliminary Approval

of Class Action Settlement on September 9, 2022.

        5.      The Court heard the Preliminary Approval Motion on November 3, 2022 at which

time it approved the form of notice to the class members, certified the class, and preliminarily

approved the settlement. The Court entered an Amended Order preliminarily approving the

settlement on November 15, 2022 and set the final Fairness Hearing for December 20, 2022 and

an objection deadline    of December     13, 2022.

        6.      To ensure adequate notice was provided and additional disclosures were provided

to class members, the Representative Plaintiffs adjourned the December 20, 2022 Fairness

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Amended Order Certifying and Approving Class Settlement
Hearing and reset the hearing with a more detailed Supplemental Notice of Class Settlement,

which was served on all interested parties. The Court continued the Fairness Hearing to

February 6, 2023 and set a second objection deadline for January 30, 2023. Adequate notice

was provided to members       of the Class.

        B.      Class Action Maintainable Findings.

        7.      The Court finds that the PetroRock investor class satisfies the requirements of

Texas Rule of Civil Procedure 42 for the certification of a class action. No party has objected

to the certification   of the class.

        8.      The PetroRock investors that are members of the class are in excess of 1,000

investors, which amount would be impractical to join in a single action and multiple, disparate

actions would be inefficient and contrary to the interests of judicial economy or the recovery

interests of the class as a Whole. Accordingly, the class satisfies the numerosity requirements of

Rule 42.

        9.      The PetroRock investors have common, if not identical, claims against PetroRock

related to either (a) breaches of contract for failure to pay on debt promissory notes or (b)

purchase of securities as a result of the same material misrepresentations made to them

regarding the value of oil and gas properties held by PetroRock. To the extent some investors

have claims as noteholders and others have claims as equity investors, the Court finds that the

limited fund available to satisfy investors means that all investors are in a substantially similar

position in that they are unsecured and facing a massive deficiency on their investment loss.

Accordingly, the class, as a whole, satisfies the commonality requirements of Rule 42.

        10.     The Representative Plaintiffs have claims and will face defenses that are typical

of all other similarly situated investors in PetroRock. All Representative Plaintiffs have asserted

and likely could assert claims for fraud, negligent misrepresentation, and violations of the Texas

Securities Act.   All   Representative Plaintiffs face similar defenses of collectability concerns,
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Amended Order Certifying and Approving Class Settlement
arbitration defenses, and contributory negligence defenses based on their purported accredited

investor status. These claims and defenses are typical of the class as a whole. Accordingly, the

class satisfies the typicality requirements of Rule 42.

        11.     The Representative Plaintiffs are represented by experienced and competent

counsel and will adequately protect the interests of the class. The Representative Plaintiffs are

willing and have agreed to assign their third-party claims to a liquidating trust for the benefit of

the class as a Whole and through this settlement seek to obtain a uniform and equitable recovery

for all class members. The only Representative Plaintiffs that are obtaining a release through

this settlement are also waiving all of their rights or claims to any recovery from the settlement

and liquidating trust. This waiver is a substantial benefit to the other class members as it

increases their pro rata share of any recovery and serves as adequate consideration for any

release. Accordingly, the class is adequately represented and protected by these Representative

Plaintiffs consistent with the requirements of Rule 42.

        12.     Consistent with the Court’s earlier Order Preliminarily Approving Class Action

Settlement, the Class is, therefore, certified, as all Investors of PetroRock, their successors and

assigns, who purchased securities from one or more of the Funds and suffered a Net Cash Loss.

        13.     Consistent with Rule 42(b), the Court also finds that the prosecution of separate

actions by or against PetroRock would likely create a risk of inconsistent or varying

adjudications and would substantially impair or impede the interests of members to protect their

interests because   of the limited availability of assets for any investor to obtain any recovery

absent an equitable class approach.

        14.     Further, the questions of law and fact common to the Class members predominate

over any individual members and given the limited fund available to satisfy all investors, a class

action is superior to all other available methods for fair and efficient adjudication of the

controversy. The Class Action as proposed concentrates the litigation in a central forum and
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Amended Order Certifying and Approving Class Settlement
ensures equitable treatment amongst all investors.

         C.     Material Terms of the Settlement.

         15.    The proposed class settlement attempts to create a uniform and equitable

resolution of claims against PetroRock for the benefit of all investors. To accomplish this task,

the parties have agreed that: (a) PetroRock       will contribute all of its assets to a liquidating trust

that Will be responsible for pro rata distribution        of recoveries to investors; (b) PetroRock Will

receive a release for its contribution, which amounts to an unconditional surrender; (c) Subject

to the opt out provision noted in paragraph 15 below, Class members              will assign any claims

they have against PetroRock, its affiliates and insiders, the Non-Settling Defendants, and other

third-parties (excluding certain third-parties as noted in paragraph 16 below) to the liquidating

trust; (d) Charles Oliver, Legacy of Faith Limited Partnership, Upside Solutions                 LLC,   and

Moving Future      LLC    are waiving and releasing their claims to any proceeds            of   the class

settlement and agreeing to cooperate in any future litigation; and (e) Charles Oliver, American

Equity Advisory Group LLC, Legacy of Faith Limited Partnership, Upside Solutions LLC, and

Moving Future LLC are receiving a release from the Class and PetroRock.

