On September 29, 2021, the Court preliminarily approved a Settlement in the Litigation between Plaintiffs, on behalf of themselves and the Settlement Class, and Defendant. The approval and the Notice are not an expression of opinion by the Court as to the merits of any of the claims or defenses asserted by any of the parties to the Litigation, or of whether the Court will ultimately approve the Settlement Agreement.
In settlement of all claims alleged in the Litigation, Defendant has agreed to pay Seven Million Five Hundred Thousand Dollars ($7,500,000.00) in cash (“Gross Settlement Fund”). In exchange for the payment noted above, the Settlement Class shall release the Released Claims against and with respect to the Released Parties. The Gross Settlement Fund, less Class Counsel’s Fees and Expenses, Administration Expenses, any case contribution awards to Class Representatives, and other costs approved by the Court (the “Net Settlement Fund”), will be distributed to Class Members.
Counsel for Plaintiffs (“Class Counsel”) intends to seek an award of attorneys’ fees of not more than 40% of the Gross Settlement Fund. Plaintiffs’ Counsel, Rex A. Sharp and Scott B. Goodger of Sharp Law, LLP, have been litigating the Released Claims in various courts without any payment whatsoever, advancing thousands of dollars in expenses, for almost a decade. At the Settlement Fairness Hearing, Plaintiffs’ Counsel will also seek reimbursement of expenses incurred in connection with the prosecution of the Released Claims, to be paid out of the Gross Settlement Fund. In addition, the Class Representatives intend to seek a Case Contribution Award for their representation of the Class, which amount will not exceed one percent of the Gross Settlement Fund, to compensate them for the time, expense, risk, and burden of serving as Class Representatives.
The Court must approve the Plan of Allocation and Distribution, which describes how the Settlement Administrator will allocate the Net Settlement Fund to each Class Well based on the production of each well compared to the total production volume. Thereafter, subject to approval by the Court, the Settlement Administrator will allocate the Net Settlement Fund for each Class Well among all Class Members in that Class Well based on their royalty decimal interest in that Class Well.
The Settlement Administrator will distribute the Net Settlement Fund within forty-five (45) days of the Settlement becoming Final and Unappealable. This Date requires the exhaustion of any appeals, which may take a year or more after the entry of Judgment. The Settlement may be terminated on several grounds, including if the Court does not approve or modifies the terms of the Settlement. If the Settlement is terminated, the Litigation will proceed as if the Settlement had not been reached.