Preview
FILED
12/11/2023 12:00 AM
FELICIA PITRE
DISTRICT CLERK
DALLAS CO., TEXAS
CAROLYN SELLERS DEPUTY
CAUSE NO. DC-22-04656
ALBERT C. BLACK III, as TRUSTEE OF PM
SETTLEMENT TRUST and SUBSTITUTE
PLAINTIFF ON BEHALF OF PENNY HAAB
MOORE, CHRISTA PETRUSA, JOSEPH
PETRUSA, THE KAREN THOMAS FAMILY
TRUST, ALBEAZUL, LLC, JEFF WENDEL,
JAMES DUDOVICK, ADRIANA VAN
HEMERT, RICARDO YANEZ, THE ESTATE
OF MALCOM R. DILLON, JOSE GUERRO,
SHARON MILLER, TERRY SCHACKOW,
DEBRA SUE TAYLOR, JOHN RENTERIA, NOTICE OF FILING OF
DMAR FINANCIAL CORP., JONATHON M. NOTICE OF REMOVAL
HICKS, NANCY SMITHERMAN, ANDREA
LEDBETTER and TED WILSON and others
similarly situation, and as Wind-Up Agent of
PetroRock Mineral Holdings, LLC,
Plaintiff,
v.
STEFAN T. TOTH, 2X5 ENTERPRISES
LIMITED PARTNERSHIP, THE 2X5, LLC,
HOMEBOUND RESOURCES, LLC,
RESOLUTE CAPITAL PARTNERS LTD, LLC;
RESOLUTE CAPITAL ADVISORS, LLC;
RESOLUTE CAPITAL MANAGEMENT
SERVICES, LLC; THOMAS J. POWELL,
POWELL I.P, LLC; MOUNTAIN HIGH
CAPITAL, LLC; MOUNTAIN HIGH CAPITAL
MANAGEMENT LLC; STRATEGIC ENERGY
ASSETS, LLC; TENACITY HOLDING
COMPANY LLC; TIBURON HOLDINGS;
RESOLUTE CAPITAL MANAGERS, LLC;
RCP-LTD., LLC; RCMG, LLC; RESOLUTE
ENERGY CAPITAL, LLC; FOX-IP, LLC; LOVE
2 LIVE, LLC; LOVE 2 LIVE HOLDINGS, INC.;
STEFAN TOTH FAMILY TRUST;
CONSTANTINE CAPITAL, LLC;
HOMEBOUND FINANCIAL GROUP, LP; TED
ETHEREDGE; JACQUELINE KUIPER;
CANDACE POWELL; LEONARD TOTH;
HOMEBOUND ENERGY, LLC;
HOMEBOUND, LLC; PETROROCK
PRODUCTION HOLDINGS, LLC; TOTH
INVESTMENTS, LLC; FELFRAN
INVESTMENTS, LLC; FRTR REALTY
COMPANY, LLC; HOMEBOUND
CONSTRUCTION SERVICES, LLC;
PETROROCK PIPELINE & SWD, LLC; TPS
ENERGY, LLC; TPS ENERGY 2, LLC; TPS
REALTY, LLC; MINERVA MIDSTREAM,
LLC; MINERVA MIDSTREAM
MANAGEMENT, LLC; CRUDE ANC, LLC;
FLINT ROCK MARKETING, LLC; N MASTER
HOLDINGS, LLC; RIVERFRONT MINERALS,
LLC; ELM CAPITAL, LLC; JLTH AT NORTH
GP, LLC; EDERVILLE PARK TOWNHOMES,
LLC; and MCKENNY 90 TOWNHOMES, LLC
Defendants.
Defendants Resolute Capital Partners Ltd., LLC, Resolute Capital Managers, LLC,
and Resolute Management Services, LLC files its Notice of Filing of Notice of Removal
as follows:
1. Attached to this notice as Exhibit A is a true and correct copy of the Notice
of Removal of this case to the United States District Court for the Northern District of
Texas, filed December 8, 2023. The notice of filing of Notice of Removal also will serve
to cause the full removal of this case to federal court, pursuant to 28 U.S.C. § 1332,
precluding this Court from further proceedings in this cause unless and until the action is
remanded.
2
Dated: December 8, 2023. Respectfully submitted,
By: /s/ Charles E. Jones
CHARLES E. JONES
charles.jones@lawmoss.com
MATTHEW R. BURTON
Pro Hac Vice Motion to be Filed
matthew.burton@lawmoss.com
MOSS & BARNETT, P.A.
150 South Fifth Street, Suite 1200
Minneapolis, MN 55402
(612) 877-5000
(612) 877-5999 (fax)
and
By: /s/ Matthew E. Last
DANIEL D. TOSTRUD
State Bar No. 20146160
dtostrud@cobbmartinez.com
MATTHEW E. LAST
State Bar No. 24054910
mlast@cobbmartinez.com
COBB MARTINEZ WOODWARD PLLC
1700 Pacific Avenue, Suite 3100
Dallas, Texas 75201
(214) 220-5224
(214) 220-5299 (Fax)
COUNSEL FOR DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD
AND RESOLUTE CAPITAL MANAGERS
LLC
3
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served
either by e-service, e-mail, facsimile or certified mail return receipt requested to all counsel
of record on this 8th day of December, 2023.
/s/ Matthew E. Last
MATTHEW E. LAST
8918459v1
4
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 1 of 9 PageID 1
IN THE UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS Exhibit A
ALBERT C. BLACK III, as TRUSTEE OF COURT FILE NO. _________
PM SETTLEMENT TRUST and
SUBSTITUTE PLAINTIFF ON BEHALF
OF PENNY HAAB MOORE, CHRISTA
PETRUSA, JOSEPH PETRUSA, THE
KAREN THOMAS FAMILY TRUST,
ALBEAZUL, LLC, JEFF WENDEL, NOTICE OF REMOVAL OF
JAMES DUDOVICK, ADRIANA VAN DEFENDANTS RESOLUTE
HEMERT, RICARDO YANEZ, THE CAPITAL PARTNERS LTD.,
ESTATE OF MALCOM R. DILLON, RESOLUTE CAPITAL MANAGERS,
JOSE GUERRO, SHARON MILLER, LLC AND RESOLUTE
TERRY SCHACKOW, DEBRA SUE MANAGEMENT SERVICES, LLC
TAYLOR, JOHN RENTERIA, DMAR
FINANCIAL CORP., JONATHON M.
HICKS, NANCY SMITHERMAN,
ANDREA LEDBETTER and TED
WILSON and others similarly situation,
and as Wind-Up Agent of PetroRock
Mineral Holdings, LLC,
Plaintiff,
v.
STEFAN T. TOTH, 2X5 ENTERPRISES
LIMITED PARTNERSHIP, THE 2X5,
HOMEBOUND RESOURCES, LLC,
RESOLUTE CAPITAL PARTNERS LTD,
LLC; RESOLUTE CAPITAL ADVISORS,
LLC; RESOLUTE CAPITAL
MANAGEMENT SERVICES, LLC;
THOMAS J. POWELL, POWELL I.P,
LLC; MOUNTAIN HIGH CAPITAL,
LLC; MOUNTAIN HIGH CAPITAL;
MANAGEMENT LLC; STRATEGIC
ENERGY ASSETS, LLC; TENACITY
HOLDING COMPANY LLC; TIBURON
DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. AND
RESOLUTE CAPITAL MANAGERS LLC’S NOTICE OF REMOVAL PAGE 1
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 2 of 9 PageID 2
HOLDINGS; RESOLUTE CAPITAL
MANAGERS, LLC; RCP-LTD., LLC;
RCMG, LLC; RESOLUTE ENERGY
CAPITAL, LLC; FOX-IP, LLC; LOVE 2
LIVE, LLC; LOVE 2 LIVE HOLDINGS,
INC.; STEFAN TOTH FAMILY TRUST;
CONSTANTINE CAPITAL, LLC;
HOMEBOUND FINANCIAL GROUP,
LP; TED ETHEREDGE; JACQUELINE
KUIPER; CANDACE POWELL;
LEONARD TOTH; HOMEBOUND
ENERGY, LLC; HOMEBOUND, LLC;
PETROROCK PRODUCTION
HOLDINGS, LLC; TOTH
INVESTMENTS, LLC; FELFRAN
INVESTMENTS, LLC; FRTR REALTY
COMPANY, LLC; HOMEBOUND
CONSTRUCTION SERVICES, LLC;
PETROROCK PIPELINE & SWD, LLC;
TPS ENERGY, LLC; TPS ENERGY 2,
LLC; TPS REALTY, LLC; MINERVA
MIDSTREAM, LLC; MINERVA
MIDSTREAM MANAGEMENT, LLC;
CRUDE ANC, LLC; FLINT ROCK
MARKETING, LLC; N MASTER
HOLDINGS, LLC; RIVERFRONT
MINERALS, LLC; ELM CAPITAL, LLC;
JLTH AT NORTH GP, LLC; EDERVILLE
PARK TOWNHOMES, LLC; and
MCKENNY 90 TOWNHOMES, LLC
Defendants.
