Complaint,Petition: NOTZON ADVISORS LIMITED vs. RIO GRANDE E&P MANAGEMENT LLC

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                                CAUSE NO. 2022 23621

NOTZON ADVISORS LIMITED,                             IN THE DISTRICT COURT OF
TALCO PARTNERS II, LLC,

       Plain�ffs

                                                        HARRIS COUNTY, TEXAS

RIO GRANDE E&P MANAGEMENT,
LLC, RIO GRANDE E&P, LLC,
COLUMBUS ENERGY, LLC, and
KILLAM OIL CO., LTD.,
      Defendants.                                     334TH JUDICIAL DISTRICT

                    PLAINTIFFS’ FOURTH MENDED PETITION

      Plain�ffs Notzon Advisors Limited (“Notzon”) and Talco Partners II, LLC

(“Talco”) (collec�vely, the “Plain�ffs”) submit the following fourth amended

pe��on:

                          I. DISCOVERY CONTROL PLAN

      1.     Discovery in this suit should be conducted pursuant to Texas Rule of

Civil Procedure 190.4 (Level 3).

                                   II. PARTIES

      2.     Plain�ff Notzon Advisors Limited is a Bri�sh en�ty formed under the

laws of the United Kingdom with its principal place of business in the United

Kingdom.



                                        1
      3.     Plain�ff Talco Partners II, LLC is a Texas limited liability company with

its principal place of business in Houston, Texas.

      4.     Defendant Rio Grande E&P Management, LLC is a Texas limited liability

company with its principal place of business in Houston, Texas. Rio Grande E&P

Management, LLC has appeared in this case.

      5.     Defendant Rio Grande E&P, LLC is a Texas limited liability company

with its principal place of business in Houston, Texas. Rio Grande E&P, LLC has

appeared in this case.

      6.     Defendants Rio Grande E&P Management, LLC and Rio Grande E&P,

LLC are collec�vely referred to as the “Rio Grande Defendants.”

      7.     Columbus Energy, LLC is a Delaware limited liability company with its

principal place of business in Houston, Texas, and has appeared in this case.

      8.     Defendant Killam Oil Co., Ltd. is a Texas partnership with its principal

place of business in Laredo, Texas, and has appeared in this case.

                           III. JURISDICTION AND VENUE

      9.     Plain�ffs seek monetary relief over $1,000,000. Tex. R. Civ. P. 47(c)(4).

      10.    Because the Plain�ffs seek monetary relief over $1,000,000, the

amount in controversy exceeds the Court’s minimum jurisdic�onal requirements

and the Court has subject mater jurisdic�on over this lawsuit.
        11.   The Court has personal jurisdic�on over the par�es because the

Defendants are Texas residents.

        12.   Venue is proper in Harris County, Texas because, pursuant to Texas

Civil Prac�ce & Remedies Code sec�on 15.035(a), the par�es contracted in wri�ng

that venue would be in Houston, Texas, and, pursuant to Texas Civil Prac�ce &

Remedies Code sec�on 15.002(a)(1), all or a substan�al part of the events or

omissions giving rise to the claim occurred in Harris County, Texas.

                             IV. FACTUAL BACKGROUND

        13.   In 2018, via the Notzon Purchase and Mutual Release Agreement,

dated May 15, 2018, (the “Notzon Contract”) and the Talco Purchase and Mutual

Release Agreement, dated January 22, 2018, as amended via email on May 10,

2018,    (the “Talco Contract”) (collec�vely, the “PMRAs”), the Rio Grande

Defendants granted Plain�ffs contractual rights to, in certain situa�ons, acquire

interests in a) certain wells drilled by the Rio Grande Defendants, and/or b) certain




  On May 10, 2018, Glenn Hart, ac�ng as President and authorized agent of the Rio Grande
Defendants, agreed via email to modify the terms of the Talco Purchase and Mutual
Release Agreement dated January 22, 2018 such that the Rio Grande Defendants would
  ) extend to Talco the same terms as given to Notzon and (b) pay the sum of $15,000.00,
in exchange for Casso’s assistance to the Rio Grande Defendants in securing Notzon’s
execu�on of the Notzon Contract.
wells drilled by all en��es the Rio Grande Defendants owned or controlled (the

“Amplify Rights”).