         16.    Any member of the Class may opt out of the assignment of claims provision and

may do so within 45 days after entry of the final approval order. No member of the Class may

opt out of the other provisions    of the settlement.

         17.    The Class Settlement does not release any claims against any third-party agent,

advisor, or broker retained by any individual investor that may have sold PetroRock

investments. The Class Settlement does not include assignment of those claims either.

         18.    The language of the Class Action Settlement is approved with the following

change to the definition of RELEASEES in the Agreement:

         Releasees means Legacy of Faith Limited Partnership, Upside Solutions            LLC, Moving
Future   LLC, American Equity Advisory Group LLC (including the “Hidden Wealth Solution”
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Amended Order Certifying and Approving Class Settlement
brand name used by American Equity Advisory Group            LLC),   and Charles Oliver. The term

Releasees also includes the following specifically identified individuals or entities who are

affiliated with the Releasees specifically identified in the prior sentence: a) Mr. Oliver’s family,

being Leanna Oliver, Davis Oliver, and Drake Oliver b) Legacy of Faith Trust and its Trustee,

c) the Institute for Financial Enrichment      LLC, d) the employees of American Equity Advisory
Group   LLC,   being Deborah Klotter, Neill Foshee, and Kirk Rossetter. Releasees does not

include any other entities or individuals not otherwise specifically named above, and does not

include any PetroRock affiliates, agents, or employees. Releasees further does not include any

other entities, individuals, or trusts related to or owned by Charles Oliver, including affiliates,

agents, trustees, or employees not otherwise specifically named above.

        D.      Limited Fund Findings.

        19.     PetroRock is no longer doing business and has limited assets with Which to fund

any settlement. Based on the investigation and due diligence of the court-appointed Wind Up

Agent, Tre Black, it appears there are extremely limited funds from which to pay investors.

PetroRock has liabilities to investors, including the Class, that are in excess of $200 million.

PetroRock is contributing all of its assets to the settlement and is reserving nothing. The assets

contributed are likely worth only $20 million at most. These assets include approximately $1

million of proceeds from the recent sale of oil and gas properties in Crane County, a potential

distribution from two debtor companies that recently filed bankruptcy in the Southern District

of Texas that may be worth as much as $10 million, de minimis additional oil and gas properties

to be liquidated and third-party litigation that the Wind Up Agent estimated to be worth maybe

$4 million. The funds available for distribution to the investors will be increased by Charles

Oliver, Legacy of Faith Limited Partnership, Upside Solutions        LLC,   and Moving Future   LLC
are waiving and releasing their claims to any proceeds     of the class settlement. These funds are

plainly insufficient to pay all investors any significant recovery.

Amended Order Certifying and Approving Class Settlement
        20.     A limited fund,    mandatory class is appropriate, fair and equitable for the Class

members under these circumstances.

        E.      Fairness Findings.

        21.     The settlement agreement was negotiated at arms’ length between sophisticated

parties, each represented by counsel, and was the product of a successful mediation before a

respected former federal judge.

        22.     The consideration of the settlement is reasonable and adequate given the

circumstances. The Settling Defendant, PetroRock, is contributing all of its assets. There are no

additional funds capable of being captured from the Settling Defendant and those funds are

insufficient for a full recovery. The consideration being provided by the Releasees is reasonable

and adequate given the circumstances.

        23.     The litigation, should it not settle, is likely to be expensive, complicated, and

duplicative with other litigation across the country. This is a complicated oil and gas scheme

with complicated investment vehicles. Early resolution for the existing and remaining assets

now is in the best interests   of the Class.

                                      ORDER OF THE COURT

NOW, THEREFORE, IT IS ORDERED that:

          1.      Pursuant to Rule 42(a) and Rule 42(b) of the Texas Rules of Civil Procedure,

 the Court certifies the Settlement Class as:

                  all Investors of PetroRock Mineral Holdings,     LLC, their successors   and

                  assigns, who purchased Securities from one or more of the Funds and

                  suffered a Net Cash Loss.

         2.       1n   the Class Action, Representative Plaintiffs assert claims against the Settling

 Defendant under Sections 33(A)(2) and 33(F)(l) of the Texas Securities Act and for common

 law fraud in connection with the sale of Securities to the Settlement Class Members. The
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Amended Order Certifying and Approving Class Settlement
 Representative Plaintiffs allege the Settling Defendant is a seller of securities that were sold

 on the basis    of untrue statements and omissions of material facts. The Representative Plaintiffs

 alternatively allege that the Settling Defendant committed fraud by misrepresenting the value

 of the assets that were to serve as collateral for the Investments. The Representative Plaintiffs

 alternatively allege that the Settling Defendant made or received fraudulent transfers. For

 purposes      of the Settlement, the Court preliminarily certifies these claims for class action

 treatment.