Defendants Resolute Capital Partners Ltd., LLC, Resolute Capital Managers, LLC,
and Resolute Management Services, LLC, by and through their undersigned counsel, as
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 2
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 3 of 9 PageID 3
and for their Notice of Removal pursuant to 28 U.S.C. §§1441(a), 1446, and 1453(b) and
the Class Action Fairness Act, 28 U.S.C. § 1332(d), and in support thereof, state as follows:
1. Resolute Capital Partners Ltd., LLC (“RCP”) is a Nevada limited liability
company. Resolute Capital Managers, LLC (“RCM”) is a Nevada limited liability
company. Resolute Management Services, LLC (“RMS”) is a Delaware limited liability
company.
2. This Notice of Removal concerns a lawsuit (the “Action”) pending in the
District Court for Dallas County, Texas. The Action, which arose out of a wind-up
proceeding involving a Texas company called PetroRock Mineral Holdings, LLC, has a
complex procedural history.
3. The Action was commenced on or about May 3, 2022, with the filing of a
Petition seeking the appointment of an agent to wind up the affairs of PetroRock. (Ex. A.)
This Petition alleged a securities fraud in excess of $200 million. (Id., par. 14.)
4. The Action was initially captioned PetroRock Mineral Holdings, LLC v.
Minerva Resources LLC, Mercury Operating, LLC, Stefan T. Toth, 2x5 Enterprises Ltd.
Partnership, The 2x5, LLC, and Cronus Mineral Holdings, LLC, Cause No. DC-22-04656.
(Id.)
5. RCP, RCM, and RMS were not named as defendants in this Petition.
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 3
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 4 of 9 PageID 4
6. On or about May 25, 2022, a Petition in Intervention was filed in the Action
on behalf of certain persons who sought relief based upon their status as “Secured
Investors” in PetroRock. (Ex. B.) These Secured Investors included persons from Florida,
Ohio, Wisconsin, California, Illinois, Indiana, and other states. (Id., pars. 8-24.)
7. RCM and RMS were not identified or named as parties in this Petition in
Intervention. RCP was identified in this Petition in Intervention, but it was not named as a
party defendant. The May 22, 2022 Petition was not served upon RCP.
8. Subsequent Petitions and Amended Petitions were filed in the Action by
other groups of PetroRock investors from other states, including a July 28, 2022 amended
petition that asserted class action claims against PetroRock. (See Ex. C (April 21, 2023
Order), p. 2.)
9. RCP was named as a party defendant in the caption of some of these
Petitions. However, none of these Petitions was served on RCP; likewise, none of them
was served on either RCM or RMS.
10. On or about June 27, 2022, the Court in the Action entered an Order
appointing Albert C. (Tre) Black III as the Wind-Up Agent over PetroRock. (Ex. D.)
11. A partial settlement of many of the investors’ claims was reached in
September 2022. This settlement resolved (or at least purported to resolve) the investors’
claims against PetroRock. This settlement also envisioned the creation of a Trust (later
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 4
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 5 of 9 PageID 5
denominated the “PM Settlement Trust”) to pursue claims on behalf of the investors against
entities and persons allegedly liable for PetroRock’s insolvency. (See Ex. C, p. 2.)
12. On November 15, 2022, the Court entered an Amended Order Preliminarily
Certifying Class for Settlement Purposes. (See Ex. C, p. 2; see also Ex. G, (Consolidated
Amended Petition), ¶ 3.)
13. On April 21, 2023, the Court entered a final Amended Order Certifying Class
and Final Approval of Settlement dated (“Class Approval Order”). (Ex. C.) Among other
things, the Class Approval Order certified a Settlement Class, as follows:
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.
(Ex. C, p. 7.) This Order states that the class consists of more than 1,000 people.
(Id., p.3.)
14. Based on the best information currently available to RCP, RCM, and RMS,
less than fifteen percent of the members of the class are residents of Texas.
15. Also in the Class Approval Order, the Court confirmed that the members of
the class assigned their claims to a liquidating trust, the PM Settlement Trust. (Ex. C, p. 5.)
16. The Class Approval Order appointed Wind-Up Agent Black as Trustee of the
PM Settlement Trust. Based on this Order, Black asserts that he has standing and authority
to pursue claims on behalf of the class, and (as noted below) on September 22, 2023, Black
filed a Consolidated Amended Petition asserting those claims. (Ex. G, ¶ 5.)
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 5
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 6 of 9 PageID 6
17. On or about September 14, 2023 (before the filing of the Consolidated
Amended Petition), Stefan Toth and an entity known as Homebound Resources, LLC (both
of which were original defendants in the Action) filed a joint Answer in the Action. (Ex. E.)
18. On or about September 15, 2023, Defendants Toth and Homebound filed
their Crossclaim against parties including RCP, RCM, and RMS. (Ex. F.) This Crossclaim
was served upon RCP, RCM, and RMS on or about October 9 and 11, 2023. Counsel for
Defendants Toth and Homebound have agreed to an extension of time to Answer the
Crossclaim until December 15, 2023.
19. On or about September 22, 2023, Black (in his capacities as the Trustee of
the PM Settlement Trust and as the Wind-Up Agent) filed a Consolidated Amended
Petition (“CAP”). (Ex. G.)
20. In the CAP, Black asserts securities-fraud claims against RCP, RCM, and
RMS (and many other defendants) on behalf of the previously-certified class of investors.
(See Ex. G, ¶¶ 2-5 (summarizing procedural history, including the April 21, 2023 Class
Action Order and asserting that Black has the authority to sue on behalf of the certified
class).)
21. On or about November 10, 2023, counsel for RCP, RCM, and RMS agreed
to accept service of the CAP on RCP, RCM, and RMS. Accordingly, November 10, 2023
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 6
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 7 of 9 PageID 7
was the first day on which a pleading asserting class-action claims against these removing
parties, RCP, RCM, and RMS, was served on these removing parties.
22. As set forth above, and pursuant to 28 U.S.C. § 1332(d), this matter involves
a class of more than 100 persons, the amount in controversy exceeds $5 million, at least
one class member is from a state different than the removing parties, RCP, RCM, and RMS,
and less than fifteen percent of the members of the class are residents of Texas.
WHEREFORE, Defendants Resolute Capital Partners Ltd., LLC, Resolute Capital
Managers, LLC, and Resolute Management Services LLC respectfully request that this
case proceed in this Court as an action properly removed to it.
Dated: December __, 2023. Respectfully submitted,
By: /s/ Charles E. Jones
CHARLES E. JONES
charles.jones@lawmoss.com
MATTHEW R. BURTON
Pro Hac Vice Motion to be Filed
matthew.burton@lawmoss.com
MOSS & BARNETT, P.A.
150 South Fifth Street, Suite 1200
Minneapolis, MN 55402
(612) 877-5000
(612) 877-5999 (fax)
and
By: /s/ Matthew E. Last
DANIEL D. TOSTRUD
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 7
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 8 of 9 PageID 8
State Bar No. 20146160
dtostrud@cobbmartinez.com
MATTHEW E. LAST
State Bar No. 24054910
mlast@cobbmartinez.com
COBB MARTINEZ WOODWARD PLLC
1700 Pacific Avenue, Suite 3100
Dallas, Texas 75201
(214) 220-5224
(214) 220-5299 (Fax)
COUNSEL FOR DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD
AND RESOLUTE CAPITAL MANAGERS
LLC
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 8
Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 9 of 9 PageID 9
CERTIFICATE OF SERVICE
I hereby certify that a true and correct copy of the foregoing document was served
either by e-service, e-mail, facsimile or certified mail return receipt requested to all
counsel of record on this 8th day of December, 2023.
/s/ Matthew E. Last
MATTHEW E. LAST
8822664v1
NOTICE OF REMOVAL OF DEFENDANTS
RESOLUTE CAPITAL PARTNERS LTD. LLC,
RESOLUTE CAPITAL MANAGERS, LLC AND
RESOLUTE MANAGEMENT SERVICES, LLC
PAGE 9
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 1 of 39 PageID 10
EXHIBIT A
FILED
6 CIT ESERVE 5/2/3252??ng
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 2 of 39 PageID 11 DISTRICT CLERK
DALLAS CO., TEXAS
Paula Mountique DEPUTY
DC-22-04656
CAUSE N0.
§§§§§§§§§§§§§§§§
PETROROCK MINERAL HOLDINGS, IN THE DISTRICT COURT
LLC,
Plaintiff,
v.
MINERVA RESOURCES, LLC, DALLAS COUNTY, TEXAS
MERCURY OPERATING, LLC,
STEFAN T. TOTH, 2X5 ENTERPRISES
LIMITED PARTNERSHIP, THE 2X5,
LLC, and CRONUS MINERAL
HOLDINGS, LLC, 101st
Defendants. JUDICIAL DISTRICT
PLAINTIFF’S ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF
Plaintiff PetroRock Mineral Holdings, LLC and/or “PetroRock”) files this Original
Petition for Court Supervised Wind Up and Related Relief (the against Defendants
Minerva Resources, LLC Mercury Operating, LLC (“Mercury”), Stefan T. Toth
(“M”), 2x5 Enterprises Limited Partnership (“2x5 LP”), The 2x5, LLC (“2x5 GP”), and Cronus
Mineral Holdings, LLC (“Cronus”) (collectively, Minerva, Mercury, Toth, 2X5 LP, 2x5 GP, and
Cronus may be referred to as the “Defendants”), and in support thereof would respectfully show
the Court as follows:
I. DISCOVERY CONTROL PLAN
AND RULE 47 STATEMENT
l. Plaintiff intends to conduct discovery under Level 2 of the Texas Rule of Civil
Procedure 190.3.
