Trustee objects to XOM/XTO's charge of 80% of settlement: Arbitration
"The trustee has advised XTO Energy that all or a portion of the settlement amount should not be deducted from trust revenues. XTO Energy does not agree with the trustee’s position and to resolve this disagreement XTO Energy initiated arbitration on August 1, 2012 in accordance with the terms of the dispute resolution provisions of the Trust Indenture. The trustee intends to prepare a response to XTO Energy’s arbitration claim within the required time frame. The binding arbitration will be heard by a panel of three arbitrators in Fort Worth, Texas, with each side selecting one arbitrator and the third arbitrator selected by the two appointed arbitrators. The arbitration will be administered by the American Arbitration Association under its commercial rules." from 10-q
Truly a positive development with regards to all three of the lawsuits, and the rightful distribution of profits from well production. Also seems to indicate B of A's intention to fulfill its obligation to act in the unit holders’ best interest, and to concur with our view that the trust didn’t actually benefit from the unjust enrichment. The $200,000 reserved to hire the outside law firm, Knight and Thomson, might end up being very well spent!
BTW, probably, and hopefully a coincidence, but a letter dated 18 July from Helms and Underwood on my behalf demanded the Trustee initiate necessary actions to keep XTO from allocating settlement obligations to the Trust. The two law firms (which should have similar client interests to protect against XTO) talked during the last week of July.
Also still an issue is the possibility of back distributions I suspect may be due to unit holders.
Appears the trustee has listened to unit holders and looked at the facts. It is doubtful they would take this step without having a very good case. I am pleased they have listened and are taking steps to protect the interests of the unit holders.