Mesa Offshore Trust Announces Delay in Final Liquidating Distribution Due to Arbitration Demand
July 23 2010 - 4:07PM
Business Wire
Mesa Offshore Trust (OTCBB: MOSH) announced today that certain
unitholders of the Trust have made a demand for arbitration
(“Demand for Arbitration”) under the Final Settlement Agreement
dated May 19, 2009. As a result of the Demand for Arbitration and
potential expenses and related contingencies associated with the
Demand for Arbitration and the resolution thereof, the Trustee has
decided to withhold current funds held by the Trust as a reserve
for these contingent expenses and to defer making any final
liquidating distribution at this time.
The claimants contend that Pioneer should have sold and accepted
an offer from some of the claimant’s to buy an inchoate overriding
royalty interest in Brazos A-39, which constituted part of the
Pioneer settlement interests and the interest of the Mesa Offshore
Trust Partnership (the “Partnership”). The offer made for this
interest was $125,000, which would represent approximately $0.0017
per unit. Such claimants did not offer to buy the interest in the
public auction of this and other interests held in accordance with
the Settlement Agreement. The Settlement Agreement set forth that
if the public auction did not result in a sale of the properties,
“Pioneer will have the absolute right, in its sole discretion, to
cancel, extinguish, or otherwise dispose of all or part of such
interests.” The Trustee has been informed by Pioneer that the
Brazos A-39 lease reverted to the Mineral Management Service in
early March 2010, 180 days after the Midway Well ceased production
back in September 2009. In addition, as previously announced, the
Mesa Offshore Royalty Trust Partnership was dissolved in June
2010.
The Trustee will continue to act as Trustee and exercise its
powers for the purpose of liquidating and winding up the affairs of
the Trust at its termination until its duties have been fully
performed and the Trust estate is finally distributed. In
accordance with the Trust Indenture, the Trustee will as promptly
as possible distribute the remaining assets in the Trust estate
(including settlement proceeds), after paying, satisfying and
discharging all of the liabilities of the Trust, or, when
necessary, setting up reserves in such amounts as the Trustee in
its discretion deems appropriate for contingent liabilities.
As previously announced as part of the liquidation and
termination of the Trust, the Trustee set February 22, 2010 as
the record date for unit holders entitled to payments of any final
liquidating distributions. Accordingly, the Trustee will make
payment of any final liquidating distribution only to unitholders
of record as of February 22, 2010.