2. This suit seeks monetary relief exceeding $1 million as well as non-monetary relief.
PLAINTIFF’S ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF 1
4886-8316-3422v.6 020927.00001 Page 1 of
Pa? 7
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 3 of 39 PageID 12
II. PARTIES
3. Plaintiff PetroRock Mineral Holdings, LLC is a Texas limited liability company
with a principal place of business located at 6321 Campus Circle Drive E, Irving, Texas, 75063.
4. Defendant Minerva Resources, LLC is a Texas limited liability company with a
principal place of business located at 433 E. Las Colinas B1Vd., Suite 840, Irving, TX 75039.
Defendant Minerva Resources, LLC may be served with process by serving its registered agent,
Pablo Cortez, 433 E. Las Colinas Blvd., Suite 840, Irving, TX 75039.
5. Defendant Mercury Operating, LLC is a Texas limited liability company with a
principal place of business located at 6321 Campus Circle Dr. E., Irving, TX 75063. Defendant
Mercury Operating, LLC may be served with process by serving its registered agent, Phillip E.
Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243.
6. Defendant Stefan T. Toth is an individual residing in Collin County, Texas and may
be served at 5942 Haley Way, Frisco, Texas 75034, or wherever he may be found.
7. Defendant 2x5 Enterprises Limited Partnership is a Texas limited partnership with
a principal place of business located at 1504 Glenmeade Court, Keller, TX 76262. Defendant 2x5
Enterprises Limited Partnership may be served with process by serving its registered agent, Phillip
E. Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243.
8. Defendant The 2x5, LLC is a Texas limited liability company with a principal place
of business located at 1504 Glenmeade Court, Keller, TX 76262. Defendant The 2x5, LLC may
be served with process by serving its registered agent, Phillip E. Cannatti, 8330 LBJ Frwy #741,
Dallas, Texas 75243. Defendant The 2x5, LLC is the general partner of Defendant 2x5 Enterprises
Limited Partnership.
PLAINTIFF’S ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF 2
4886-8316-3422v.6 020927.00001 Page 2 of
Pa? 7
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 4 of 39 PageID 13
9. Defendant Cronus Mineral Holdings, LLC is a Texas limited liability company with
a principal place of business located at 6321 Campus Circle Dr. E., Irving, TX 75063. Defendant
Cronus Mineral Holdings, LLC may be served with process by serving its registered agent, Phillip
E. Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243.
III. JURISDICTION AND VENUE
10. This Court has jurisdiction over this matter because the amount in controversy
exceeds the minimum jurisdictional requirements.
1 1. Venue is proper in Dallas County, Texas because all or a substantial part of the acts
or omissions forming the basis of this suit occurred in Dallas County, Texas, under Section
15.002(a)(l) of the Texas Civil Practice & Remedies Code.
IV. BACKGROUND
12. Plaintiff is at the center of an alleged securities fraud involving in excess of $200
million of investor funds. Plaintiff therefore seeks this Court’s assistance and supervision to wind
up its business and liquidate its assets for the benefit of its creditors. Under Texas law:
on application of a domestic entity or an owner or member of a
domestic entity, a court may:
(l) supervise the winding up of the domestic entity;
(2) appoint a person to carry out the winding up of the domestic
entity; and
(3) make any other order, direction, or inquiry that the circumstances
1
may require.
l3. Following the filing of this Petition, Plaintiff will file an application with the Court
to appoint a neutral third-party “Wind Up Representative” to carry out the winding up of its
business. The Wind Up Representative, among other things, will collect and conduct an orderly
1
Tex. Bus. Orgs. Code § 11.054.
PLAINTIFF’s ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF 3
4886-8316-3422v.6 020927.00001 Page 3 of
Pa? 7
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 5 of 39 PageID 14
liquidation of Plaintiff’ s assets, including any causes of action the liquidation of which Will benefit
Plaintiffs creditors.
A. The Alleged Securities Fraud
14. Beginning in 2016, Resolute Capital Partners LTD, LLC (“fl”) and Homebound
Resources, LLC (“Homebound”) raised approximately $200 million from investors through
various entities described in more detail below (the “Debt Funds”):
Offering Open Date Money Raised
HBR VI May 2016 $3,200,000
SEA III November 2016 $3,750,000
PRMH Lenders Fund April 2017 $20,008,750
PRMH Lenders Fund II May 2017 $19,491,250
PRMH Lenders Fund III November 2017 $20,529,000
PRMH Lenders Fund IV December 2017 $21,643,000
Choice Energyl January 2018 $13,418,000
Legacy Energy March 2018 $39,702,000
Legacy Energy II May 2018 $7,454,517
Choice Energy II July 2018 $13,134,600
Choice Energy III August 2018 $37,673,764
TOTAL $200,004,881
15. On or about September 24, 2021, the Securities and Exchange Commission (the
“fl’? issued its Order Instituting Administrative and Cease-and—Desist Proceedings, Pursuant
t0 Section 8A of the Securities Act of] 933, Sections 15(1)) and 21C of the Securities Exchange Act
of 1934, and Section 203m of the Investment Advisors Act of 1940, Making Findings, and
Imposing Remedial Sanctions and a Cease-and—Desist Order (the “SEC Order”)2 against RCP,
Homebound, Toth, and Thomas J. Powell (“Powell”).
2
A true and correct copy of the SEC Order is attached hereto as Exhibit A.
PLAINTIFF’S ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF 4
4886-8316-3422v.6 020927.00001 Page 4 of
Pa? 7
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 6 of 39 PageID 15
16. Powell is the owner of RCP and other related entities, serving as RCP’s Senior
Managing Partner. Powell was also the owner and Chief Executive Officer of Resolute Capital
Advisors, LLC, a previously-registered SEC investment advisor. Powell is actively cooperating
in Plaintiff’s efforts to wind up Plaintiff’s business for the benefit of its creditors.
17. Toth is the founder, co-owner, Chairman, President, and Chief Executive Officer
of Homebound Financial Group (“fl”). Toth also operates and controls HFG’s subsidiaries,
including Homebound and, until recently, Plaintiff. Unlike Powell, Toth has been less than
cooperative in Plaintiff’ s efforts to repay its creditors.
18. Each of the Debt Funds is a subsidiary of Plaintiff. Under Toth’s leadership, the
Debt Funds issued promissory notes to the investors, and then they would lend the investors’ funds
to Plaintiff, which in turn would issue promissory notes to the Debt Funds along with unconditional
guarantees. The investors were led to believe Plaintiff would use their fimds to acquire oil and gas
leases, fund business operations and investments, and make interest payments on Plaintiff’s debt.
Investors were also led to believe Plaintiff would pledge oil and gas collateral sufficient to secure
the debt.
19. In reality, however, only a fraction of the funds were used to purchase oil and gas
assets, and Toth caused the diversion of investor funds to related-party transactions for which the
investors received no conceivable benefit. Thus, the value of the assets falls far short of what Toth
led investors to expect.
B. Toth Diverts Investor Funds for Defendants’ Benefit
20. For those oil and gas interests Toth actually caused Plaintiff to acquire, he engaged
one of his affiliated entities, Defendant Mercury, to serve as operator. Toth indirectly owns and
controls Mercury through various entities, including HFG and Love 2 Live Holdings, Inc.
PLAINTIFF’S ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF 5
4886-8316-3422v.6 020927.00001 Page 5 of
Pa? 7
Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 7 of 39 PageID 16
21. According to Plaintiff’s books and records (prepared under Toth’s control),
Plaintiff allegedly owes Mercury more than $23 million. But Plaintiff disputes that this represents
a legitimate debt. Upon information and belief, for example, Toth caused Mercury to charge
Plaintiff exorbitant and illegitimate fees in order to bleed Plaintiff dry of investor funds.
22. Equally if not even more egregious, upon information and belief, Toth caused
Plaintiff to sell oil and gas assets originally purchased with investor funds, and then he diverted
the proceeds to another one of his affiliated entities, Defendant Minerva. Toth indirectly holds
100% of the voting units in Minerva through various entities, including Minerva Resources
Management, LLC and Cronus Mineral Holdings, LLC.3
23. Minerva then used the proceeds of Plaintiff s assets to purchase oil and gas interests
of its own. Upon information and belief, such interests are producing in paying quantities and are
being operated by legitimate third-party operators such as Conoco. As part of these proceedings,
Plaintiff intends to seek a constructive trust over such assets for the benefit of its creditors, as well
as any other appropriate relief against Defendants.
24. Similarly, Toth caused Plaintiff and/or Defendant Minerva to grant overriding
royalty interests (“M”) to various affiliates, including Defendants 2X5 LP and Cronus.
Plaintiff likewise intends to seek a constructive trust over any ORRIs fairly traceable to investor
funds, as well as any other appropriate relief.
25. Since the first of this year, Minerva has diverted in excess of $3 million to insiders
and/or for their own overhead. Plaintiff makes these allegations as mere examples of Defendants’
3
For the avoidance of doubt, Powell indirectly holds non-voting membership interests in Minerva, but without the
right to vote he lacks any authority over Minerva’s operations.
