Curry Glassell – Houstonian millionaire, life coach and Democratic Party supporter – is again sparring with her brother, Alfred C. Glassell III.
Was she ever not?
Five years ago, Glassell contested her father’s will in court. She claimed undo influence was used to get Alfred Glassell Jr. to change his will and leave most of his oil money fortune to charity shortly before he died in 2008 at age 95.
Alfred the Third had no problem with the will change and opposed his sister, whose portion was reduced to $3 million. That bumped her total net worth up to about $15 million.
The brother had his share of Alfred Jr.’s $500 million reduced as well. But the younger Alfred was left in control of the Glassell Family Foundation and Glassell Producing Company Inc.
Curry Glassell lost her battle over the will, but while the Houston Chronicle was tracking her probate fight, the brother and sister were in the process of selling oil and gas interests to Chesapeake Energy.
In 2009, Glassell Producing sold oil and gas interests in Panola County to Chesapeake for $100 million.
This was going to end up being a headache for the siblings because over a decade earlier Curry gave her brother power of attorney to handle her real property, commodity and option transactions.
Curry ended up complaining that her brother didn’t keep her informed about her interests.
In the Chesapeake sale, overriding royalty rights were preserved and a family corporation, Cabo Blanco, was created to hold those rights. Curry claimed Cabo Blanco refused to provide her with stock certificates, or to explain what share of the business she owned, would not give her formation papers, minutes of board meetings or an accounting.
She sued GPC, Cabo Blanco and its three directors, including her brother. She sought an accounting and accused the defendants of fraud, shareholder oppression, constructive fraud, breach of fiduciary duty, gross negligence, conversion, breach of contract and unjust enrichment. There were other allegations, but you get the picture.
The defendants cited an arbitration clause in the Cabo Blanco agreement and sought arbitration for all claims arising out of its establishment.
The Sixth District Court of Appeals in Texarkana issued an opinion on the arbitration issue Jan. 9, 2014.
Prior to the Sixth District’s opinion, the opposing parties agreed that disputed claims against GPC, and the brother in his capacity as director of GPC that are being pushed toward arbitration are claims “that relate to the sale to Chesapeake, the creation of the overriding royalty interests and the creation or operations of Cabo Blanco.”
They also agreed on a list of claims not compelled by arbitration, including claims relating to Curry Glassell’s assignment of interest.
Sorting all this out, the Sixth District said, “Curry’s claims relating to the sale to Chesapeake, the creation of the overriding royalty interests, and the creation of or operations of Cabo Blanco against GPC, a signatory to the letter agreement, and its agent Alfred III, in his official capacity as an officer and director of GPC, should be submitted to arbitration. Additionally, we find that Curry’s claims against the non-signatories for the ‘overpayment of costs’ should be submitted to arbitration.
“Finally, we conclude that the remaining claims against the non-signatories are not subject to arbitration.”
The Cabo Blanco arbitration clause is pretty broad and the Sixth District uses a lot of ink giving us a history lesson on how this affects Curry’s efforts to limit its scope. It then proceeds to shoot down her arguments.
“We agree with GPC that Cabo Blanco was created to facilitate the sale and that Curry’s claims concerning the formation of Cabo Blanco should be arbitrated,” the court said.
The court went on to say, “All of Curry’s claims touch on the sale to Chesapeake. Curry explicitly seeks reimbursements for paying more than her proportionate share of the costs of negotiation. Without the contract, Curry would have had no obligation to pay costs of the negotiation. Curry also alleges fraud in the inducement and misrepresentation concerning the sale and payment of costs.
“The essence of all of Curry’s tort claims is that she was tricked into agreeing to the sale to Chesapeake, tricked into agreeing to form Cabo Blanco, and tricked into assigning her overriding royalties to Cabo Blanco. All of the claims against GPC relate to or are connected with the subject matter of the letter agreement—the sale to Chesapeake.”
And the letter agreement had that broad arbitration clause, so there.
The non-signatories—Cabo Blanco and the two directors not named Alfred the Third—were still to be decided.
“GPC argues Curry’s claims against these non-signatory defendants should nonetheless be sent to arbitration.”
The long and short of it is Curry lost that one, too.
This was a reversal, as the trial court was leaning more in Curry’s direction:
“We reverse and render judgment that the following claims should be submitted to arbitration: (1) the claims against GPC and Alfred, III, in his official capacity as an officer and director of GPC relating to the sale to Chesapeake, the creation of the overriding royalty interests, and the creation of or operations of Cabo Blanco and (2) the claims against Cabo Blanco, Dameris, Lindberg, and Alfred, III, individually and in his official capacity as a director of Cabo Blanco, concerning the overcharges or misrepresentations of the costs and expenses associated with the Chesapeake sale, the creation of overriding royalty interests, and/or the creation of Cabo Blanco.
Without counting sheep, I’m not clear on what claims remain that Justice Jack Carter, the opinion author, kept out of arbitration. But the lion’s share of this case will not be decided in the public eye.