Vodenichar v. Halcón Energy
www.HalconMercerSettlement.com

FREQUENTLY ASKED QUESTIONS

Helpful Hint: Using the general subject of your question may provide the best search results. For example, enter the word "hearing" in the search box to find information about the Settlement's Fairness Hearing.

1. Why did I receive a notice?

You, someone in your family, or your organization owns land in Mercer County, PA and may have signed an oil and gas lease naming Halcón as the lessee and were not paid. The Court directed that the Settlement Notices be sent to Class Members because you have a right to know about the Settlement and your options before the Court decides whether to give final approval to this Settlement with Halcón.

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2. What is the lawsuit about?

The case is called Jeffrey Vodenichar et al. v. Halcón Energy Properties, Inc., Morascyzk & Polochak, and Co-Exprise, Inc., d/b/a CX-Energy, Case No. 2013-512 in the Court of Common Pleas for Mercer County, PA. The people who sued are called plaintiffs and the companies they sued are called defendants. Judge Daniel P. Wallace is overseeing the case.

The lawsuit claims that landowners signed oil and gas leases with Halcón in 2012 for land in Mercer County, PA but did not receive the payments required by the leases and related documents. The lawsuit also claims that M&P and CX-Energy breached their duties to Class Members under Landowner Marketplace Agreements. The lawsuit generally alleges claims for breach of contract and tort, and seeks compensatory damages, punitive damages and declaratory relief against Halcón, and also asserts claims against M&P and CX-Energy.

Halcón denies any wrongdoing and the Court has not decided whether plaintiffs or Halcón is right. Plaintiffs and Halcón have agreed to resolve the claims against Halcón by settlement to avoid the time, expense and uncertainty associated with continued litigation (particularly in light of Halcón’s announced intention to file for bankruptcy) and to provide benefits to class members as soon as practical. Moreover, the settlement makes clear that class members retain their oil and gas rights free of any claim by Halcón.

On March 8, 2016, the Court entered a Preliminary Approval Order, which preliminarily approved the Settlement and certified the Class against Halcón for settlement purposes. On July 11, 2016 the Court entered an Order directing that Settlement Notices be sent to potential Class members and scheduling a Fairness Hearing on October 28, 2016, to consider whether to enter final judgment approving the Settlement with Halcón.

This settlement is only with Halcón. Plaintiffs continue to litigate their claims against M&P and CX-Energy. You may receive a separate notice related to the M&P and CX-Energy claims. M&P and CX-Energy have also asserted claims against the Settlement Funds for “transaction fees” they claim the class members owe them under the Landowner MarketPlace Agreements and seek certification of a defendant class consisting of the class members. Plaintiffs oppose all such claims by M&P and CX-Energy on both procedural and substantive grounds. However, the claims of M&P and CX-Energy may delay distribution of some or all of the Settlement Funds to the class members, result in a partial holdback of portions of the Settlement Funds or, if M&P and CX prevail, could reduce the amounts that can be paid to the class members under the Settlement.

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3. Why is this a class action?

Jeffrey S. Vodenichar, David M. King, Jr., Leigh V. King, Joseph B. Davis, Lauren E. Davis, Grove City Country Club, and Richard Broadhead (through his estate) sued on behalf of people who have similar claims. All persons and entities with similar claims to the Class Representatives are “Class Members,” except for those who exclude themselves from the Class. Bringing a case as a class action allows adjudication of many similar claims of persons and entities that might be economically too small to bring individually.

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4. Why is there a Settlement?

The plaintiffs and their attorneys believe that the claims asserted in the lawsuit have merit. They recognize, however, the expense and length of continued proceedings necessary to pursue their claims against Halcón through trial and appeals, as well as the associated risks. Here, in particular, Halcón has publicly announced that it intends to reorganize through bankruptcy in the near future. By entering into the Settlement, Halcón is not admitting that it did anything wrong. Both sides want to avoid the cost of further litigation and to provide benefits to Class Members as soon as practical. The attorneys investigated the facts and applicable law regarding the plaintiffs’ claims and Halcón’s defenses. After approximately three and a half years of litigation, plaintiffs and Halcón engaged into negotiations to resolve plaintiffs’ claims. At the time the initial agreement to settle was reached, plaintiffs’ counsel and Halcón’s counsel had a thorough understanding of the strengths and weaknesses of their respective positions. Plaintiffs’ attorneys believe the Settlement is best for everyone who is affected. The Settlement provides benefits now as compared to the risks that a similar, smaller recovery would be achieved after trial and appeal, possibly years in the future, or that no recovery would be achieved at all. Those risks were significant, particularly in light of Halcón’s financial condition, likely bankruptcy filing, and ongoing risks because of low oil and gas prices and other reasons that its plan of reorganization may ultimately fail.