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misconduct. There is little doubt that, assuming the Court appoints the Wind Up Representative
as requested herein, such individual’s investigation will uncover more.
C. Efforts to End the Ongoing Fraud and Repav Investors
26. After the SEC included RCP and Powell as parties to the SEC Order, RCP and
Powell resolved to clear their names and make amends. Through a series of transactions in 2021,
RCP and Powell took control of Plaintiff through an affiliated entity, Resolute Energy Capital,
LLC (“fl”). REC is the current and sole manager of Plaintiff, with exclusive authority to
manage Plaintiff’s business. REC also manages the Debt Funds.
27. REC caused Plaintiff to retain the undersigned counsel to pursue this court-
supervised wind up. REC also caused Plaintiff to retain CR3 Partners, LLC (“m”), a nationally-
recognized turnaround advisory firm. REC intends to exercise its management authority to
terminate Toth’s remaining management interests (to the extent he retained any) and to appoint
CR3’s Greg Baracato as Plaintiff’s Chief Restructuring Officer. Mr. Baracato has experience and
expertise in the oil & gas industry.
28. Under Toth’s leadership, Plaintiff and Defendants Mercury and Minerva shared
office space. One of CR3’s first objectives was to procure Plaintiff’s books and records from that
office. While Defendants have cooperated to some extent, it appears their recordkeeping vis-a-vis
Plaintiff fell short of reasonable expectations for a multi-hundred-million-dollar enterprise. Toth
in particular has refused to respond to CR3’s and the undersigned counsel’s reasonable requests
for information.
29. Plaintiff intends to terminate Defendant Mercury’s role as operator of certain oil
and gas interests held by Plaintiff, and Plaintiff does not necessarily expect Mercury to react
positively nor to cooperate fully in the transition to a new operator. Plaintiff therefore requires
PLAINTIFF’S ORIGINAL PETITION FOR COURT
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this Court’s assistance not only with Winding up its affairs but also with procuring the information
and cooperation necessary to effectuate a successful liquidation for the benefit of creditors.
V. PETROROCK LIOUIDATION &
APPOINTMENT OF WIND-UP REPRESENTATIVE
30. The foregoing paragraphs of the Petition are incorporated here by reference.
31. Pursuant to Tex. Business Organizations Code § 11.054, and subject to the other
provisions of the code:
on application of a domestic entity or an owner or member of a
domestic entity, a court may:
(l) supervise the Winding up of the domestic entity;
(2) appoint a person to carry out the winding up of the domestic
entity; and
(3) make any other order, direction, or inquiry that the circumstances
may require.4
32. For example, in 2014 the 68th Judicial District Court of Dallas County appointed a
wind-up representative to carry out the winding-up of a business, with authority to do “any and all
acts. . .to accomplish the required Winding-up of the business and affairs.” The order vested the
wind-up representative in that matter with numerous responsibilities on behalf of the business,
including, but not limited to: collecting assets, monies, securities, accounts, contracts, leases,
properties, and tangible and intangible personal/real property.6
4
See Tex. Business Organizations Code § 11.054.
5
See Order Appointing Wind-Up Representative in Cause No. DC-l 1-04730, dated November 7, 2014 and attached
hereto as Exhibit B.
6
Id.
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33. Now, Plaintiff seeks to have a Wind-up representative appointed in this matter with
similar authority. Specifically, Plaintiff will file a separate application asking this Court to grant
all necessary and appropriate powers, including, Without limitation, the following:
a. immediately take and maintain possession and control of all real and personal
property of PetroRock;
take and maintain possession of all documents, books, records, papers and accounts
of and relating to PetroRock;
exclude Toth, his entities, and their agents, servants and employees, wholly fiom
access to PetroRock’s property;
retain a professional to perform an accounting of PetroRock’s finances;
cease to carry on the business of PetroRock, except to the extent necessary to wind
up such business;
pay legitimate creditors of PetroRock as required by law;
sell PetroRock’s property to the extent that the property is not to be distributed in
kind; and
perform any other acts as ordered by the Court and/or that are required to wind up
the business and affairs of PetroRock.
34. Further, Tex. Business Organizations Code § 11.054(3) permits the Court to “make
any other order, direction, or inquiry that the circumstances may require.”7
VI. CONSTRUCTIVE TRUST
35. The foregoing paragraphs of the Petition are incorporated here by reference.
36. In Texas, a plaintiff seeking a constructive trust must prove (i) that the defendant
acquired property from the plaintiff through breach of trust or fraud; (ii) that allowing the
defendant to retain the property would unjustly enrich him; and (iii) that the defendant currently
possesses the plaintiff‘s property or its traceable product.
7
See Tex. Business Organizations Code § 11.054.
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37. As discussed above, Toth and the other Defendants breached positions of trust in
order to enrich themselves. These breaches resulted in Defendants’ unjust enrichment from
investors’ funds and the proceeds and products thereof. Defendants continue to possess investors’
funds and the proceeds and products thereof and refuse to return them to Plaintiff for the benefit
of rightful creditors.
38. Accordingly, Plaintiff seeks the imposition of a constructive trust over all funds
and property currently in Defendants’ possession or control that is fairly traceable to investors’
funds.
VII. AN CILLARY RELIEF
39. The foregoing paragraphs of the Petition are incorporated here by reference.
40. To the extent necessary to achieve the goal of an orderly liquidation and Wind up
for the benefit of Plaintiff’s creditors, Plaintiff intends to seek ancillary relief as appropriate.
41. Plaintiff will seek declaratory relief, for example, when necessary to settle any
disputes over the parties’ relative rights under Tex. Civ. Prac. & Rem. Code ch. 37.
42. Plaintiff will also seek temporary and permanent injunctive relief as necessary to
ensure Defendants’ cooperation in the process under Tex. Civ. Prac. & Rem. Code ch. 65.
43. Plaintiff may seek the appointment of a receiver or the addition of the powers of a
receiver as necessary to collect the assets of the above-described constructive trust pursuant to
Tex. Civ. Prac. & Rem. Code ch. 64.
44. Plaintiff will seek, or will assist creditors who wish to intervene and seek, avoidance
and recovery of fraudulent conveyances and preferences under Tex. Bus. & Comm. Code ch. 24.
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45. Plaintiff will seek to recover from Defendants for all breaches of contract, breaches
of fiduciary duties, common law fraud, statutory fraud, and all other claims and causes of action
for which Defendants are liable to Plaintiff.
VIII. CONDITIONS PRECEDENT
46. Plaintiff has performed all conditions precedent to bring this suit.
IX. CONCLUSION AND PRAYER
WHEREFORE, PREMISES CONSIDERED, Plaintiff PetroRock Mineral Holdings, LLC
requests the following relief:
A. Upon separate application, appointment of a Wind Up Representative;
B. Supervision of the Wind Up Representative’s efforts to Wind up Plaintiff s business
and liquidate its assets for the benefit of creditors;
C. Imposition of a constructive trust over Defendants’ property to the extent necessary
to prevent unjust enrichment;
D. Any and all ancillary relief necessary to achieve these goals, including, but not
limited to, declaratory relief, injunctive relief, avoidance and recovery of
preferences and fraudulent conveyances, recovery on all other claims and causes of
action against Defendants; and
E. Such other and further relief, both at law and in equity, general and specific, to
which Plaintiff proves it is justly entitled.
Dated May 3, 2022.
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Respectfully submitted,
By: /s/ Dennis L. Roossz'en, Jr.
Dennis L. Roossien, Jr.
