Dear Investor Partners,
We are writing to provide you with the latest update on the Seminole County legal proceedings and to present a solution for all investors who have not yet contributed their share to the legal fund.
Since the bankruptcy filing by the current operator, MXP, we have taken additional proactive steps to help safeguard your investments. As we communicated in the last portal update, we have engaged a reputable second law firm with expertise in bankruptcies and similar cases of this nature. In the past few weeks, our legal efforts have gained significant momentum, with a hearing date scheduled for the 19th of this month. Our legal team is diligently building a robust case, with the intention of demonstrating MXP's multiple defaults according to the Joint Operating Agreement (JOA). Additionally, we have enlisted the assistance of a qualified local operator who will provide valuable insights and support in identifying MXP's JOA breaches.
Furthermore, our legal team is currently preparing a 2004 motion to compel MXP to disclose all financial records, including those of MXP's affiliate company, XP LLC, and major stakeholders.
In the state court, we are actively defending against liens placed on assets due to MXP's failure to settle invoices. We are also considering pursuing the recovery of funds from the purchaser who paid MXP $430,000.00 after ASE's notification and the provision of Lis pendens. Our legal counsel is confident that this case will be resolved expeditiously and in our favor.
In addition, we are considering issuing a discovery request targeting Rachel Patman to expedite a settlement applying additional pressure.
We firmly believe that the recent developments in the case and its rapid progress could potentially expedite the timeline for resuming operations. However, without the necessary funding, we will be unable to sustain the legal effort required to achieve success. While many investors have contributed to the legal fund and supported our case, regrettably, some have opted to not support and have not yet paid their invoice(s).
To regain rightful control over your assets, we must have the financial means to pursue this legal battle effectively. Therefore, we have devised a three-step strategy to address the funding shortfall:
1. By September 18th, we kindly request all investors who have not yet paid their invoices to cast their vote, indicating their support for the legal fund and their commitment to settle their outstanding invoices by September 30th.
2. Investors who do not cast their vote by the close of business on September 16th will automatically be recorded as a "no" vote, signifying their non-support for the legal fund.
3. On Monday, October 2nd, our CFO will cross-reference the legal fund payments. Investors with "no" votes and those who have not paid their invoices will be considered "no" votes. As the general partner and in the best interests of the Limited Partnership (ASE Phases 1-3), ASE will explore loan options to cover the "no" vote investors shortfall. For investors who have paid their invoices, there will be an opportunity to contribute additional capital to cover part of the legal fund shortfall, with a promise of a fourfold return (not on the original invoice amount).
For example, by covering a "no" vote investor's invoice of approximately $3,000.00 USD, you would receive approximately $12,000 in revenue upon regaining control over the Seminole County wells. It's important to note that "no" vote investors will only receive revenue once their invoice has been repaid fourfold.
As we mentioned at the outset of this letter, the case has gained momentum since MXP's bankruptcy filing, which is a positive development. However, this also adds urgency to ensure our legal team remains fully funded to secure a favorable outcome.
If you require further clarification or would like to discuss this matter in more detail, please do not hesitate to contact us.
We would kindly ask all investors who have not paid their invoice(s) in full to vote by emailing info@alphasevenenergy.com before the 18th of September.
Many thanks in advance.
Warm regards,
The Alpha Seven Energy team
