Cox Smith Matthews Incorporated (“Cox Smith”) today announced that Chief Bankruptcy Judge Ronald King of the United States Bankruptcy Court for the Western District of Texas has entered a $15.9 million judgment for Cox Smith client Reorganized TXCO Resources, Inc. (“RTXCO”), in one of the earliest complex litigation matters arising out of the Eagle Ford development in South Texas.
RTXCO is the successor entity to TXCO Resources, Inc. and affiliated entities (“TXCO”), which was a publicly traded oil and gas exploration and production company that filed a voluntary Chapter 11 case on May 17, 2009. Cox Smith served as TXCO’s counsel. Prior to confirmation of its bankruptcy plan, TXCO agreed to sell the majority of its oil and gas assets to two companies, including Newfield Exploration Company, headquartered in Houston, Texas. In February 2010, the plan became effective and RTXCO emerged from Chapter 11, with Newfield as the sole beneficiary of the RTXCO Liquidating Trust.
In November 2009 and prior to its bankruptcy confirmation, TXCO filed suit against Peregrine Petroleum. TXCO alleged Peregrine Petroleum misappropriated trade secrets from TXCO in breach of the terms of a confidentiality agreement and used that information to acquire oil and gas leases in the Maverick Basin of South Texas. The trial, which took place in the U.S. Bankruptcy Court for the Western District of Texas (San Antonio Division) began May 31, 2011 and lasted until September 2011.
Cox Smith shareholder James “Marty” Truss headed up the energy litigation trial team for RTXCO, assisted by Cox Smith bankruptcy shareholder Deborah Williamson and other Cox Smith attorneys. “This is a very significant result confirming a company’s right to protect proprietary data from those engaged in ‘data-mining’ or other misappropriation of trade secrets,” said Truss. “Confidentiality agreements are signed virtually every day as a matter of course in the oil and gas business. This judgment is a reminder to the industry that these agreements have teeth and may not be simply disregarded.”
“Marty Truss and the entire Cox Smith team were instrumental in this victory,” said Albert Conly, senior managing director of FTI Consulting, president of RTXCO and trustee of the TXCO Liquidating Trust. “Marty’s skill in the courtroom and his judgment and strategic insight were vitally important to us throughout this extremely long case, and Deborah Williamson’s experience in bankruptcy litigation was a critical component of our success as well. The team’s capability and tenacity enabled us to persevere and ultimately prevail. We are delighted with the outstanding result they achieved.”
The Cox Smith team was composed of attorneys from its energy, bankruptcy and litigation practice areas, including Marty Truss, Deborah Williamson, Meghan Bishop, David Vanderhider, Corey Wehmeyer, Ellen Mitchell and Thomas Rice.
“The breadth and depth of our firm’s legal resources permit us to pull in experienced attorneys from different practice areas to assist clients on complex matters like this one,” said Jamie Smith, managing director of Cox Smith. “This was an extremely difficult and drawn-out matter, and while I am not surprised, I’m very proud of how seamlessly our diverse and talented team worked together to achieve this great result for our client. As the Eagle Ford continues to develop, we expect to see continued litigation on a variety of fronts, and this judgment confirms our ability to provide world-class services to energy-related clients on highly complex litigation and transactional matters arising out of the Eagle Ford shale play.”
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