Texas Bar No. 00784873
droossien@munsch.com
Julian P. Vasek
State Bar No. 24070790
jvasek@munsch.com
Claire E. Carroll
State Bar No. 24092224
ccarroll@munsch.com
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard, Suite 3800
Dallas, Texas 75201
(214) 855-7500 (telephone)
(214) 855 -75 84 (facsimile)
COUNSEL FOR PLAINTIFF PETROROCK
MINERAL HOLDINGS, LLC
PLAINTIFF’S ORIGINAL PETITION FOR COURT
SUPERVISED WIND UP AND RELATED RELIEF Pa e12
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UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
Release N0. 10987 / September 24, 2021
SECURITIES EXCHANGE ACT OF 1934
Release N0. 93124 / September 24, 2021
INVESTMENT ADVISERS ACT OF 1940
Release N0. 5872 / September 24, 2021
INVESTMENT COMPANY ACT OF 1940
Release N0. 34382 / September 24, 2021
ADMINISTRATIVE PROCEEDING
File N0. 3-20597
In the Matter of ORDER 1NSTITUT1NG ADMINISTRATIVE
AND CEASE-AND-DESIST PROCEEDINGS,
Resolute Capital Partners LTD, LLC, PURSUANT T0 SECTION 8A OF THE
Homebound Resources, LLC, SECURITIES ACT OF 1933, SECTIONS
Thomas J. Powell, and 15(b) AND 21C OF THE SECURITIES
Stefan T. Toth, EXCHANGE ACT OF 1934, SECTION 9(b)
OF THE INVESTMENT COMPANY ACT
Respondents. OF 1940, AND SECTION 203(1) OF THE
INVESTMENT ADVISERS ACT OE 1940,
MAKING FINDINGS, AND IMPOSING
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER
The Securities and Exchange Commission (“SEC” or “Commission”) deems it appropriate
and in the public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant
to Section 8A of the Securities Act of 1933 (“Securities Act”) against Resolute Capital Partners
LTD, LLC (“RCP”) and Homebound Resources, LLC (“Homebound”); that public administrative
and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the
Securities Act, Sections 15 (b) and 21C of the Securities Exchange Act of 1934 (“Exchange A
Preview
FILED 12/11/2023 12:00 AM FELICIA PITRE DISTRICT CLERK DALLAS CO., TEXAS CAROLYN SELLERS DEPUTY CAUSE NO. DC-22-04656 ALBERT C. BLACK III, as TRUSTEE OF PM SETTLEMENT TRUST and SUBSTITUTE PLAINTIFF ON BEHALF OF PENNY HAAB MOORE, CHRISTA PETRUSA, JOSEPH PETRUSA, THE KAREN THOMAS FAMILY TRUST, ALBEAZUL, LLC, JEFF WENDEL, JAMES DUDOVICK, ADRIANA VAN HEMERT, RICARDO YANEZ, THE ESTATE OF MALCOM R. DILLON, JOSE GUERRO, SHARON MILLER, TERRY SCHACKOW, DEBRA SUE TAYLOR, JOHN RENTERIA, NOTICE OF FILING OF DMAR FINANCIAL CORP., JONATHON M. NOTICE OF REMOVAL HICKS, NANCY SMITHERMAN, ANDREA LEDBETTER and TED WILSON and others similarly situation, and as Wind-Up Agent of PetroRock Mineral Holdings, LLC, Plaintiff, v. STEFAN T. TOTH, 2X5 ENTERPRISES LIMITED PARTNERSHIP, THE 2X5, LLC, HOMEBOUND RESOURCES, LLC, RESOLUTE CAPITAL PARTNERS LTD, LLC; RESOLUTE CAPITAL ADVISORS, LLC; RESOLUTE CAPITAL MANAGEMENT SERVICES, LLC; THOMAS J. POWELL, POWELL I.P, LLC; MOUNTAIN HIGH CAPITAL, LLC; MOUNTAIN HIGH CAPITAL MANAGEMENT LLC; STRATEGIC ENERGY ASSETS, LLC; TENACITY HOLDING COMPANY LLC; TIBURON HOLDINGS; RESOLUTE CAPITAL MANAGERS, LLC; RCP-LTD., LLC; RCMG, LLC; RESOLUTE ENERGY CAPITAL, LLC; FOX-IP, LLC; LOVE 2 LIVE, LLC; LOVE 2 LIVE HOLDINGS, INC.; STEFAN TOTH FAMILY TRUST; CONSTANTINE CAPITAL, LLC; HOMEBOUND FINANCIAL GROUP, LP; TED ETHEREDGE; JACQUELINE KUIPER; CANDACE POWELL; LEONARD TOTH; HOMEBOUND ENERGY, LLC; HOMEBOUND, LLC; PETROROCK PRODUCTION HOLDINGS, LLC; TOTH INVESTMENTS, LLC; FELFRAN INVESTMENTS, LLC; FRTR REALTY COMPANY, LLC; HOMEBOUND CONSTRUCTION SERVICES, LLC; PETROROCK PIPELINE & SWD, LLC; TPS ENERGY, LLC; TPS ENERGY 2, LLC; TPS REALTY, LLC; MINERVA MIDSTREAM, LLC; MINERVA MIDSTREAM MANAGEMENT, LLC; CRUDE ANC, LLC; FLINT ROCK MARKETING, LLC; N MASTER HOLDINGS, LLC; RIVERFRONT MINERALS, LLC; ELM CAPITAL, LLC; JLTH AT NORTH GP, LLC; EDERVILLE PARK TOWNHOMES, LLC; and MCKENNY 90 TOWNHOMES, LLC Defendants. Defendants Resolute Capital Partners Ltd., LLC, Resolute Capital Managers, LLC, and Resolute Management Services, LLC files its Notice of Filing of Notice of Removal as follows: 1. Attached to this notice as Exhibit A is a true and correct copy of the Notice of Removal of this case to the United States District Court for the Northern District of Texas, filed December 8, 2023. The notice of filing of Notice of Removal also will serve to cause the full removal of this case to federal court, pursuant to 28 U.S.C. § 1332, precluding this Court from further proceedings in this cause unless and until the action is remanded. 2 Dated: December 8, 2023. Respectfully submitted, By: /s/ Charles E. Jones CHARLES E. JONES charles.jones@lawmoss.com MATTHEW R. BURTON Pro Hac Vice Motion to be Filed matthew.burton@lawmoss.com MOSS & BARNETT, P.A. 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 (612) 877-5000 (612) 877-5999 (fax) and By: /s/ Matthew E. Last DANIEL D. TOSTRUD State Bar No. 20146160 dtostrud@cobbmartinez.com MATTHEW E. LAST State Bar No. 24054910 mlast@cobbmartinez.com COBB MARTINEZ WOODWARD PLLC 1700 Pacific Avenue, Suite 3100 Dallas, Texas 75201 (214) 220-5224 (214) 220-5299 (Fax) COUNSEL FOR DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD AND RESOLUTE CAPITAL MANAGERS LLC 3 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served either by e-service, e-mail, facsimile or certified mail return receipt requested to all counsel of record on this 8th day of December, 2023. /s/ Matthew E. Last MATTHEW E. LAST 8918459v1 4 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 1 of 9 PageID 1 IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS Exhibit A ALBERT C. BLACK III, as TRUSTEE OF COURT FILE NO. _________ PM SETTLEMENT TRUST and SUBSTITUTE PLAINTIFF ON BEHALF OF PENNY HAAB MOORE, CHRISTA PETRUSA, JOSEPH PETRUSA, THE KAREN THOMAS FAMILY TRUST, ALBEAZUL, LLC, JEFF WENDEL, NOTICE OF REMOVAL OF JAMES DUDOVICK, ADRIANA VAN DEFENDANTS RESOLUTE HEMERT, RICARDO YANEZ, THE CAPITAL PARTNERS LTD., ESTATE OF MALCOM R. DILLON, RESOLUTE CAPITAL MANAGERS, JOSE GUERRO, SHARON MILLER, LLC AND RESOLUTE TERRY SCHACKOW, DEBRA SUE MANAGEMENT SERVICES, LLC TAYLOR, JOHN RENTERIA, DMAR FINANCIAL CORP., JONATHON M. HICKS, NANCY SMITHERMAN, ANDREA LEDBETTER and TED WILSON and others similarly situation, and as Wind-Up Agent of PetroRock Mineral Holdings, LLC, Plaintiff, v. STEFAN T. TOTH, 2X5 ENTERPRISES LIMITED PARTNERSHIP, THE 2X5, HOMEBOUND RESOURCES, LLC, RESOLUTE CAPITAL PARTNERS LTD, LLC; RESOLUTE CAPITAL ADVISORS, LLC; RESOLUTE CAPITAL MANAGEMENT SERVICES, LLC; THOMAS J. POWELL, POWELL I.P, LLC; MOUNTAIN HIGH CAPITAL, LLC; MOUNTAIN HIGH CAPITAL; MANAGEMENT LLC; STRATEGIC ENERGY ASSETS, LLC; TENACITY HOLDING COMPANY LLC; TIBURON DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. AND RESOLUTE CAPITAL MANAGERS LLC’S NOTICE OF REMOVAL PAGE 1 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 2 of 9 PageID 2 HOLDINGS; RESOLUTE CAPITAL MANAGERS, LLC; RCP-LTD., LLC; RCMG, LLC; RESOLUTE ENERGY CAPITAL, LLC; FOX-IP, LLC; LOVE 2 LIVE, LLC; LOVE 2 LIVE HOLDINGS, INC.; STEFAN TOTH FAMILY TRUST; CONSTANTINE CAPITAL, LLC; HOMEBOUND FINANCIAL GROUP, LP; TED ETHEREDGE; JACQUELINE KUIPER; CANDACE POWELL; LEONARD TOTH; HOMEBOUND ENERGY, LLC; HOMEBOUND, LLC; PETROROCK PRODUCTION HOLDINGS, LLC; TOTH INVESTMENTS, LLC; FELFRAN INVESTMENTS, LLC; FRTR REALTY COMPANY, LLC; HOMEBOUND CONSTRUCTION SERVICES, LLC; PETROROCK PIPELINE & SWD, LLC; TPS ENERGY, LLC; TPS ENERGY 2, LLC; TPS REALTY, LLC; MINERVA MIDSTREAM, LLC; MINERVA MIDSTREAM MANAGEMENT, LLC; CRUDE ANC, LLC; FLINT ROCK MARKETING, LLC; N MASTER HOLDINGS, LLC; RIVERFRONT MINERALS, LLC; ELM CAPITAL, LLC; JLTH AT NORTH GP, LLC; EDERVILLE PARK TOWNHOMES, LLC; and MCKENNY 90 TOWNHOMES, LLC Defendants. Defendants Resolute Capital Partners Ltd., LLC, Resolute Capital Managers, LLC, and Resolute Management Services, LLC, by and through their undersigned counsel, as NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 2 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 3 of 9 PageID 3 and for their Notice of Removal pursuant to 28 U.S.C. §§1441(a), 1446, and 1453(b) and the Class Action Fairness Act, 28 U.S.C. § 1332(d), and in support thereof, state as follows: 1. Resolute Capital Partners Ltd., LLC (“RCP”) is a Nevada limited liability company. Resolute Capital Managers, LLC (“RCM”) is a Nevada limited liability company. Resolute Management Services, LLC (“RMS”) is a Delaware limited liability company. 2. This Notice of Removal concerns a lawsuit (the “Action”) pending in the District Court for Dallas County, Texas. The Action, which arose out of a wind-up proceeding involving a Texas company called PetroRock Mineral Holdings, LLC, has a complex procedural history. 3. The Action was commenced on or about May 3, 2022, with the filing of a Petition seeking the appointment of an agent to wind up the affairs of PetroRock. (Ex. A.) This Petition alleged a securities fraud in excess of $200 million. (Id., par. 14.) 4. The Action was initially captioned PetroRock Mineral Holdings, LLC v. Minerva Resources LLC, Mercury Operating, LLC, Stefan T. Toth, 2x5 Enterprises Ltd. Partnership, The 2x5, LLC, and Cronus Mineral Holdings, LLC, Cause No. DC-22-04656. (Id.) 5. RCP, RCM, and RMS were not named as defendants in this Petition. NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 3 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 4 of 9 PageID 4 6. On or about May 25, 2022, a Petition in Intervention was filed in the Action on behalf of certain persons who sought relief based upon their status as “Secured Investors” in PetroRock. (Ex. B.) These Secured Investors included persons from Florida, Ohio, Wisconsin, California, Illinois, Indiana, and other states. (Id., pars. 8-24.) 