          3.       The Court fmds that no party objected to the certification of the class and that

 the prerequisites for maintaining a class action under Rule 42(a)      of the Texas Rules of Civil

 Procedure have been satisfied for the Settlement Class in that:

                   (a) the number of Settlement Class Members is so numerous that joinder of all

                       members is impracticable;

                   (b) there are common questions of law and fact;

                   (c) the claims of the Representative Plaintiffs are typical of the claims of the

                       Settlement Class that they seek to represent; and

                   (d) the Representative Plaintiffs Will adequately protect the interests of the

                       Settlement Class.

        4.       The terms of the Settlement Agreement are fair, reasonable and adequate and

support approval     of the Class Settlement. The settlement    was negotiated at arms’ length and

was not the product     of fraud or collusion. The settlement resolves what would otherwise be

extremely complex, expensive and long-lasting litigation. The settlement is early in the

proceeding and obtains all of the assets of the Settling Defendant, which are insufficient to

adequately compensate all members of the Class.           As   a result, a limited fund, mandatory

settlement is fair and reasonable, and an early settlement is in the best interests of the Class.

Experienced and competent counsel represent the settling parties in this case, and they all
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Amended Order Certifying and Approving Class Settlement
recommend and support the settlement. Failure to settle would risk zero recovery for the Class

members because the finite pool of assets would likely be diminished or wasted in addition to

the risk   of loss inherent in any litigation.

        5.       By agreement of      the parties, the language    of the Class Action Settlement is

changed such that the definition of RELEASEES in the Agreement is replaced with:

       Releasees means Legacy of Faith Limited Partnership, Upside Solutions LLC,
       Moving Future LLC, American Equity Advisory Group LLC (including the
       “Hidden Wealth Solution” brand name used by American Equity Advisory
       Group LLC), and Charles Oliver. The term Releasees also includes the
       following specifically identified individuals or entities who are affiliated with
       the Releasees specifically identified in the prior sentence: a) Mr. Oliver’s
       family, being Leanna Oliver, Davis Oliver, and Drake Oliver b) Legacy of Faith
       Trust and its Trustee, c) the Institute for Financial Enrichment LLC, d) the
       employees of American Equity Advisory Group LLC, being Deborah Klotter,
       Neill Foshee, and Kirk Rossetter. Releasees does not include any other entities
       or individuals not otherwise specifically named above, and does not include
       any PetroRock affiliates, agents, or employees. Releasees further does not
       include any other entities, individuals, or trusts related to or owned by Charles
       Oliver, including affiliates, agents, trustees, or employees not otherwise
       specifically named above.

As so changed, the language of the Class Action Settlement has been approved.

        6.       The objections filed to the Settlement Agreement are denied and are overruled.

        7.       The Settlement Agreement is, therefore, APPROVED and the Motion is

GRANTED. The Wind Up Agent is authorized to perform the settlement on behalf of PetroRock

and is hereby appointed as the Trustee       of the PM Settlement Trust.

        8.        Any Class Member that wishes to opt-out of the assignment provisions of the
Settlement Agreement must submit to the Trustee of the PM Settlement Trust and Class Counsel

an opt-out notice within 45 days       of entry of this order. Failure to timely opt out will result in

the Class Member’s claims being assigned to the           PM Settlement Trust.

        9.       The Court will hear fee applications in connection with this Class Action

settlement at a later date. Counsel for the Representative Plaintiffs are approved as Class

Counsel as set forth in the Motion for Preliminary Approval and the Brief in Support of Final
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Amended Order Certifying and Approving Class Settlement
Approval. Class Counsel must submit fee applications Within 90 days of entry of this order.             A

hearing on the fee determination will be held in due course after submission of all fee

applications by Class Counsel, which date may be earlier than 90 days          if all fee applications are
filed earlier. Class Counsel shall serve notice of the fee determination hearing on the Class at

least 21 days before the hearing and any objections to the fee applications must be filed with

this Court no later than 7 days before any hearing.

         10.      Class Counsel shall publish this order on the website WWW.petrorocktrust.com

and shall serve it on all members           of the Class within ten (10) days after entry of this order.

Publication on the website and mailing of the Order as described herein constitutes the best

notice practicable under the circumstances and fully satisfies the requirements of due process

and   of Rule 42 of the Texas Rules of Civil Procedure.

         11.        The Court retains exclusive jurisdiction over the Class Action, the Settling

Plaintiffs, and Settling Defendant to consider all further matters arising out of or connected With

the Settlement and the       PM Settlement Trust.



               Signed this   _   day   of                 ,2023.




                                                            JUDGE PRESIDING




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Amended Order Certifying and Approving Class Settlement