      14.    Because Columbus Energy, LLC (“Columbus”) was, during points in

�me relevant to this dispute, an “exis�ng or future en�ty owned or controlled by”

the Rio Grande Defendants, Columbus also owes and/or owed Plain�ffs contractual

rights for Plain�ffs to, in certain situa�ons, acquire interests in certain wells

Columbus drills/drilled.

      15.    Via the PMRAs, the Rio Grande Defendants also granted Plain�ffs

contractual rights to acquire interests in property acquired in the future by the Rio

Grande Defendants and/or by all en��es the Rio Grande Defendants owned or

controlled (such property is the “Other Property,” and such rights are the “Other

Property Rights”).

      16.    The PMRAs obligated the Rio Grande Defendants (and by extension,

Columbus) to provide Plain�ffs no�ce of the Rio Grande Defendants’ (and by

extension, Columbus) drilling of certain wells and/or the acquisi�on of property,

and all material informa�on reasonably related to such drilling and/or acquisi�on,

such that Plain�ffs could fairly and properly determine whether to par�cipate in

such wells and/or proper�es via the Amplify Rights and/or Other Property Rights.
      17.    However, on mul�ple occasions, the Rio Grande Defendants failed to

provide Plain�ffs with �mely no�ce and/or failed to provide sufficient informa�on

regarding the acquisi�on of certain property the Rio Grande Defendants acquired

or were going to acquire. These failures prevented Plain�ffs from being able to

fairly and properly evaluate whether to exercise their Other Property Rights.

      18.    Had Plain�ffs known about and/or been provided with the required

informa�on about the property acquisi�ons by the Rio Grande Defendants, as

required by the PRMAs, Plain�ffs would have exercised their Other Property Rights

to acquire interests in that property.

      19.    By way of nonexclusive example, on informa�on and belief, Defendant

Killam Oil Co., Ltd. (“Killam”) entered into an agreement with the Rio Grande

Defendants rela�ng to the acquisi�on of certain property interests by the Rio

Grande Defendants in which Plain�ffs should have had a right to par�cipate via

Plain�ffs’ Other Property Rights (the “AMI Agreement”). This AMI Agreement

acknowledged the existence of Notzon’s Other Property Rights to acquire interests

in these same proper�es. Thus, in the course of Killam’s transac�ons and

nego�a�ons with the Rio Grande Defendants, Killam was well aware of Plain�ffs’

Other Property Rights, but proceeded to transact solely with the Rio Grande

Defendants in a way intended to avoid or negate Plain�ffs’ Other Property Rights
and, thus, negate Plain�ffs’ ability to acquire interests in proper�es and/or to tag

along in the eventual sales of those proper�es (as explained below).

      20.   The PMRAs also gave Plain�ffs “tag along” rights in the event the Rio

Grande Defendants sold or exchanged any property and/or wells in which Plain�ffs

had acquired an interest via Plain�ffs’ Amplify Rights and/or Other Property Rights.

Pursuant to these tag along rights, the Rio Grande Defendants were required to

give Plain�ffs prompt writen no�ce of any proposed sale or exchange along with

all material informa�on concerning the transac�on, so that Plain�ffs could decide

whether to par�cipate in the sale or exchange for Plain�ffs’ pro rata por�ons of the

considera�on paid to the Rio Grande Defendants for those proper�es and/or wells.

      21.   The PMRAs also gave the Rio Grande Defendants “drag along” rights

in the event the Rio Grande Defendants sold or exchanged all or part of their

interest in any property and/or wells in which Plain�ffs also had an interest.