7. RCM and RMS were not identified or named as parties in this Petition in Intervention. RCP was identified in this Petition in Intervention, but it was not named as a party defendant. The May 22, 2022 Petition was not served upon RCP. 8. Subsequent Petitions and Amended Petitions were filed in the Action by other groups of PetroRock investors from other states, including a July 28, 2022 amended petition that asserted class action claims against PetroRock. (See Ex. C (April 21, 2023 Order), p. 2.) 9. RCP was named as a party defendant in the caption of some of these Petitions. However, none of these Petitions was served on RCP; likewise, none of them was served on either RCM or RMS. 10. On or about June 27, 2022, the Court in the Action entered an Order appointing Albert C. (Tre) Black III as the Wind-Up Agent over PetroRock. (Ex. D.) 11. A partial settlement of many of the investors’ claims was reached in September 2022. This settlement resolved (or at least purported to resolve) the investors’ claims against PetroRock. This settlement also envisioned the creation of a Trust (later NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 4 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 5 of 9 PageID 5 denominated the “PM Settlement Trust”) to pursue claims on behalf of the investors against entities and persons allegedly liable for PetroRock’s insolvency. (See Ex. C, p. 2.) 12. On November 15, 2022, the Court entered an Amended Order Preliminarily Certifying Class for Settlement Purposes. (See Ex. C, p. 2; see also Ex. G, (Consolidated Amended Petition), ¶ 3.) 13. On April 21, 2023, the Court entered a final Amended Order Certifying Class and Final Approval of Settlement dated (“Class Approval Order”). (Ex. C.) Among other things, the Class Approval Order certified a Settlement Class, as follows: 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. (Ex. C, p. 7.) This Order states that the class consists of more than 1,000 people. (Id., p.3.) 14. Based on the best information currently available to RCP, RCM, and RMS, less than fifteen percent of the members of the class are residents of Texas. 15. Also in the Class Approval Order, the Court confirmed that the members of the class assigned their claims to a liquidating trust, the PM Settlement Trust. (Ex. C, p. 5.) 16. The Class Approval Order appointed Wind-Up Agent Black as Trustee of the PM Settlement Trust. Based on this Order, Black asserts that he has standing and authority to pursue claims on behalf of the class, and (as noted below) on September 22, 2023, Black filed a Consolidated Amended Petition asserting those claims. (Ex. G, ¶ 5.) NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 5 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 6 of 9 PageID 6 17. On or about September 14, 2023 (before the filing of the Consolidated Amended Petition), Stefan Toth and an entity known as Homebound Resources, LLC (both of which were original defendants in the Action) filed a joint Answer in the Action. (Ex. E.) 18. On or about September 15, 2023, Defendants Toth and Homebound filed their Crossclaim against parties including RCP, RCM, and RMS. (Ex. F.) This Crossclaim was served upon RCP, RCM, and RMS on or about October 9 and 11, 2023. Counsel for Defendants Toth and Homebound have agreed to an extension of time to Answer the Crossclaim until December 15, 2023. 19. On or about September 22, 2023, Black (in his capacities as the Trustee of the PM Settlement Trust and as the Wind-Up Agent) filed a Consolidated Amended Petition (“CAP”). (Ex. G.) 20. In the CAP, Black asserts securities-fraud claims against RCP, RCM, and RMS (and many other defendants) on behalf of the previously-certified class of investors. (See Ex. G, ¶¶ 2-5 (summarizing procedural history, including the April 21, 2023 Class Action Order and asserting that Black has the authority to sue on behalf of the certified class).) 21. On or about November 10, 2023, counsel for RCP, RCM, and RMS agreed to accept service of the CAP on RCP, RCM, and RMS. Accordingly, November 10, 2023 NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 6 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 7 of 9 PageID 7 was the first day on which a pleading asserting class-action claims against these removing parties, RCP, RCM, and RMS, was served on these removing parties. 22. As set forth above, and pursuant to 28 U.S.C. § 1332(d), this matter involves a class of more than 100 persons, the amount in controversy exceeds $5 million, at least one class member is from a state different than the removing parties, RCP, RCM, and RMS, and less than fifteen percent of the members of the class are residents of Texas. WHEREFORE, Defendants Resolute Capital Partners Ltd., LLC, Resolute Capital Managers, LLC, and Resolute Management Services LLC respectfully request that this case proceed in this Court as an action properly removed to it. Dated: December __, 2023. Respectfully submitted, By: /s/ Charles E. Jones CHARLES E. JONES charles.jones@lawmoss.com MATTHEW R. BURTON Pro Hac Vice Motion to be Filed matthew.burton@lawmoss.com MOSS & BARNETT, P.A. 150 South Fifth Street, Suite 1200 Minneapolis, MN 55402 (612) 877-5000 (612) 877-5999 (fax) and By: /s/ Matthew E. Last DANIEL D. TOSTRUD NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 7 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 8 of 9 PageID 8 State Bar No. 20146160 dtostrud@cobbmartinez.com MATTHEW E. LAST State Bar No. 24054910 mlast@cobbmartinez.com COBB MARTINEZ WOODWARD PLLC 1700 Pacific Avenue, Suite 3100 Dallas, Texas 75201 (214) 220-5224 (214) 220-5299 (Fax) COUNSEL FOR DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD AND RESOLUTE CAPITAL MANAGERS LLC NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 8 Case 3:23-cv-02701-G Document 1 Filed 12/08/23 Page 9 of 9 PageID 9 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing document was served either by e-service, e-mail, facsimile or certified mail return receipt requested to all counsel of record on this 8th day of December, 2023. /s/ Matthew E. Last MATTHEW E. LAST 8822664v1 NOTICE OF REMOVAL OF DEFENDANTS RESOLUTE CAPITAL PARTNERS LTD. LLC, RESOLUTE CAPITAL MANAGERS, LLC AND RESOLUTE MANAGEMENT SERVICES, LLC PAGE 9 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 1 of 39 PageID 10 EXHIBIT A FILED 6 CIT ESERVE 5/2/3252??ng Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 2 of 39 PageID 11 DISTRICT CLERK DALLAS CO., TEXAS Paula Mountique DEPUTY DC-22-04656 CAUSE N0. §§§§§§§§§§§§§§§§ PETROROCK MINERAL HOLDINGS, IN THE DISTRICT COURT LLC, Plaintiff, v. MINERVA RESOURCES, LLC, DALLAS COUNTY, TEXAS MERCURY OPERATING, LLC, STEFAN T. TOTH, 2X5 ENTERPRISES LIMITED PARTNERSHIP, THE 2X5, LLC, and CRONUS MINERAL HOLDINGS, LLC, 101st Defendants. JUDICIAL DISTRICT PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF Plaintiff PetroRock Mineral Holdings, LLC and/or “PetroRock”) files this Original Petition for Court Supervised Wind Up and Related Relief (the against Defendants Minerva Resources, LLC Mercury Operating, LLC (“Mercury”), Stefan T. Toth (“M”), 2x5 Enterprises Limited Partnership (“2x5 LP”), The 2x5, LLC (“2x5 GP”), and Cronus Mineral Holdings, LLC (“Cronus”) (collectively, Minerva, Mercury, Toth, 2X5 LP, 2x5 GP, and Cronus may be referred to as the “Defendants”), and in support thereof would respectfully show the Court as follows: I. DISCOVERY CONTROL PLAN AND RULE 47 STATEMENT l. Plaintiff intends to conduct discovery under Level 2 of the Texas Rule of Civil Procedure 190.3. 2. This suit seeks monetary relief exceeding $1 million as well as non-monetary relief. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 1 4886-8316-3422v.6 020927.00001 Page 1 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 3 of 39 PageID 12 II. PARTIES 3. Plaintiff PetroRock Mineral Holdings, LLC is a Texas limited liability company with a principal place of business located at 6321 Campus Circle Drive E, Irving, Texas, 75063. 4. Defendant Minerva Resources, LLC is a Texas limited liability company with a principal place of business located at 433 E. Las Colinas B1Vd., Suite 840, Irving, TX 75039. Defendant Minerva Resources, LLC may be served with process by serving its registered agent, Pablo Cortez, 433 E. Las Colinas Blvd., Suite 840, Irving, TX 75039. 5. Defendant Mercury Operating, LLC is a Texas limited liability company with a principal place of business located at 6321 Campus Circle Dr. E., Irving, TX 75063. Defendant Mercury Operating, LLC may be served with process by serving its registered agent, Phillip E. Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243. 6. Defendant Stefan T. Toth is an individual residing in Collin County, Texas and may be served at 5942 Haley Way, Frisco, Texas 75034, or wherever he may be found. 7. Defendant 2x5 Enterprises Limited Partnership is a Texas limited partnership with a principal place of business located at 1504 Glenmeade Court, Keller, TX 76262. Defendant 2x5 Enterprises Limited Partnership may be served with process by serving its registered agent, Phillip E. Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243. 