HomeMy WebLinkAboutResolution Fort Worth Housing Finance Corporation (FWHFC) FWHFC-2013-08RESOLUTION NO. FWHFC-2013-08
FORT WORTH HOUSING FINANCE CORPORATION
A RESOLUTION
TO HIRE RALPH DUGGINS AS LEGAL COUNSEL FOR THE CORPORATION
AND THE VILLAS OF EASTWOOD TERRACE, LLC TO FILE SUIT AGAINST
CHEASAPEAKE OPERATING, INC. AND TOTAL E&P (USA) INC. OVER
LEASE ROYALTY PAYMENTS
WHEREAS, the City Council of the City of Fort Worth (the "City") created the
Fort Worth Housing Finance Corporation (the "Corporation") in 1979 pursuant to the
Texas Housing Finance Corporation Act to facilitate the development of decent, safe
quality, affordable, and accessible housing for low and moderate income City residents
through lending and construction activities;
WHEREAS, the Corporation has entered into numerous oil and gas leases for the
minerals underlying the Corporation's properties and certain of those leases are held by
Chesapeake Operating, Inc. and Total E&P (USA), Inc. (collectively, "Chesapeake") as
either the original lessee or as an assignee from the original lessee;
WHEREAS, the leases provide that the royalty to be paid to the Corporation was
to be free of all costs of any kind, but an audit on certain City leases with Chesapeake has
determined that Chesapeake is reporting the net sales price of produced gas as the gross
sales price and charging costs which are disallowed by the lease thus underpaying the
royalties;
WHEREAS, on October 22, 2013, the City Council ratified the retention of
Ralph Duggins of the firm of Cantey Hanger L.L.P. and the filing of a lawsuit against
Chesapeake over issues relating to the calculations and amounts of royalty payment made
under gas leases between the City and Chesapeake (Resolution No. 4253-10-2013);
WHEREAS, the Coiporation is the Sole Member of The Villas of Eastwood
Terrace, LLC (the "Company"), and empowered to act on its behalf;
WHEREAS, due to the complexity of this area of the law, it is advisable for the
Corporation and the Company to obtain outside counsel with experience and special
expertise in oi1 and gas matters in order to represent the Corporation's and the
Company's interests; and
WHEREAS, the Board desires to approve hiring Ralph Duggins of the law firm
of Cantey Hanger L.L.P. as legal counsel to assist the Corporation and the Company in
connection with the gas lease royalty payments under their respective leases with
Chesapeake.
RESOLUTION NO. FWHFC-2013-08
PAGE 2
NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF
DIRECTORS OF THE FORT WORTH HOUSING FINANCE CORPORATION:
1. THAT the Board approves the hiring of Ralph Duggins, Cantey Hanger, L.L.P.,
as legal counsel for the Corporation and the Company in connection with gas
royalty payments under its leases with Chesapeake Operating, Inc. and Total E&P
(USA), Inc.
2. THAT the Board approves the payment by contingency for legal services for the
lawsuit on the same terms and conditions as those approved by the City of Fort
Worth for its suits over royalty payments with all costs of litigation to be
advanced by Cantey Hanger L.L.P.
3. THAT the Board approves the execution and delivery of engagement letters for
legal services for the Corporation and the Company.
4. THAT Tom Higgins, General Manager of the Corporation, or Jesus C. Chapa,
Assistant General Manager of the Corporation, are authorized to execute and
deliver the engagement letter for and on behalf of the Corporation and the
Company along with any related documents necessary to engage Ralph Duggins,
Cantey Hanger L.L.P.as outside counsel.
5. THAT this Resolution takes effect from the date of its adoption.
AND IT IS SO RESOLVED.
Adopted November 5, 2013.
FORT WORTH HOUSING FINANCE CORPORATION
By: 0
Salvador Espino, Presi ent