UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report
February 17, 2011
(Date of earliest event reported)
Torch Energy Royalty Trust
(Exact name of registrant as specified in its charter)
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Delaware
(State or other jurisdiction of
incorporation or organization)
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1-12474
(Commission File Number)
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74-6411424
(I.R.S. Employer
Identification Number) |
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices, including zip code)
302/636-6016
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 7.01 |
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Regulation FD Disclosure. |
On February 23, 2011, the Torch Energy Royalty Trust (“Trust”) issued a press release, which
is attached hereto as Exhibit 99.1 and furnished as an exhibit to this Current Report on Form 8-K.
In the press release, the Trust announced that it and the derivative unitholder plaintiff reached
an agreement in principle with Constellation Energy Partners LLC (“CEP”) to settle certain claims
in the litigation, captioned Trust Venture Company, LLC v. Constellation Energy Partners
LLC (CV-2008-900751), filed by the derivative plaintiff on the Trust’s behalf in the Circuit
Court of Tuscaloosa County, Alabama (the “Settlement”).
As stated in the press release and the Notice of Pendency of Derivative Action, Proposed
Settlement of Derivative Action, Settlement Hearing, and Right to Appear, in the form approved by
the Court and attached hereto as Exhibit 99.2, subject to the approval of the Court, the derivative
plaintiff and the Trust have agreed to settle the claims against CEP in the derivative action, and
to enter into mutual, general releases with CEP in return for (i) a payment of one million two
hundred thousand United States dollars ($1,200,000) to the derivative plaintiff by Robinson’s Bend
Production II (“RBP II”), which is a Delaware limited liability company and an affiliate of CEP, to
reimburse the derivative plaintiff for the legal fees and expenses it incurred in prosecuting the
derivative action, (ii) an irrevocable bid by RBP II of not less than one million United States
dollars ($1,000,000) for its purchase from the Trust of the net overriding royalty interest
(“Alabama NORRI”), when such Alabama NORRI is separately offered for sale by the Trust at public
auction within 180 days of the effective date of the Settlement, with such bid amount to be
deposited by RBP II in a third-party escrow account pending the public auction, and (iii) a third
amendment to that certain Water Gathering and Disposal Agreement providing that, for a period of
ten years commencing on the first day of the month following the effective date of the settlement,
the charges for the gathering, separation, and disposal of water from oil and gas wells located in
Tuscaloosa County, Alabama that are owned and operated by RBP II (“Wells”) shall be fifty-three
cents ($0.53) per barrel of water. (RBP II currently charges one United States dollar ($1.00) per
barrel of water for the gathering, separation, and disposal of such water from the Wells.)
The Court has set a hearing in the Alabama Circuit Court, Tuscaloosa County, 714 Greensboro
Avenue, Tuscaloosa, Alabama 35401, on April 11, 2011, at 2:00 p.m. CDT
(the “Settlement Hearing”).
At the Settlement Hearing, the Court will determine whether or not (i) to approve the Settlement as
memorialized in the proposed Settlement and Release Agreement with CEP, and (ii) to approve an
Order ending this derivative action. On February 23, 2011, the Trust sent the Notice of Pendency
of Derivative Action, Proposed Settlement of Derivative Action, Settlement Hearing, and Right to
Appear to the Trust’s unitholders of record as of February 11, 2011, as required by the Settlement.
This Current Report on Form 8-K (including the Exhibits hereto) will not be deemed an
admission as to the materiality of any information required to be disclosed solely to satisfy the
requirements of Regulation FD.
Limitation on Incorporation by Reference
In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01
shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall
such information be deemed incorporated by reference in any filing under the Securities Act of
1933, as amended, except as shall be expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding Forward-Looking Statements
This Current Report on Form 8-K and Exhibit 99.1 and Exhibit 99.2 hereto may contain
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995 with respect to the Trust’s business that is not historical information. As a general matter,
forward-looking statements are those focused upon future or anticipated events or trends and
expectations and beliefs relating to matters that are not historical in nature. The words
“believe,” “expect,” “plan,” “intend,” “estimate,” or “anticipate” and similar expressions, as well
as future or conditional verbs such as “will,” “should,” “would,” and “could,” often identify
forward-looking statements. The Trust believes there is a reasonable basis for its expectations
and beliefs, but they are inherently uncertain, and the Trust may not realize its expectations and
its beliefs may not prove correct. These and other risks, uncertainties and assumptions are
detailed in the “Risk Factors” section and elsewhere in the documents filed by the Trust with the
Securities and Exchange Commission. Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those indicated in these statements.
The Trust