8. Defendant The 2x5, LLC is a Texas limited liability company with a principal place of business located at 1504 Glenmeade Court, Keller, TX 76262. Defendant The 2x5, LLC may be served with process by serving its registered agent, Phillip E. Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243. Defendant The 2x5, LLC is the general partner of Defendant 2x5 Enterprises Limited Partnership. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 2 4886-8316-3422v.6 020927.00001 Page 2 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 4 of 39 PageID 13 9. Defendant Cronus Mineral Holdings, LLC is a Texas limited liability company with a principal place of business located at 6321 Campus Circle Dr. E., Irving, TX 75063. Defendant Cronus Mineral Holdings, LLC may be served with process by serving its registered agent, Phillip E. Cannatti, 8330 LBJ Frwy #741, Dallas, Texas 75243. III. JURISDICTION AND VENUE 10. This Court has jurisdiction over this matter because the amount in controversy exceeds the minimum jurisdictional requirements. 1 1. Venue is proper in Dallas County, Texas because all or a substantial part of the acts or omissions forming the basis of this suit occurred in Dallas County, Texas, under Section 15.002(a)(l) of the Texas Civil Practice & Remedies Code. IV. BACKGROUND 12. Plaintiff is at the center of an alleged securities fraud involving in excess of $200 million of investor funds. Plaintiff therefore seeks this Court’s assistance and supervision to wind up its business and liquidate its assets for the benefit of its creditors. Under Texas law: on application of a domestic entity or an owner or member of a domestic entity, a court may: (l) supervise the winding up of the domestic entity; (2) appoint a person to carry out the winding up of the domestic entity; and (3) make any other order, direction, or inquiry that the circumstances 1 may require. l3. Following the filing of this Petition, Plaintiff will file an application with the Court to appoint a neutral third-party “Wind Up Representative” to carry out the winding up of its business. The Wind Up Representative, among other things, will collect and conduct an orderly 1 Tex. Bus. Orgs. Code § 11.054. PLAINTIFF’s ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 3 4886-8316-3422v.6 020927.00001 Page 3 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 5 of 39 PageID 14 liquidation of Plaintiff’ s assets, including any causes of action the liquidation of which Will benefit Plaintiffs creditors. A. The Alleged Securities Fraud 14. Beginning in 2016, Resolute Capital Partners LTD, LLC (“fl”) and Homebound Resources, LLC (“Homebound”) raised approximately $200 million from investors through various entities described in more detail below (the “Debt Funds”): Offering Open Date Money Raised HBR VI May 2016 $3,200,000 SEA III November 2016 $3,750,000 PRMH Lenders Fund April 2017 $20,008,750 PRMH Lenders Fund II May 2017 $19,491,250 PRMH Lenders Fund III November 2017 $20,529,000 PRMH Lenders Fund IV December 2017 $21,643,000 Choice Energyl January 2018 $13,418,000 Legacy Energy March 2018 $39,702,000 Legacy Energy II May 2018 $7,454,517 Choice Energy II July 2018 $13,134,600 Choice Energy III August 2018 $37,673,764 TOTAL $200,004,881 15. On or about September 24, 2021, the Securities and Exchange Commission (the “fl’? issued its Order Instituting Administrative and Cease-and—Desist Proceedings, Pursuant t0 Section 8A of the Securities Act of] 933, Sections 15(1)) and 21C of the Securities Exchange Act of 1934, and Section 203m of the Investment Advisors Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and—Desist Order (the “SEC Order”)2 against RCP, Homebound, Toth, and Thomas J. Powell (“Powell”). 2 A true and correct copy of the SEC Order is attached hereto as Exhibit A. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 4 4886-8316-3422v.6 020927.00001 Page 4 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 6 of 39 PageID 15 16. Powell is the owner of RCP and other related entities, serving as RCP’s Senior Managing Partner. Powell was also the owner and Chief Executive Officer of Resolute Capital Advisors, LLC, a previously-registered SEC investment advisor. Powell is actively cooperating in Plaintiff’s efforts to wind up Plaintiff’s business for the benefit of its creditors. 17. Toth is the founder, co-owner, Chairman, President, and Chief Executive Officer of Homebound Financial Group (“fl”). Toth also operates and controls HFG’s subsidiaries, including Homebound and, until recently, Plaintiff. Unlike Powell, Toth has been less than cooperative in Plaintiff’ s efforts to repay its creditors. 18. Each of the Debt Funds is a subsidiary of Plaintiff. Under Toth’s leadership, the Debt Funds issued promissory notes to the investors, and then they would lend the investors’ funds to Plaintiff, which in turn would issue promissory notes to the Debt Funds along with unconditional guarantees. The investors were led to believe Plaintiff would use their fimds to acquire oil and gas leases, fund business operations and investments, and make interest payments on Plaintiff’s debt. Investors were also led to believe Plaintiff would pledge oil and gas collateral sufficient to secure the debt. 19. In reality, however, only a fraction of the funds were used to purchase oil and gas assets, and Toth caused the diversion of investor funds to related-party transactions for which the investors received no conceivable benefit. Thus, the value of the assets falls far short of what Toth led investors to expect. B. Toth Diverts Investor Funds for Defendants’ Benefit 20. For those oil and gas interests Toth actually caused Plaintiff to acquire, he engaged one of his affiliated entities, Defendant Mercury, to serve as operator. Toth indirectly owns and controls Mercury through various entities, including HFG and Love 2 Live Holdings, Inc. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 5 4886-8316-3422v.6 020927.00001 Page 5 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 7 of 39 PageID 16 21. According to Plaintiff’s books and records (prepared under Toth’s control), Plaintiff allegedly owes Mercury more than $23 million. But Plaintiff disputes that this represents a legitimate debt. Upon information and belief, for example, Toth caused Mercury to charge Plaintiff exorbitant and illegitimate fees in order to bleed Plaintiff dry of investor funds. 22. Equally if not even more egregious, upon information and belief, Toth caused Plaintiff to sell oil and gas assets originally purchased with investor funds, and then he diverted the proceeds to another one of his affiliated entities, Defendant Minerva. Toth indirectly holds 100% of the voting units in Minerva through various entities, including Minerva Resources Management, LLC and Cronus Mineral Holdings, LLC.3 23. Minerva then used the proceeds of Plaintiff s assets to purchase oil and gas interests of its own. Upon information and belief, such interests are producing in paying quantities and are being operated by legitimate third-party operators such as Conoco. As part of these proceedings, Plaintiff intends to seek a constructive trust over such assets for the benefit of its creditors, as well as any other appropriate relief against Defendants. 24. Similarly, Toth caused Plaintiff and/or Defendant Minerva to grant overriding royalty interests (“M”) to various affiliates, including Defendants 2X5 LP and Cronus. Plaintiff likewise intends to seek a constructive trust over any ORRIs fairly traceable to investor funds, as well as any other appropriate relief. 25. Since the first of this year, Minerva has diverted in excess of $3 million to insiders and/or for their own overhead. Plaintiff makes these allegations as mere examples of Defendants’ 3 For the avoidance of doubt, Powell indirectly holds non-voting membership interests in Minerva, but without the right to vote he lacks any authority over Minerva’s operations. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 6 4886-8316-3422v.6 020927.00001 Page 6 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 8 of 39 PageID 17 misconduct. There is little doubt that, assuming the Court appoints the Wind Up Representative as requested herein, such individual’s investigation will uncover more. C. Efforts to End the Ongoing Fraud and Repav Investors 26. After the SEC included RCP and Powell as parties to the SEC Order, RCP and Powell resolved to clear their names and make amends. Through a series of transactions in 2021, RCP and Powell took control of Plaintiff through an affiliated entity, Resolute Energy Capital, LLC (“fl”). REC is the current and sole manager of Plaintiff, with exclusive authority to manage Plaintiff’s business. REC also manages the Debt Funds. 27. REC caused Plaintiff to retain the undersigned counsel to pursue this court- supervised wind up. REC also caused Plaintiff to retain CR3 Partners, LLC (“m”), a nationally- recognized turnaround advisory firm. REC intends to exercise its management authority to terminate Toth’s remaining management interests (to the extent he retained any) and to appoint CR3’s Greg Baracato as Plaintiff’s Chief Restructuring Officer. Mr. Baracato has experience and expertise in the oil & gas industry. 