Longview Energy Co.'s $162 million verdict in a breach of fiduciary duty case has been listed by The National Law Journal as the 15th largest verdict of 2012 in the publication's annual report on "Top Verdicts of the Year." Longview Energy was represented by Gardere Attorneys Craig B. Florence, Randy D. Gordon and Rachel Kingrey, along with Mikal Watts and Frank Guerra of Watts Guerra Craft LLP. The final judgment value of more than $500 million is believed to be the largest ever involving the Eagle Ford Shale.
"This case reaffirmed the importance of corporate fidelity and the consequences of straying from your responsibilities," Mr. Florence says. "Once you commit to a board and its shareholders, your loyalty cannot be compromised."
On June 2, 2012, jurors in Longview Energy Company v. The Huff Energy Fund L.P., WRH Energy Partners, LLC, Riley-Huff Energy Group LLC, William R. "Bill" Huff and Rick D'Angelo found that directors Bill Huff and Rick D'Angelo used The Huff Energy Fund portfolio company Riley-Huff Energy Group to breach their fiduciary duty by covertly securing approximately 46,000 Eagle Ford leasehold acres that were being explored by Longview Energy.
According to court records, Mr. Huff and Mr. D'Angelo encouraged Longview Energy to explore an investment in the Eagle Ford Shale. However, shortly before the Longview Energy board was to make its final vote on the investment, Huff Energy and Mr. D'Angelo directed Riley-Huff Energy to begin purchasing the same leases.
Judge Amado Abascal of the 365th Judicial District Court in Zavala County ordered Riley-Huff Energy Group to transfer title to the Eagle Ford leased acres and all related wells and production facilities to Longview Energy. Additionally, Mr. Huff, Mr. D'Angelo, The Huff Energy Fund, WRH Energy Partners and Riley-Huff Energy Group were ordered to pay Longview Energy $95.5 million for past revenues, along with production proceeds earned from the leasehold acres since the June jury verdict, an estimated $5 million per month. The judgment also carried an award of 5 percent annual post-judgment interest.