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Investor Group Demands Texas Pacific Land Trustees David Barry And John Norris Recognize Eric Oliver As Third Trustee

Sends Open Letter Criticizing Blatant Disregard for Shareholder Democracy

TPL Shareholders Elected Eric Oliver as Trustee by a Margin of Nearly Two-to-One

DALLAS, June 17, 2019 /PRNewswire/ -- SoftVest, L.P., Horizon Kinetics LLC and ART-FGT Family Partners, which collectively beneficially own over 25% of the outstanding shares of Texas Pacific Land Trust (TPL), today issued an open letter to David Barry and John Norris, two of the Trustees of TPL, demanding that they recognize Eric Oliver as a third Trustee.

The letter addresses Messrs. Barry and Norris' filing of a bogus lawsuit to "postpone" the special meeting in a blatant attempt to keep Mr. Oliver from taking his rightful seat as a Trustee. 

The full text of the letter is below.

Mr. Barry and Mr. Norris,

On May 22nd, 2019, TPL investors finally had the chance to cast their votes for a new Trustee.  Their choice was clear:  Eric Oliver was elected Trustee by a margin of close to two-to-one.  Though not surprising, the result is still remarkable given the millions of dollars of Trust property you negligently wasted in the span of two months in an unsuccessful effort to suppress shareholder democracy and railroad TPL shareholders into supporting your hand-picked candidate.

Though it is beyond the scope of this letter to recount all your misconduct during the two months preceding the special meeting, all of it is of public record, including:

(1)  your failures to publicly disclose the conflicts of interest of Preston Young, your initial Trustee nominee;

(2)  your unwillingness to share with us the list of non-objecting beneficial owners on customary terms;

(3)  your profligate spending on at least two law firms, an investment bank, web designers, proxy solicitors and private investigators to intimidate our candidate;

(4)  the hyperbolic rhetoric, innuendos and fear mongering (if tweets about a "storm" on TPL's horizon qualify?);

(5)  repeated late night calls to shareholders by your agents;

(6)  misconstruing the words and actions of federal securities regulators;

(7)  the harassing level of vote solicitation mailings; and

(8)  your efforts to prevent Broadridge—the nationally recognized proxy distribution and tabulation firm—from delivering the votes to us before the May 22nd meeting.

For all of that, your deepest insult to shareholders' essential power came less than 24 hours before the special meeting, after it had become obvious that Eric Oliver's pronounced victory margin was impossible to overcome.  Thus, you filed a bogus lawsuit in federal court as an excuse to purportedly "postpone" the special meeting, hoping that you would not have to publicly face your candidate's electoral loss.  Very likely, only the several score of shareholders who attended the meeting are aware that you called for uniformed Dallas police officers to try to prevent entrance to the building where the meeting would be held.

But, notwithstanding your efforts to intimidate Eric Oliver and other shareholders the morning of the special meeting, TPL's shareholders did cast their votes. Eric Oliver was elected Trustee.

In talking about your lawsuit, we do not use the term "bogus" to be colorful—we use it in its definitional sense.  A single example from your lawsuit makes our point. Among the "material misstatements" you claim we made that entitled you to cancel the meeting is one we made on April 23rd, 2019  that "[t]he sole intended purpose of the formation of [the Trust] as a trust was to provide an orderly liquidation of the land that secured defaulted bonds at the T&P Railway."  According to your suit, this factual, non-controversial statement puts us in violation of federal securities laws and merited cancellation of the meeting because "[i]t could not be more plain that the Trust did not have a "sole intended purpose" of "liquidat[ion]."  That was, and continues to be, your representation to the Court.  But, it stands in contrast to the public record TPL, its Trustees, agents and counsel have created over the last 130 years, including in legal memoranda and interviews conducted by your former Trustee, George C. Fraser in the 1950s.  More recently, your own former agent, Roy Thomas, noted in a 2006 interview that TPL's "business since 1888 has been 'going out of business.'" And your very own presentation to ISS filed only two months1 ago repeatedly referred to TPL as a "liquidating trust"! 

  • As a liquidating trust, TPL has not issued additional equity since its inception in 1888 and is not authorized to issue any new equity

  • A liquidating trust does not have the capital needs that a corporate structure typically provides, reflecting the Trust's longstanding primary mission: to return cash to shareholders

As a liquidating trust, the Trustees are authorized by the Declaration of Trust to pay dividends to certificate holders and to repurchase / cancel outstanding certificates, but not issue additional equity. Accordingly, equity is not an available component of our compensation program

Why are you expending beneficiaries' property (and judicial resources) making such claims—false on their face—before a federal court?

Eric Oliver has been elected as TPL's third Trustee, and you are required to recognize him as such.  Given your utter disregard of your basic contractual and fiduciary obligations as trustees under the TPL declaration of trust, and the excesses you have engaged in as it relates to your power and authority under such document, we intend to hold you personally liable for your actions. 

With each further action you take from this point on to prevent Eric Oliver from undertaking his responsibilities as Trustee, you are creating incremental personal liability for yourselves.  All the wasteful expenses you are incurring—purportedly on behalf of the Trust—will be reimbursed by you to TPL's beneficiaries. 





1 See pages 15, 16, and 20 of TPL's presentation April 26, 2019 presentation, which is available here.  The red lines in the image excerpts above did not appear in the original presentation.


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