A long, drawn out legal battle over an investment opportunity in the Eagle Ford has finally made its way to the Texas Supreme Court.
Related: Longview Energy Wins Court Battle Over Zavala County Acreage
In 2012, Longview Energy Company won a jury verdict against Huff Energy Fund, the largest court decision related to the Eagle Ford Shale to date. The company was awarded all rights to 46,000 acres of leases in Zavala County that have a market value as high as half a billion dollars.
Huff appealed the judgment, which was overturned by the Fourth Court of Appeals last November. Now, the Texas Supreme Court is contemplating whether to review the lower court's decision.
The dispute revolves around Longview's plan in 2009 to invest in 21,000 acres in the Eagle Ford. According to Longview, Huff entities and its directors jumped in and cheated them out of the opportunity. Critics are concerned that if this decision isn't reversed, it sends a dangerous message that makes it easier for a disgruntled and 'roque' board to steal confidential information.
Attorney, Byron Egan told Law360 that the lower court’s ruling goes beyond the oil patch and affects every company that wants to protect its confidential information.
“I think if the Supreme Court issued an opinion like what the Court of Appeals did, that would open the floodgates and wipe out the business opportunity doctrine. It’s a classic corporate opportunity case,” Egan said. “It’s a classic theft of corporate information case, classic breach of fiduciary duty. What you’re getting down to is can you trust your board members, can you have confidential discussions in a board meeting.”
Longview filed a petition to the Texas Supreme Court in February 2016, and the response for review is expected no later than April 15, 2016.