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Gastar Exploration Inc. Message Board

  • theseriousinvestor theseriousinvestor Dec 22, 2012 7:16 AM Flag

    Why GST will prevail over CHK

    Below is a synopsis of GST's defense, and a very good one I might add, as contained in its latest filing:

    Defendants deny that Plaintiffs are entitled to the relief they seek. Defendants contend that the undisputed facts and the terms of the agreements that the Plaintiffs now seek to rescind demonstrate that Plaintiffs and Defendants were fully aware, at the time of execution of the agreements, of the adverse claim to the mineral interests that now forms the basis of Plaintiffs’ claims of mutual mistake, failure of consideration, and unjust enrichment. Defendants further contend that in the agreements that Plaintiffs now seek to rescind, the parties acknowledged the existence of the adverse claim to the mineral interests and the lawsuit seeking to establish the validity of that claim, agreed that the mineral interests would be acquired subject to and burdened by that adverse claim, and agreed that in the event the adverse claimant prevailed, the Plaintiff that acquired the mineral interests would convey those interests to the adverse claimant. In short, Defendants contend that the parties to the agreements knew all of the facts relating to the adverse claim, expressly agreed that title to the acquired mineral interests would subject to and burdened by that claim, and expressly addressed in their agreements what would occur if the adverse claimant won its lawsuit. Defendants contend that the Plaintiffs received precisely what they bargained for and that there is no legal or factual basis for any attempt to set aside the agreements or obtain restitution of amounts paid by Plaintiffs. Defendants also contend that the alleged mistake on which the claims are predicated cannot be characterized as a mistake of fact but at most is a mistake of law or a mistake as to future events that cannot form the basis of mutual mistake under Texas law. Defendants further contend that the undisputed facts establish that there was no complete failure of consideration as required for rescission under Texas law. With regard to the claim for unjust enrichment, Defendants contend that not only were Plaintiffs not unjustly enriched in light of the bargain that they made in the agreements, but that claim fails for independent reasons, inasmuch as the parties’ relationship was governed by an express contract and in any event is barred by limitations.

    Sentiment: Strong Buy

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