Frequently Asked Questions
Question 1: Who is Foley Bezek Behle & Curtis, LLP?
Answer: Foley Bezek Behle & Curtis, LLP (“FBBC”) is a premier litigation firm with principal offices in Santa Barbara and Costa Mesa, California. FBBC deals extensively in complex litigation and has successfully sued large corporations and banks for fraud, violations of California and federal securities laws, financial elder abuse, and unlawful business practices. FBBC’s founding partners, Peter J. Bezek and Thomas G. Foley, Jr., have been practicing as partners since 1986 and have litigated dozens of cases involving financial wrongdoing. FBBC has successfully litigated against some of the largest companies and banking institutions in the country, including AT&T Wireless, Verizon Wireless, 24 Hour Fitness, Bank of America, Union Bank, and Wells Fargo Bank. More information can be found in FBBC’s website here.
Question 2: What is Chapter 11 Bankruptcy?
Answer: Chapter 11 is a chapter of the United States Bankruptcy Code, which permits reorganization of a debtor’s business affairs, debts, and assets under the bankruptcy laws of the United States. Chapter 11 bankruptcy is available to most businesses, whether organized as a corporation, partnership or sole proprietorship, and to individuals, although it is most prominently used by entities. Businesses generally file for bankruptcy when they are unable to service their debt or pay their creditors or are facing significant future liabilities.
On October 30, 2018, the Rockies Region 2006 Limited Partnership (“RR2006”) and Rockies Region 2007 Limited Partnership (“RR2007”) (collectively, the “Partnerships”) filed Chapter 11 bankruptcy petitions with the bankruptcy court in Dallas, Texas, which are jointly administered under Bankruptcy Court Case No. 18-33513.
Question 3: Why is PDC being sued?
Answer: The basis for the lawsuit in Federal District Court in Denver, Colorado, entitled Dufresne et al. v. PDC et al. (Case No. 17-cv-03079), is that PDC breached (1) the Partnership Agreements for the RR2006 and RR2007 Partnerships and (2) its fiduciary duties to both Partnerships and the limited partners. More information can be found in the most recent complaint filed in Federal Court in Colorado, which can be found here.
Question 4: What is a class action?
Answer: A class action is a type of lawsuit where one of the parties is a group of people, and/or entities, who are represented collectively by one or more members of the group. The representatives of the class are often referred to as “named plaintiffs” or “class representatives.” A class action allows one or more named plaintiffs to file and prosecute a lawsuit on behalf of a larger group, i.e., a “class.”
On July 10, 2018, an amended complaint was filed in a case in Federal District Court in Denver, Colorado, entitled Dufresne et al. v. PDC et al. (Case No. 17-cv-03079), alleging class action claims against PDC on behalf of all the limited partners of the RR2006 and RR2007 Partnerships. This case was stayed once the Partnerships filed for bankruptcy in Dallas, Texas, in October 2018.
Question 5: What will the limited partners receive under the Chapter 11 Plan for the RR2006 and RR2007 Partnerships?
Answer: According to the current Chapter 11 Plan filed on behalf RR2006 and RR2007 Partnerships, the limited partners may participate in a $5,280,000 settlement with PDC if the limited partners release all causes of action against PDC. Meaning, the limited partners must generally give up any legal claim against PDC in order to receive money from the settlement proposed under the Plan. The $5,280,000 settlement payment is comprised of a $2,360,000 payment to the RR2006 Partnership and a $2,920,000 payment to the RR2007 Partnership.
Additionally, under the Plan, the oil and gas properties of the RR2006 Partnership shall be sold to PDC for $304,000 and the oil and gas properties of the RR2007 Partnership shall be sold to PDC for $458,000. FBBC believes that the sale price of the Partnerships’ assets to PDC significantly undervalues those assets. According to industry experts retained by FBBC, the value of the limited partners’ interests in the Partnerships is in the range of $89.16 to $105.61 Million.
Question 6: How was the value of the interests of the limited partners in the RR2006 and RR2007 Partnerships determined?
Answer: In order to determine the value of the limited partners’ interests, FBBC retained Gustavson Associates (“Gustavson”), natural resource consultants who are experts in the oil and gas drilling industry. Gustavson prepared a valuation report for the combined assets of the Partnerships. Gustavson’s amended preliminary expert witness report is that the combined value of the limited partners’ interest in the two Partnerships is approximately $89.16 to $105.61 Million.