The Settlement resolves and releases all claims that were or could have been brought in the lawsuit against Halcón by the Class, except for those who exclude themselves from the Settlement. The full language of the release is in the Stipulated Settlement Agreement available on the Court Documents page. You can also request a copy be mailed to you by calling the Claims Administrator.

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5. What are the Transaction Fee Claims?

When you signed a Landowner Marketplace Agreement and became a member of the landowner group, you agreed to pay “Transaction Fees,” a percentage of the up-front per acre bonus payment to be paid to you by Halcón as set forth in the relevant agreements.

M&P and CX-Energy have asserted claims in this litigation against Plaintiffs, the class and Halcón, seeking Transaction Fees, to be calculated as a percentage of the $5,950,000 Settlement Amount (“Transaction Fee Claims”). Plaintiffs assert defenses to and dispute the Transaction Fee Claims and all other claims of M&P and CX-Energy.

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6. How do I know if I am part of the Settlement?

Any individual or entity that entered into a lease with Halcón in 2012 for land in Mercer County, PA and was not paid by Halcón under the lease and related documents may be a member of the Class. More specifically, the Court certified the following Class against Halcón for Settlement purposes:

All persons (1) who entered into a Landowner MarketPlace Agreement with CX-Energy and M&P relating to property located in Mercer County, Pennsylvania, (2) who executed an oil and gas lease and related documents with Halcón Energy Properties, Inc., (3) whose name was submitted to Halcón pursuant to ¶ 3 of the Halcón Agreement (as defined in the Amended Complaint), but (4) whose oil and gas lease was not paid by Halcón. Excluded from the class are claims arising from any oil and gas lease for which Halcón, within the time period permitted under the Halcón Agreement, gave written notice to CX-Energy or M&P asserting a Title Defect or "other Defect," except for any purported notice contained in the November 1, 2012 letter from David S. Elkouri to Joseph E. Morascyzk.

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7. What if I am still not sure if I am included in the Class?

If you are still not sure whether you are included in the Class, you can call 1-855-907-3226 for free help or you can mail or fax a letter to the Claims Administrator at the address in Question 9 below to request information on whether you are a Class Member.

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8. What does the Settlement provide?

The Settlement provides the following primary benefit to Class Members:

$5,950,000 Settlement Fund. Halcón has paid into an escrow account $5,950,000 for the benefit of Class Members. From this amount will be deducted certain amounts, including expenses of litigation, administration of the notice and distributing Settlement benefits to Class Members, attorneys’ fees, a small reserve and any reserve required by the Court to account for the claims of M&P and CX-Energy (the “Net Settlement Fund”). In general, each class member will be assigned “settlement shares” based on the net acres in a class member’s lease if he did not later sign another oil and gas lease. A class member who later signed another oil and gas lease will receive a smaller share. The total value of the shares will be determined and the Net Settlement Fund will be distributed to the class members. To the extent that any reserves are withheld, including reserves related to the claims of M&P and CX-Energy, such reserves may be distributed in a second distribution to the class. Please check back. More information regarding distribution will be available after it is approved by the Court.

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9. How do I receive Settlement benefits?

If you are a Class Member and received a notice by mail then the Claims Administrator has a record of your lease and you do not need to do anything to receive Settlement benefits. If you are a Class Member and did not receive a copy of the notice by mail, to receive Settlement benefits you must contact the Claims Administrator by September 28, 2016 and confirm that you signed an oil and gas lease with Halcón in 2012 but were not paid. You can contact the Claims Administrator by telephone at 1-855-907-3226, or by sending a letter to:

Halcón Mercer Settlement
c/o GCG
PO Box 35100
Seattle, WA 98124-1100

You may also fax your letter to the Claims Administrator at (206) 876-5201. Your letter must be postmarked or received by September 28, 2016.