Pursuant to these drag along rights, the Rio Grande Defendants were required to

give Plain�ffs writen no�ce of any such proposed sale or exchange in which

Plain�ffs would be “dragged along,” along with all material informa�on concerning

the transac�on. A�er providing such no�ce and informa�on, Plain�ffs would be

required to sell their pro rata por�ons of such interests to the purchaser in

exchange for Plain�ffs’ pro rata por�ons of the considera�on paid to the Rio
Grande Defendants. On at least one occasion, the Rio Grande Defendants exercised

their drag along rights.

      22.    In early 2022, the Rio Grande Defendants sold Columbus to a third

party. Nevertheless, Plain�ffs’ Amplify Rights to par�cipate in wells drilled by

Columbus under the PMRAs s�ll exist pursuant to the defini�ons, terms, and

condi�ons of the PMRAs. Thus, Columbus maintains the obliga�on to provide

Plain�ffs with the required no�ce and informa�on for any wells Columbus drills,

pursuant to the Amplify Rights of the PMRAs, and Plain�ffs have been and con�nue

to possess these Amplify Rights to par�cipate in any such wells drilled by Columbus.

On informa�on and belief, Columbus has since drilled wells without providing the

proper no�ce and informa�on to Plain�ffs, and thus Plain�ffs have been deprived

of their ability to par�cipate in those wells.

      23.    In early 2022, the Rio Grande Defendants nego�ated a secret deal to

sell or exchange all or part of their interest in property in which Plain�ffs had an

interest (or should have had an interest via the Other Property Rights) without

providing the required no�ce and/or informa�on to Plain�ffs, in breach of the

Plain�ffs’ tag along rights under the PMRAs.

      24.    Some of the property the Rio Grande Defendants sold or exchanged in

this early 2022 transac�on was subject to Plain�ffs’ Other Property Rights allowing
Plain�ffs to acquire interests in property acquired in the future by the Rio Grande

Defendants and/or by all en��es the Rio Grande Defendants owned or controlled.

However, the Rio Grande Defendants failed to provide Plain�ffs all material

informa�on reasonably related to such acquisi�on(s), such that Plain�ffs could

fairly and properly determine whether to par�cipate in such proper�es, when the

Rio Grande Defendants first acquired such interests in property that was later sold

in early 2022.

      25.    Had Plain�ffs known about and/or been provided with the required

informa�on about the property previously acquired by the Rio Grande Defendants,

as required by the terms of the Other Property Rights provisions of the PRMAs,

Plain�ffs would have exercised their rights to acquire interests in that property.

And Plain�ffs would have then exercised their tag along rights when these

proper�es were eventually sold in early 2022.

      26.    Nevertheless, in some situa�ons, the Rio Grande Defendants did

belatedly give Plain�ffs no�ce of proposed property acquisi�ons so that Plain�ffs

could decide whether to exercise their Other Property Rights. Plain�ffs exercised

their Other Property Rights to par�cipate in the acquisi�on of those proper�es.

Later, the Plain�ffs exercised their tag along rights when the Rio Grande

Defendants decided to sell these proper�es in early 2022. Similarly, the Rio Grande
Defendants exercised their drag along rights over these same proper�es when the

Rio Grande Defendants sold these proper�es in early 2022.

      27.   However, on informa�on and belief, the Rio Grande Defendants also

misrepresented and/or ar�ficially lowered the value of Plain�ffs’ interests being

transferred or exchanged in the early 2022 sale.

