On December 16, 2013, Chimicles & Tiekllis LLP filed a derivative action complaint on behalf of Sanchez Energy Corporation (“Sanchez Energy” or the “Company”) in the Court of Chancery of the State of Delaware (the “Action”). The Action alleges wrongdoing by the Sanchez Energy directors for causing the Company to acquire an interest in the Tuscaloosa Marine Shale from (“TMS Assets”) from Sanchez Resources LLC (“Resources”), an entity affiliated with Sanchez Energy’s CEO, Tony Sanchez, III, and Executive Chairman Tony Sanchez, Jr. (together the “Sanchezes”) at a grossly excessive price, exposing Sanchez Energy to substantial increased risk.
On August 8, 2013, Sanchez Energy announced it had acquired a working interest in the TMS Assets from Resources. The Sanchezes own a portion of the equity of Resources. Moreover, the CEO of Resources is Eduardo Sanchez, son and brother to the Sanchezes. The transaction is valued at $78 million or roughly $2,500 an acre. The per acre price is exponentially higher than the $145 an acre paid by Goodrich Petroleum Corp. for 172,000 acres in the Tuscaloosa Marine Shale just one month prior. Resources retained a 50% working interest in the TMS Assets. The transaction was approved by the Sanchez Energy board of directors and was not subject to a vote of Sanchez Energy’s public shareholders.
The Sanchezes currently own approximately 17% of Sanchez Energy’s outstanding common stock. Based on the Sanchezes’ control of a significant voting stake and power at the Board level, the Sanchezes had the ability to consummate the transaction on terms favorable to themselves and detrimental to the interests of Sanchez Energy and its stockholders.
After the announcement of the Transaction, several actions were filed. On December 20, 2013, the Court consolidated all of the actions and Chimicles & Tikellis LLP was appointed Co-Lead Counsel. Co-Lead Counsel filed a Verified Consolidated Stockholder Derivative Complaint (“Complaint”) (available here) on January 28, 2014. Pursuant to the Stipulation and Scheduling Order (“Scheduling Order”) entered by the Court of February 28, 2014.
On April 1, 2014, Defendants filed several motions to dismiss the Complaint. Plaintiffs’ brief in opposition to the motions to dismiss will be filed by May 23, 2014 and Defendants’ reply briefs will be filed by June 20, 2014. Currently a date for oral argument on the motions to dismiss has not been scheduled.