No payments will be provided to Class Members until after the Court enters a final judgment approving the Settlement and any appeals are resolved (see Question 18). It is uncertain how long resolution of any appeals will take. Please be patient.

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10. What am I giving up to stay in the Class?

Unless you exclude yourself from this Settlement, you cannot separately sue Halcón, continue to sue, or be part of any other lawsuit against Halcón about the legal issues in this case. The issues in this case include all claims that could be asserted by a Class Member relating to the failure of Halcón to honor the oil and gas leases and related documents Class Members signed. The decisions by the Court will bind everyone who does not exclude themselves. The “released claims” – the claims you are giving up - are described more fully in the Stipulation of Settlement, which describes exactly the legal claims that you give up if you do not exclude yourself from the Settlement. The Stipulation of Settlement is available on the Court Documents page. You may also contact the Claims Administrator at 1-855-907-3226 and request that a copy of the Stipulation of Settlement be mailed to you.

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11. How do I get out of the Settlement?

You cannot exclude yourself by telephone or by email. To exclude yourself from the Settlement, you must send a letter to the Claims Administrator by mail or fax and a letter to Class Counsel by mail that includes the following:

  • The case name Jeffrey S. Vodenichar et al. v. Halcón Energy Properties, Inc. et al., Case No. 2013-512;
  • Your full name, address and telephone number;
  • A statement that you wish to be excluded from the Class; and
  • Your signature (or in the event of an entity, the signature of an individual authorized by your entity to request exclusion)

If you are a co-owner of property (such as where the property is in the name of both husband and wife), all owners must complete and sign the Request for Exclusion. The Request for Exclusion must be postmarked or received by the Claims Administrator and Class Counsel by October 14, 2016:

Claims Administrator
(By Mail)
:
Claims Administrator
(By Fax)
:
Class Counsel:
Halcón Mercer Settlement
c/o GCG
PO Box 35100
Seattle, WA 98124-1100
(206) 876-5201 David A. Borkovic, Esq.
Jones, Gregg, Creehan & Gerace, LLP
411 Seventh Ave., Ste. 1200
Pittsburgh, PA 15219

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12. If I don’t exclude myself, can I sue Halcón for the same thing later?

Unless you exclude yourself, you give up the right to sue Halcón for the claims that the Settlement resolves and releases. You must exclude yourself from the Class in order to try and maintain your own lawsuit. However, if Halcón files for protection under the Bankruptcy Code, you may not be able to sue Halcón without obtain permission from the Bankruptcy Court.

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13. If I exclude myself from the Settlement, can I still get Settlement benefits?

You will not get any benefits if you exclude yourself from the Settlement. If you exclude yourself from the Settlement, do not contact the Claims Administrator or the Court asking for benefits.

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14. Do I have a lawyer in this case?

The Court has appointed David A. Borkovic, Richard A. Finberg, David M. Cohen and John C. Butters as counsel for all Class Members. They are called Class Counsel. You will not be separately charged for these lawyers. The Court will determine the amount of Class Counsel’s fees and expenses which will be paid from the Settlement fund. If you want to be represented by your own lawyer, you may hire one at your own expense and that lawyer must file an Entry of Appearance with the Court.

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15. How will the lawyers be paid?

Class Counsel have not received any payment for their services in pursuing the claims against Halcón on behalf of the Class, nor have they been paid for their litigation expenses. Class counsel have not submitted a request for attorneys’ fees or reimbursement of litigation expenses at this time. The application for attorneys’ fees, expenses and any incentive awards for the Class Representatives will be filed with the Court by October 7, 2016, and will be available on the Court Documents page after it is filed. Halcón has agreed not to oppose a request for fees of up to thirty percent of the total Settlement Fund. Halcón has also agreed not to oppose a request for incentive awards for the Class Representative of up to $2,500 each to be paid from the Settlement Fund. The Court will make the final determination on how much Class Counsel will be paid and whether to approve incentive awards for the Class Representatives. Attorneys’ fees, expenses and any incentive awards for the Class Representatives will only be awarded after the Court has determined they are fair and reasonable.

