Court Ruling Favors Quicksilver

The 48th District Court in Tarrant County, Texas, yesterday passed a ruling in favor of Quicksilver Resources Inc. (KWK), denying the Motion for Partial Summary Judgment filed by BreitBurn Energy Partners L.P. (BBEP).
 
Quicksilver had brought a suit against BreitBurn and others alleging that BreitBurn had improperly adopted unilateral changes to the Limited Partnership Agreement attempting to limit Quicksilver's right to vote for BreitBurn GP LLC's Board of Directors. BreitBurn imposed a ceiling preventing unitholders from voting in excess of 20% of their outstanding units even if they owned a greater percentage. Quicksilver owns 21,347,972 units or 40% of the total outstanding units, and is the only unitholder with greater than 20% ownership in the partnership.
 
The court held BreitBurn's act as invalid, stating that Quicksilver has the right to vote for all of its units for purposes of a quorum and on any action provided for in the Limited Partnership Agreement. Further, it held that the Partnership Agreement requires directors to determine whether an amendment would adversely affect the Limited Partners in any material respect, which the directors failed to do.
 
Pursuant to a previous agreement between BreitBurn GP LLC and Quicksilver, the annual meeting of BreitBurn Energy Partners LP must be held within 120 days from the court's order, at which time there will be a vote on the election of two BreitBurn GP LLC directors. Quicksilver has requested that the long-delayed 2009 annual meeting and the election of directors be held as quickly as possible.

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