      28.   Furthermore, on May 15, 2018, in order to induce Notzon to enter into

the Notzon Contract with the Rio Grande Defendants, Glenn Hart, ac�ng as

President and authorized agent of the Rio Grande Defendants, agreed via email

that in the event Plain�ffs were unable to exercise their Other Property Rights in

certain Other Property due to a change of control event, then the Rio Grande

Defendants would give Plain�ffs the right to par�cipate in 10% of a) that certain

Other Property and/or b) in exis�ng or new ventures that would own that certain

Other Property (that certain Other Property is the “New Venture Other Property,”

and the 10% right to par�cipate is the “New Venture Other Property Rights”) (the

“Inducement Agreement”). These New Venture Other Property Rights existed (and

will s�ll exist) as long as Glenn Hart con�nued with the exis�ng venture or new

energy venture that owned that New Venture Other Property.




Including Talco by way of extension, via email on May 10, 2018.
      29.   Upon informa�on and belief, a change of control event per the PMRAs

and/or the Inducement Agreement occurred via the crea�on of Rio Grande E&P II,

LLC (“Rio Grande II”), of which Glenn Hart is an owner and/or officer, and through

which Glenn Hart and other owners and/or officers of the Rio Grande Defendants

have con�nued to operate. Plain�ffs thus have New Venture Other Property Rights

in Rio Grande II and/or any New Venture Other Property that Rio Grande E&P II

owns due to this change of control and con�nued opera�ons. Plain�ffs therefore

have a right to par�cipate in 10% of Rio Grande E&P II and/or any New Venture

Other Property that Rio Grande E&P II owns, pursuant to the Inducement

Agreement. However, in viola�on of the Inducement Agreement, the Rio Grande

Defendants did not give Plain�ffs no�ce of the crea�on of Rio Grande E&P II or any

New Venture Other Property it owns. Therefore, Plain�ffs were unable to exercise

their New Venture Other Property Rights in Rio Grande E&P II or any New Venture

Other Property it owns.

                                CAUSES OF ACTION

      30.   Plain�ffs re incorporate the previous paragraphs as if fully restated

herein.
                           Breach of Contract PMRAs
                            (Rio Grande Defendants)

      31.   The Rio Grande Defendants failed to abide by their obliga�ons in the

PMRAs regarding the Other Property Rights in the PMRAs. Thus, the Rio Grande

Defendants breached the PMRAs by failing to provide Plain�ffs with the required

no�ces and/or informa�on for certain wells they drilled and/or property interests

they acquired, and by entering into transac�ons purpor�ng to sell or exchange

interests owned by Plain�ffs (or that should have been owned by Plain�ffs had the

Rio Grande Defendants properly no�ced or provided informa�on to Plain�ffs)

without giving Plain�ffs the required tag along and/or drag along no�ce or

informa�on and/or without paying Plain�ffs their pro rata por�ons of the

considera�on paid.

      32.   These breaches caused Plain�ffs substan�al damage because they

prevented Plain�ffs from par�cipa�ng in these interests via the Other Property

Rights and/or deprived Plain�ffs of their pro rata value of the considera�on paid to

Rio Grande for such interests when they were eventually sold to others.

      33.   Alterna�vely, if the Rio Grande Defendants, by entering into

transac�ons purpor�ng to sell property owned by Plain�ffs or that should have

been owned by Plain�ffs, somehow ex�nguished Plain�ffs Amplify Rights and/or
Other Property Rights, then Plain�ffs are en�tled to the value of such rights that

were terminated without Plain�ffs’ consent.

      34.   All condi�ons precedent to Plain�ffs’ rights of recovery have been

performed or occurred.

               Breach of Contract – New Venture Other Property
                           (Rio Grande Defendants)

      35.   During a phone call on May 15, 2018, Glenn Hart, acting as President

and authorized agent for the Rio Grande Defendants, offered the terms of the

Inducement Agreement to Notzon. That same afternoon, Notzon sought

confirmation from Glenn Hart regarding the terms of the Rio Grande Defendants’

offer via email. Glenn Hart, acting as President and authorized agent for the Rio

Grande Defendants, confirmed and accepted the terms of the offer regarding the

Inducement Agreement. In acceptance and in consideration of same, Notzon

signed and returned the executed Notzon Contract      thereby also accepting the

terms of the Inducement Agreement, and establishing a meeting of the minds as to

the definitive terms of the Inducement Agreement

      36.   Pursuant to the May 10, 2018 email agreement between Talco and

Glenn Hart, ac�ng as President and authorized agent for the Rio Grande
Defendants, Talco was extended those same terms as given to Notzon, and was

thereby also extended the terms of the Inducement Agreement.

