With respect to the Royalty Class Action Claims (i.e. claims arising in connection with the Royalty Class Action Lawsuit after May 9, 2016), on the Distribution Date and in accordance with written payment instructions that the Debtors or the Reorganized Debtors provide, the Settlement Administrator shall wire transfer to the Reorganized Debtors the portion of the Settlement Cash Proceeds attributable to the Suspense Accounts for the benefit of the respective Settlement Class Members and shall otherwise issue and mail Distribution Checks to the Settlement Class Members entitled to such distributions in the amounts determined under the Settlement Agreement and the final Plan of Allocation and Distribution.
Each putative member of the Settlement Class who has not timely and properly elected to opt-out of the Settlement shall be a Settlement Class Member and shall receive distribution of the Settlement Consideration on account of their Royalty Class Action Claims according to the Plan of Allocation and Distribution.
The Settlement Administrator shall also distribute the value, if any, to which the Settlement Class is entitled under the 2020 Plan on account of the allowed 2016 Class Proof of Claim, as set forth in the Plan of Allocation and Distribution (any such distribution the “2016 Class Proof of Claim Distribution”).
Each putative member of the Settlement Class who has not (1) timely and properly elected to opt-out of the Settlement; (2) opted out of the Plan Releases; or (3) objected to the Plan shall be a Settlement Class Member and shall receive distribution of the value, if any, to which the Settlement Class is entitled on account of the allowed 2016 Class Proof of Claim under the 2020 Plan, according to the Plan of Allocation and Distribution.
The treatment of the 2016 Class Proof of Claim shall be determined in connection with the 2020 Bankruptcy Cases, and there cannot be any assurances that the 2016 Proof of Claim will receive any value on account of such claim. In connection with the 2020 Bankruptcy Cases, the Debtors have proposed a plan of reorganization (the “Proposed Plan”) which provides that all equity interests in the Debtors (including equity interests on account of the 2016 Class Proof of Claim) are cancelled as of the effective date of the Plan. The Proposed Plan further proposes that in exchange for granting voluntary third party releases and not objecting to the Proposed Plan, certain equity interests (including equity interests on account of the 2016 Class Proof of Claim) are entitled to receive a limited distribution (as set forth in greater detail in Appendix I). The Proposed Plan is subject to various conditions, including Bankruptcy Court approval.
The Judgments shall provide that the Released Parties, Settlement Class Counsel, and/or the Class Representative have no liability to any Class Member for mis-payments, late payment, nonpayment, overpayments, underpayments, interest, errors, or omissions as a result of the administration of the Settlement, including, without limitation, the distribution and disposition of the Settlement Cash Proceeds.
Defendant has provided or will provide data on the amounts paid to purchasers in respect of each Class Well that had a percent-of-proceeds (“POP”), percent-of-index (“POI”), or percent-of-liquids (“POL”) type of fee arrangement (the calculation for each well an “Individual Well POP Fee”) for three periods: (i) June 1, 2006 to April 30, 2016 (“Period I”); (ii) May 1, 2016 to May 31, 2016 (“Period II”); and (iii) June 1, 2016 to the 2020 Petition Date (“Period III”).
For each period, the Individual Well POP Fee shall be multiplied against the most current royalty owners’ net revenue interest (“NRI”) in such Class Well (the result of such calculation, the “Settlement Class Member Share”). “Most current” shall mean current as of the 2020 Petition Date, the date that a Class Well was plugged and abandoned, or the date of sale by Defendant of its interest therein, as applicable. For Period II, each Settlement Class Member Share shall be further bifurcated into the period prior to and including the date on which the Prior Bankruptcy Cases were commenced (May 9, 2016, the “Prior Petition Date”), and the period after the Prior Petition Date, by multiplying the result by 9/31 and 22/31. The product of such calculations shall be assigned to Period I and Period III, respectively.
For each period, each Settlement Class Member Share shall be divided by the aggregate of all Settlement Class Member Shares (for all Class Wells) to determine the Settlement Class Member’s pro rata portion of the Settlement Consideration for such period.
The Settlement Consideration shall be allocated as follows. For Period I, the Settlement Administrator shall apply each Settlement Class Member’s pro rata portion (including the adjustment on account of the bifurcated calculation for Period II, as set forth above) to the 1,432,300 shares of Class A common stock of Chaparral Energy, Inc. to which the 2016 Class Claimants would have been entitled pursuant to the Prior Bankruptcy Plan. The Settlement Administrator shall then determine the value, if any, to which each Settlement Class Member shall be entitled on account of any 2016 Class Proof of Claim Distribution. For Period III, the Settlement Administrator shall apply the Settlement Class Member’s pro rata portion (including the adjustment on account of the bifurcated calculation for Period II, as set forth above) to the $2,500,000.00 Settlement Cash Proceeds in order to determine the share of the Settlement Cash Proceeds, if any, allocable to each Settlement Class Member.
A draft of the Plan of Allocation and Distribution that details more fully the allocation process is available on the Important Documents page and remains subject to Court approval.