Legacy Reserves settles suit over 8% series A, B preferred stock

By Susanna Moon

Chicago, June 25 – Legacy Reserves LP said it agreed to amend the terms of a transaction so that its 8% series A preferred units will be converted into the right to receive 2.92033118 shares of common stock of New Legacy and its 8% series B preferred units into the right to receive 2.90650421 shares of common stock of New Legacy.

The preferreds may be converted into about 27.6 million total shares under a memorandum of understanding among Legacy, Legacy Reserves GP, LLC and Legacy Reserves Inc., according to a company announcement.

Under the original plan, the series A preferreds would have been converted in to 1.9620 shares and the series B preferreds into 1.72236 shares.

Legacy said it entered into the memorandum of understanding to settle the previously disclosed putative class action lawsuits filed by holders of Legacy’s preferred units.

The memorandum of understanding also allows for the parties to “negotiate in good faith to enter into a stipulation of settlement with respect to the actions and that, upon the execution of a stipulation of settlement, the holders of preferred units will not seek additional relief or damages based on and release all claims related to the transaction,” the release noted.

Legacy said it entered into the memorandum “solely to avoid the costs, disruption, delay and distraction of further litigation, and without admitting the validity of any allegations made in the complaints in the actions.”

Legacy Reserves announced in March that it was plan to restructure into a new company, Legacy Reserves Inc. with the intention of simplifying its corporate structure and improving its ability to raise capital and grow its business.

The issuer is a master limited partnership based in Midland, Texas focused on the acquisition and development of oil and natural gas properties.

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