Constellation Energy Partners: Former Sponsor, an Exelon Subsidiary, Seeks to Recover Damages from the Company in a New Delaw...
March 05 2014 - 5:15PM
Business Wire
Constellation Energy Partners LLC (NYSE MKT: CEP) today
announced that a subsidiary of Exelon Corporation (NYSE: EXC) has
filed a complaint against CEP in the Court of Chancery of the State
of Delaware (the “Exelon Litigation”).
The Exelon subsidiary, Constellation Energy Partners Holdings,
LLC ("CEPH"), was an affiliate of Constellation Energy Group, Inc.
(“CEG”) until CEG merged with Exelon in 2012. Based on information
provided in the complaint, CEPH has been a wholly owned subsidiary
of Exelon since that merger.
CEG formed CEP in 2005 and took the company public in November
2006. Following the initial public offering, CEG retained a
significant interest in CEP through its ownership of multiple
securities in CEP’s highly structured classes of equity, which
include Class A and Class B units, management incentive interests
(Class C), and Class D interests. CEG also sponsored CEP by
providing a Management Services Agreement ("MSA"). CEG’s
sponsorship continued until August 2008, when CEG notified CEP of
its decision to sell its upstream gas assets. CEG terminated the
MSA effective December 2009, six months after CEP was required to
suspend cash distributions, thereby increasing CEP's cost
structure. After multiple inquiries to CEG by third-parties to
become CEP's sponsor, CEG sold its interest in the Class A and
Class B units to PostRock Corporation (NASDAQ: PSTR) in two
separate transactions in 2010. For unspecified reasons, CEG
retained the Class C and Class D interests after the sale of its
other interests to PostRock.
The Exelon Litigation relates to those retained Class D
interests and seeks money damages and other declarations by the
Court.
CEP believes that the allegations contained in the lawsuit are
without merit and intends to vigorously defend itself against the
claims raised in the complaint. In conjunction with its defense in
the Exelon Litigation, the company anticipates that it will incur
legal and other costs that may have a material effect on available
cash which could impact CEP’s ability to make distributions.
About Constellation Energy Partners LLC
Constellation Energy Partners LLC (“CEP”) is a limited liability
company focused on the acquisition, development and production of
oil and natural gas properties, as well as related midstream
assets. The company’s proved reserves are located in the Cherokee
Basin in Oklahoma and Kansas, the Woodford Shale in the Arkoma
Basin in Oklahoma, the Central Kansas Uplift in Kansas, and in
Texas and Louisiana.
Additional information concerning CEP can be found on the
company's Web site
(http://www.constellationenergypartners.com).
Forward-Looking Statements
This news release contains statements that are considered
forward-looking statements within the meaning of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as
amended. These forward-looking statements are largely based on the
company’s expectations, which reflect estimates and assumptions
made by the company’s management. These estimates and assumptions
reflect the company’s best judgment based on currently known market
conditions and other factors. Although the company believes such
estimates and assumptions to be reasonable, they are inherently
uncertain and involve a number of risks and uncertainties that are
beyond the company’s control. In addition, management's assumptions
about future events may prove to be inaccurate. Management cautions
all readers that the forward-looking statements contained in this
news release are not guarantees of future performance, and the
reader cannot be assured that such statements will be realized or
the forward-looking events and circumstances will occur. Actual
results may differ materially from those anticipated or implied in
the forward-looking statements due to factors listed in the "Risk
Factors" section of each company’s SEC filings and elsewhere in
those filings. All forward-looking statements speak only as of the
date of this news release. The company does not intend to publicly
update or revise any forward-looking statements as a result of new
information, future events or otherwise. These cautionary
statements qualify all forward-looking statements attributable to
the companies or persons acting on the company’s behalf.
Constellation Energy Partners LLCInvestor
Contact:Charles C. Ward, (877)
847-0009orGeneral Inquiries: (877)
847-0008www.constellationenergypartners.com
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