Texas Lawyer Highlights Hicks Thomas Securities Fraud Win Worth over $100 Million
Gregg Laswell of the Texas commercial litigation firm Hicks Thomas LLP
is representing Robert B. Allen, a man pursing compensation from his former
law partner for a lucrative gas deal. According to Allen, Trevor Rees-Jones
offered Allen a deal that returned $8.2 million, when Allen should have
earned an additional $100 million.
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Allen and Rees-Jones met as law partners. When Rees-Jones quit practicing
law to pursue a career in the oil and gas industry, he offered Allen the
opportunity to invest. Through a $700 investment and $34,000 certificate
of deposit, Allen became an eight percent owner in Rees-Jones’ company,
In 2003, Rees-Jones sent a letter to Allen, offering to buy his interest
in the company for $8.2 million based on a $138.3 million valuation of
the company. Allen accepted the deal in 2004, and Chief announced it was
for sale in 2005. One year later, Devon Energy bought Chief for $2.6 billion.
Laswell said, “The bottom line is that certain events…had
not been disclosed to Allen before the redemption and those events really
made the profits and the company much different than what had been explained
With the help of Laswell, Allen sued Rees-Jones and Devon. According to
Allen, Rees-Jones and Chief failed to provide integral information that
may have influenced his decision to sell interest in the company.
Rees-Jones and Devon attempted to halt Allen’s allegations by filing
motions for summary judgment, claiming certain provisions disallowed Allen
from alleging fraud. The 190th District Court of Houston agreed, but Allen appealed the rulings.
According to an opinion by the 1st Court, these stipulations shouldn’t keep Allen from bringing fraud
claims against Rees-Jones and Devon.
1st Court Justice Harvey Brown said, “Rees-Jones and Devon have misconstrued
the nature of Allen’s claim.” According to Justice Brown,
Allen’s claim is not that Rees-Jones and Chief omitted facts regarding
the company’s value, but that they failed to provide material facts
affecting his decision to redeem interest in the company at all.
“Allen contends that for a founding investor in a start-up company,
the question is not only whether the price offered for his interest is
fair, but whether the investor would be better-off in the long run if
he retained his interest,” said Justice Brown.
Laswell likened the deal to a husband who allows his wife to put him through
law school and then leaves her. “This company wouldn’t have
ever got off the ground without this initial investment,” Laswell
stated. He said he is pleased with the court’s decision.