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16. How do I tell the Court I don’t like the Settlement?

If you are a member of the Class, you can object to any part or all of the Settlement, including the request for fees, reimbursement of expenses or any Class Representative incentive awards. To object, you must submit a letter that includes the following:

  • The case name Jeffrey S. Vodenichar et al. v. Halcón Energy Properties, Inc. et al., Case No. 2013-512;
  • Your full name, address and telephone number;
  • A statement saying that you object to the Settlement;
  • The reasons you object to the Settlement, along with any supporting materials; and
  • Your signature (or in the event of an entity, the signature of an individual authorized by your entity to request exclusion).

If you are a co-owner of property (such as where the property is in the name of both husband and wife), all owners must complete and sign the Objection.

You must mail your objection so it is received no later than October 14, 2016, to the following three addresses:

BY HAND OR MAIL: AND BY MAIL TO BOTH:
Ruth Bice, Prothonotary
Mercer County
105 Mercer County Courthouse
Mercer, PA 16137
Halcón Mercer Settlement
c/o GCG
P.O. Box 35100
Seattle, WA 98124-1100
David A. Borkovic, Esq.
Jones, Gregg, Creehan & Gerace,
LLP
411 Seventh Ave., Ste. 1200
Pittsburgh, PA 15219

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17. What is the difference between objecting and excluding?

Objecting is simply telling the Court that you don’t like something about the Settlement. You can object to the Settlement only if you do not exclude yourself from the Settlement. Excluding yourself from the Settlement is telling the Court that you do not want to be a part of the Settlement.

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18. When and where will the Court decide whether to approve the Settlement?

The Court will hold the Settlement hearing at 9:00 AM on October 28, 2016 (eastern time) before the Honorable Daniel P. Wallace, Court of Common Pleas for Mercer County, Courtroom No. 2, Mercer County Courthouse, Mercer, PA 16137. You should be aware that the Court may change the date and time of the hearing without another notice being sent. The latest information will be posted on this website. If you want to come to the hearing, you should check the website or with Class Counsel before coming to be sure that the date and/or time has not changed. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. The Court will also consider the request by Class Counsel for attorneys' fees, reimbursement of expenses and any incentive awards for the Class Representatives. If there are objections, the Court will consider them at this time. After the hearing, the Court will decide whether to enter a final judgment approving the Settlement.

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19. Do I have to come to the hearing?

No. Class Counsel will answer questions the Court may have. But you may come at your own expense. If you send an objection, you do not have to come to court to talk about it. As long as you submit your written objection as described above, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary.

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20. May I speak at the hearing?

You may ask the Court for permission to speak at the Fairness Hearing. To do so, you must send a letter saying that you intend to appear and wish to be heard. Your notice of intention to appear must include the following:

  • Your name, address and telephone number;
  • A statement that this is your Notice of Intention to Appear in Jeffrey S. Vodenichar et al. v. Halcón Energy Properties, Inc. et al., Case No. 2013-512;
  • The reasons you wish to be heard;
  • Copies of any papers, exhibits or other evidence or information that is to be presented to the Court at the Fairness Hearing; and
  • Your signature.

If you are a co-owner of property (such as where the property is in the name of both husband and wife), all owners must complete and sign the Notice of Intention to Appear. You must submit your Notice of Intention to Appear so it is postmarked no later than October 14, 2016 to the three addresses in Question 16. You cannot speak at the Fairness Hearing if you excluded yourself from the Class or if you have not provided your Notice of Intention to Appear and speak in accordance with the procedures in this Question.

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21. What happens if I do nothing at all?

If you are a Class Member and received a notice by mail, then the Claims Administrator has a record of your lease and you do not need to do anything to receive Settlement benefits. If you are a Class Member and did not receive a copy of the notice by mail, to receive Settlement benefits you must contact the Claims Administrator BY September 28, 2016 and confirm that you signed an oil and gas lease with Halcón in 2012 but were not paid. Please see Question 9 above. If you do nothing, and you are a member of the class, you will receive the settlement payment approved by the Court. Whether you received the notice by mail or not, unless you exclude yourself, you will release and not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Halcón about the legal issues in this case, ever again.

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22. How do I get more information?