      37.   The Rio Grande Defendants failed to abide by their Inducement

Agreement. Specifically, the Rio Grande Defendants breached the Inducement

Agreement by failing to give Plain�ffs the right to exercise their New Venture Other

Property Rights and/or par�cipate in 10% of New Venture Other Property.

      38.   This breach caused Plain�ffs substan�al damage because it deprived

Plain�ffs from enjoying the value of 10% of the New Venture Property. Each

Plain�ff is thus en�tled to recover from the Rio Grande Defendants damages equal

to 5% of the value of New Venture Other Property vis-à-vis Rio Grande E&P

      39.   All condi�ons precedent to Plain�ffs’ rights of recovery have been

performed or occurred.

                Vicarious Liability / Actual or Apparent Authority
                             (Rio Grande Defendants)

      40.    he Rio Grande Defendants are vicariously liable for the conduct, acts

and words of Glenn Hart who was ac�ng within the scope of his actual and/or

apparent authority for the Rio Grande Defendants at the �me he entered into the

Inducement Agreement.
      41.     he Rio Grande Defendants inten�onally conferred authority on Glenn

Hart by appoin�ng him President and informing the world of such, and Glenn Hart

was ac�ng within the scope of the office of the Rio Grande Defendants’ President

when he nego�ated, extended to and confirmed the Inducement Agreement with

Notzon. Glenn Hart was subject to the Rio Grande Defendants’ right of control and

as President, had general and specific authority to act on the Rio Grande

Defendants’ behalf in the nego�a�ons of the PMRAs and the Inducement

Agreement The Rio Grande Defendants benefited from both the Notzon Contract

and Inducement Agreement.

      42.   Alterna�vely, the Rio Grande Defendants affirma�vely held Glenn Hart

out as having authority to act on their behalf in nego�a�ng, extending to and

confirming the Induce Agreement with Notzon and knowingly permited Glenn

Hart to hold himself out as having such authority, and/or the Rio Grande

Defendants acted with such lack of ordinary care as to clothe Glenn Hart with the

indicia of authority. The Rio Grande Defendants caused Notzon to reasonably

believe that Glenn Hart had authority to act on their behalf when he offered,

nego�ated and then agreed to the terms of the Inducement Agreement. Notzon

jus�fiably relied on Glenn Hart’s authority.
                             Declaratory Judgment
                                  (Columbus)

      43.   Pursuant to Texas Civil Prac�ce & Remedies Code § 37.004, Plain�ffs

seek a declara�on from this Court that Plain�ffs s�ll own their Amplify Rights to

par�cipate in certain wells drilled by Columbus pursuant to the PMRAs.

    Declaratory Judgment PMRAs and New Venture Other Property Rights
                         (Rio Grande Defendants)

      44.   Pursuant to Texas Civil Prac�ce & Remedies Code § 37.004, Plain�ffs

seek a declara�on from this Court that Plain�ffs s�ll own their Other Property

Rights and their New Venture Other Property Rights to acquire interests in certain

property acquired by the Rio Grande Defendants and/or by all en��es the Rio

Grande Defendants owned or controlled and/or Rio Grande E&P II, pursuant to the

PMRAs and/or the Inducement Agreement.

              Declaratory Judgment Authority and Authoriza�on
                           (Rio Grande Defendants)

      45.   Pursuant to Texas Civil Prac�ce & Remedies Code § 37.004, Plain�ffs

seek a declara�on from this Court that Glenn Hart was ac�ng within the scope of

his actual and/or apparent authority for the Rio Grande Defendants at the �me he

entered into the Inducement Agreement.