28. Under Toth’s leadership, Plaintiff and Defendants Mercury and Minerva shared office space. One of CR3’s first objectives was to procure Plaintiff’s books and records from that office. While Defendants have cooperated to some extent, it appears their recordkeeping vis-a-vis Plaintiff fell short of reasonable expectations for a multi-hundred-million-dollar enterprise. Toth in particular has refused to respond to CR3’s and the undersigned counsel’s reasonable requests for information. 29. Plaintiff intends to terminate Defendant Mercury’s role as operator of certain oil and gas interests held by Plaintiff, and Plaintiff does not necessarily expect Mercury to react positively nor to cooperate fully in the transition to a new operator. Plaintiff therefore requires PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 7 4886-8316-3422v.6 020927.00001 Page 7 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 9 of 39 PageID 18 this Court’s assistance not only with Winding up its affairs but also with procuring the information and cooperation necessary to effectuate a successful liquidation for the benefit of creditors. V. PETROROCK LIOUIDATION & APPOINTMENT OF WIND-UP REPRESENTATIVE 30. The foregoing paragraphs of the Petition are incorporated here by reference. 31. Pursuant to Tex. Business Organizations Code § 11.054, and subject to the other provisions of the code: on application of a domestic entity or an owner or member of a domestic entity, a court may: (l) supervise the Winding up of the domestic entity; (2) appoint a person to carry out the winding up of the domestic entity; and (3) make any other order, direction, or inquiry that the circumstances may require.4 32. For example, in 2014 the 68th Judicial District Court of Dallas County appointed a wind-up representative to carry out the winding-up of a business, with authority to do “any and all acts. . .to accomplish the required Winding-up of the business and affairs.” The order vested the wind-up representative in that matter with numerous responsibilities on behalf of the business, including, but not limited to: collecting assets, monies, securities, accounts, contracts, leases, properties, and tangible and intangible personal/real property.6 4 See Tex. Business Organizations Code § 11.054. 5 See Order Appointing Wind-Up Representative in Cause No. DC-l 1-04730, dated November 7, 2014 and attached hereto as Exhibit B. 6 Id. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 8 4886-8316-3422v.6 020927.00001 Page 8 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 10 of 39 PageID 19 33. Now, Plaintiff seeks to have a Wind-up representative appointed in this matter with similar authority. Specifically, Plaintiff will file a separate application asking this Court to grant all necessary and appropriate powers, including, Without limitation, the following: a. immediately take and maintain possession and control of all real and personal property of PetroRock; take and maintain possession of all documents, books, records, papers and accounts of and relating to PetroRock; exclude Toth, his entities, and their agents, servants and employees, wholly fiom access to PetroRock’s property; retain a professional to perform an accounting of PetroRock’s finances; cease to carry on the business of PetroRock, except to the extent necessary to wind up such business; pay legitimate creditors of PetroRock as required by law; sell PetroRock’s property to the extent that the property is not to be distributed in kind; and perform any other acts as ordered by the Court and/or that are required to wind up the business and affairs of PetroRock. 34. Further, Tex. Business Organizations Code § 11.054(3) permits the Court to “make any other order, direction, or inquiry that the circumstances may require.”7 VI. CONSTRUCTIVE TRUST 35. The foregoing paragraphs of the Petition are incorporated here by reference. 36. In Texas, a plaintiff seeking a constructive trust must prove (i) that the defendant acquired property from the plaintiff through breach of trust or fraud; (ii) that allowing the defendant to retain the property would unjustly enrich him; and (iii) that the defendant currently possesses the plaintiff‘s property or its traceable product. 7 See Tex. Business Organizations Code § 11.054. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 9 4886-8316-3422v.6 020927.00001 Page 9 of Pa? 7 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 11 of 39 PageID 20 37. As discussed above, Toth and the other Defendants breached positions of trust in order to enrich themselves. These breaches resulted in Defendants’ unjust enrichment from investors’ funds and the proceeds and products thereof. Defendants continue to possess investors’ funds and the proceeds and products thereof and refuse to return them to Plaintiff for the benefit of rightful creditors. 38. Accordingly, Plaintiff seeks the imposition of a constructive trust over all funds and property currently in Defendants’ possession or control that is fairly traceable to investors’ funds. VII. AN CILLARY RELIEF 39. The foregoing paragraphs of the Petition are incorporated here by reference. 40. To the extent necessary to achieve the goal of an orderly liquidation and Wind up for the benefit of Plaintiff’s creditors, Plaintiff intends to seek ancillary relief as appropriate. 41. Plaintiff will seek declaratory relief, for example, when necessary to settle any disputes over the parties’ relative rights under Tex. Civ. Prac. & Rem. Code ch. 37. 42. Plaintiff will also seek temporary and permanent injunctive relief as necessary to ensure Defendants’ cooperation in the process under Tex. Civ. Prac. & Rem. Code ch. 65. 43. Plaintiff may seek the appointment of a receiver or the addition of the powers of a receiver as necessary to collect the assets of the above-described constructive trust pursuant to Tex. Civ. Prac. & Rem. Code ch. 64. 44. Plaintiff will seek, or will assist creditors who wish to intervene and seek, avoidance and recovery of fraudulent conveyances and preferences under Tex. Bus. & Comm. Code ch. 24. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 10 4886-8316-3422v.6 020927.00001 Page 1 O 0 37 Parge Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 12 of 39 PageID 21 45. Plaintiff will seek to recover from Defendants for all breaches of contract, breaches of fiduciary duties, common law fraud, statutory fraud, and all other claims and causes of action for which Defendants are liable to Plaintiff. VIII. CONDITIONS PRECEDENT 46. Plaintiff has performed all conditions precedent to bring this suit. IX. CONCLUSION AND PRAYER WHEREFORE, PREMISES CONSIDERED, Plaintiff PetroRock Mineral Holdings, LLC requests the following relief: A. Upon separate application, appointment of a Wind Up Representative; B. Supervision of the Wind Up Representative’s efforts to Wind up Plaintiff s business and liquidate its assets for the benefit of creditors; C. Imposition of a constructive trust over Defendants’ property to the extent necessary to prevent unjust enrichment; D. Any and all ancillary relief necessary to achieve these goals, including, but not limited to, declaratory relief, injunctive relief, avoidance and recovery of preferences and fraudulent conveyances, recovery on all other claims and causes of action against Defendants; and E. Such other and further relief, both at law and in equity, general and specific, to which Plaintiff proves it is justly entitled. Dated May 3, 2022. PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF 11 4886-8316-3422v.6 020927.00001 Page 0 37 1 1 Parge Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 13 of 39 PageID 22 Respectfully submitted, By: /s/ Dennis L. Roossz'en, Jr. Dennis L. Roossien, Jr. Texas Bar No. 00784873 droossien@munsch.com Julian P. Vasek State Bar No. 24070790 jvasek@munsch.com Claire E. Carroll State Bar No. 24092224 ccarroll@munsch.com MUNSCH HARDT KOPF & HARR, P.C. 500 N. Akard, Suite 3800 Dallas, Texas 75201 (214) 855-7500 (telephone) (214) 855 -75 84 (facsimile) COUNSEL FOR PLAINTIFF PETROROCK MINERAL HOLDINGS, LLC PLAINTIFF’S ORIGINAL PETITION FOR COURT SUPERVISED WIND UP AND RELATED RELIEF Pa e12 4886-8316-3422V.6 020927.00001 Page 12 org 37 Case 3:23-cv-02701-G Document 1-1 Filed 12/08/23 Page 14 of 39 PageID 23 UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release N0. 10987 / September 24, 2021 SECURITIES EXCHANGE ACT OF 1934 Release N0. 93124 / September 24, 2021 INVESTMENT ADVISERS ACT OF 1940 Release N0. 5872 / September 24, 2021 INVESTMENT COMPANY ACT OF 1940 Release N0. 34382 / September 24, 2021 ADMINISTRATIVE PROCEEDING File N0. 3-20597 In the Matter of ORDER 1NSTITUT1NG ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, Resolute Capital Partners LTD, LLC, PURSUANT T0 SECTION 8A OF THE Homebound Resources, LLC, SECURITIES ACT OF 1933, SECTIONS Thomas J. Powell, and 15(b) AND 21C OF THE SECURITIES Stefan T. Toth, EXCHANGE ACT OF 1934, SECTION 9(b) OF THE INVESTMENT COMPANY ACT Respondents. OF 1940, AND SECTION 203(1) OF THE INVESTMENT ADVISERS ACT OE 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE- AND-DESIST ORDER The Securities and Exchange Commission (“SEC” or “Commission”) deems it appropriate and in the public interest that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”) against Resolute Capital Partners LTD, LLC (“RCP”) and Homebound Resources, LLC (“Homebound”); that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act, Sections 15 (b) and 21C of the Securities Exchange Act of 1934 (“Exchange A