More details are in the Stipulated Settlement Agreement, which was filed with the Court on July 6, 2016 and can be viewed during normal business hours of operation at:

Court of Common Pleas for Mercer County
105 Mercer County Courthouse
Mercer, PA 16137

You may also download and print a copy of the Stipulated Settlement Agreement and Preliminary Approval Order from the Court Documents page and the Notice from the Notice page. This website will be periodically updated with additional documents and information leading up to and after the Fairness Hearing, so please check back.

For assistance, you may call the Claims Administrator toll free at 1-855-907-3226, fax the Claims Administrator at (206) 876-5201 or write the Claims Administrator at Halcón Mercer Settlement c/o GCG, PO Box 35100, Seattle, WA 98124-1100.

You may also contact Class Counsel David A. Borkovic at Jones, Gregg Creehan & Gerace, LLP 411 Seventh Avenue, Suite 1200, Pittsburgh, PA 15219, (412) 261-6400, dab@jgcg.com or Richard A. Finberg 300 Mt. Lebanon Boulevard, Suite 206-B Pittsburgh, PA 15234, (412) 341-1342, richardfinberg@gmail.com or David M. Cohen at Complex Law Group, LLC, 40 Powder Springs Street, Marietta, Georgia 30064, (770) 200-3100, dcohen@complexlawgroup.com.

The tax consequences of the settlement to you may depend on individual circumstances, and you should consult with your tax advisor.

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23. Was the Settlement approved?

The Court preliminarily approved the Settlement on March 8, 2016 subject to the result of a Fairness Hearing to be held before the Honorable Daniel P. Wallace on October 28, 2016 at 9:00 am in Courtroom 2 of the Court of Common Pleas for Mercer County, 105 Mercer County Courthouse, Mercer, Pennsylvania 16137.

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24. What if the Settlement is not approved?

If for any reason the Settlement does not become final, or is terminated, the Plaintiffs and Halcón shall revert to their respective positions in the lawsuit as they existed immediately before the entry of the Preliminary Approval Order on March 8, 2016.

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25. When will I receive my payment?

The Settlement was granted Preliminary Approval on March 8, 2016. The Fairness Hearing is scheduled for October 28, 2016 at which time the Court will determine whether to grant final approval of the Settlement. The distribution of Settlement Benefits should occur shortly thereafter, but it may be delayed because of possible appeals or bankruptcy filings. Please be patient. Thank you.

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26. How will the payment amount for Class Members be calculated?

In general, the payment amounts are determined by the acreage each Class Member leased to Halcón that was not paid, the total acreage Class Members leased to Halcón that was not paid, and the Net Settlement Benefits (Settlement Benefits after deduction for fees, expenses and other costs as may be awarded by the Court at the Fairness Hearing).

Class Members who subsequently leased their property to another company after not getting paid by Halcón (based on records reasonably available to the Settlement Administrator) will be paid by taking into consideration the difference between what Class Members received from re-leasing their property and what they were supposed to receive from Halcón.

At this time, it is estimated that Class Members who did not re-lease their property will receive approximately $175 to $225 per net acre and Class Members who re-leased their property to another company will receive between approximately $40 to $50 per net acre.

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27. What should I do if the Class Member died?

If you are the heir or legal representative of a Class Member who died, you may be entitled to receive Settlement Benefits. You may be required to submit proof that you have the legal authority to receive Settlement Benefits or explain why you believe you are authorized to receive the Settlement Benefits on behalf of the deceased Class Member. Please contact the Claims Administrator toll-free at 1-855-907-3226.

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28. How do I update my contact information or name change?

You may call the Claims Administrator toll-free at 1-855-907-3226 or write the Claims Administrator at Halcon Mercer Settlement c/o GCG, P.O. Box 35100 Seattle, WA 98124-1100. You may also send an email to questions@HalconMercerSettlement.com.

For a name change, please include appropriate documentation establishing the change of name, such as a marriage certificate and driver’s license.

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29. Who is the Garden City Group and what is its connection to the Halcón?

The Garden City Group (“GCG”) is one of the nation’s leading administrative service firms for class actions. GCG was hired with approval by the Court to assist in the administration of this Settlement. As such, GCG fulfills the role of a neutral party and has no direct association with Halcón or the other defendants.

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