Opinion ID: 2165636
Heading Depth: 1
Heading Rank: 5

Heading: central's sale of assets

Text: In May 2000, Central issued a Property Sale Memorandum that offered for sale all of its oil and gas assets in five major packages: four regional packages and a separate package offering its royalty and overriding royalty interests in four states, including Nebraska. Some of the Nebraska assets were also sold in a subpackage of the Mid-Continent package. Bids were due by June 30. Around May 23, 2000, Coral received a copy of Central's sale memorandum and was aware that Central intended to sell all of its oil and gas assets. On May 26, Coral sent a letter to Energy Spectrum, Central's agent in the sale of its assets. Coral asserted its preferential right to purchase some properties listed in the memorandum. In June, Coral submitted a bid on the subpackage with assets covered by the JOA and repeated its preferential-purchase right regarding some of the assets in the subpackage and in the royalties package. On August 13, 2000, Central sold its Four Corners regional package to Elmridge Resources, Inc., for $20 million. Central sold all of its remaining assets, including its Nebraska assets, to EXCO on August 31 for $48 million. The EXCO transaction closed on September 22, and the Elmridge transaction closed on September 29. The effective date for both sales was June 1, 2000. Also on September 22, Central paid off its loan for its Nebraska assets and had no remaining interests in Nebraska. Before entering into the sale agreement with EXCO, Central and EXCO discussed whether Coral's preferential purchase right applied and determined that no parties to the JOA had a preferential purchase right because Central was selling substantially all of its assets in its sale agreement with EXCO. Central did not notify any of the parties to the JOA of their preferential purchase right or notify them that the sale to EXCO had occurred until September 22, 2000. Coral had no knowledge that Central had closed on the sale of its assets until afterward. On September 26, Coral wrote to both EXCO and Central to demand notice of the value of all sold assets that Coral claimed were covered by its preferential purchase right. The record indicates that on December 7, 2000, a notary public certified the parties' signatures on EXCO's transfer of overriding royalty interests to Zecchi. The transfer was effective June 1, 2000, and included overriding royalty interests in several oil and gas leases in Nebraska.