      46.   Pursuant to Texas Civil Prac�ce & Remedies Code § 37.004, Plain�ffs

seek a declara�on from this Court that Glenn Hart was ac�ng as the authorized
agent of the Rio Grande Defendants at the �me he entered into the Inducement

Agreement.

                 Tor�ous Interference with an Exis�ng Contract
                                   (Killam)

      47.    Plain�ffs enjoyed contractual benefits, the Other Property Rights,

owed to them by the Rio Grande Defendants under the PMRAs, as set forth above.

      48.    The AMI Agreement between the Rio Grande Defendants and Killam

and the related transac�ons and other ac�ons between the Rio Grande Defendants

and Killam interfered with the Other Property Rights (and related benefits)

Plain�ffs possessed under the PMRAs.

      49.    Killam was aware of Plain�ffs’ Other Property Rights and, thus, their

right to interests in proper�es acquired by the Rio Grande Defendants (as well as

all en��es the Rio Grande Defendants owned or controlled), yet Killam

nevertheless worked with the Rio Grande Defendants to negate Plain�ffs’ Other

Property Rights via the Rio Grande Defendants’ breach of the PMRAs.

      50.    As a result of the inten�onal and willful ac�ons of Killam (in

conjunc�on with the Rio Grande Defendants) in inducing the Rio Grande

Defendants to breach the PMRAs, Plain�ffs were deprived of their Other Property

Rights to acquire property interests and/or to receive their pro rata por�ons of the
considera�on paid in the sale or exchange such property interests and suffered

substan�al damages as result.

                                     VI. PRAYER

      51.     Because of the various acts of misconduct by the Defendants

described above, Plain�ffs seek the following remedies:

              Declaratory judgment that Plain�ffs s�ll own their Amplify Rights to

              par�cipate in certain wells drilled by Columbus;

            b. Declaratory judgment that Plain�ffs s�ll own their Other Property

              Rights and/or New Venture Other Property Rights to acquire interests

              in certain property acquired by the Rio Grande Defendants and/or by

              all en��es the Rio Grande Defendants owned or controlled and/or Rio

              Grande E&P II, pursuant to the PMRAs and/or the Inducement

              Agreement;

              Actual damages;

            d. Reasonable and necessary atorneys’ fees;

              Prejudgment and post judgment interest at the maximum rates

              allowable by law;

              All costs of court;
And all other relief to which Plain�ffs may be justly en�tled, either at

law or equity.

                         Respec�ully submited,
                         HALL MAINES LUGRIN, P.C.

                         By: /s/ George H. Lugrin, IV
                         George H. Lugrin, IV
                         Texas Bar No. 00787930
                         glugrin@hallmaineslugrin.com
                         Reece Rondon
                         Texas Bar No. 00794559
                         rrondon@hallmaineslugrin.com
                         Jeffrey T. Bentch
                         Texas Bar No. 24055160
                         jbentch@hallmaineslugrin.com
                         Misty Gasiorowski
                         Texas Bar No. 24075830
                         mgasiorowski@hallmaineslugrin.com
                         Williams Tower, 64th Floor
                         2800 Post Oak Blvd.
                         Houston, Texas 77056-6125
                         Tel.: 713.871.9000
                         Fax: 713.871.8962

                         REED SMITH LLP
                         R. Alan York
                         State Bar No. 22167500
                         ayork@reedsmith.com
                         811 Main Street, Suite 1700
                         Houston, Texas 77002
                         Telephone: (713) 469-3800
                         Telecopier: (713) 469-3899

                         Attorneys for Plaintiffs
                            CERTIFICATE OF SERVICE

       I cer�fy that a true and correct copy of the foregoing document was served
on all counsel of record on this 1st day of February 2024, in accordance with the
Texas Rules of Civil Procedure.


                                           /s/ George H. Lugrin IV
                                           George H. Lugrin IV