Source: Gibbs & Bruns LLP
Gibbs & Bruns LLP announced today that a Texas jury awarded a $116 million fraud verdict late Monday against Dallas billionaire Trevor Rees-Jones and energy giant Devon Energy Production Co., L.P. (DVN). The damages for fraud and breach of fiduciary duty were awarded to D. Bobbitt Noel, Jr., who was a minority interest owner in Rees-Jones' former company, Chief Holdings LLC (Chief).
Following a complex five-week trial, the jury in the District Court of the 127th Judicial District of Harris County, Texas, found that Rees-Jones committed fraud and breached his fiduciary duties to Noel in connection with the 2004 buy-out of Noel's minority stake in Chief. Chief was subsequently sold to Devon in 2006 for over $2 billion. The jury also determined that Rees-Jones profited in excess of $360 million by breaching his fiduciary duties. Devon, as the successor in interest to Chief, was also found liable for fraud committed by Chief.
Noel, who was represented by Gibbs & Bruns LLP, had been a long-time friend of Rees-Jones and a founding member of Chief, an oil and gas company that focused its efforts in the vast Barnett Shale of North Texas. Rees-Jones was the manager and majority owner of the company, both when Chief was formed and at the time of the buy-out. Less than two years after Noel's minority stake was bought out, Chief was sold to Devon at a valuation of approximately twenty times the value paid to Noel.
"We are thrilled with this verdict," said Gibbs & Bruns partner Grant J. Harvey. "We always thought justice would prevail, despite the wealth and resources of the defendants. The defendants made every effort to discredit Bobbitt, but the jury saw through that. They listened carefully to the evidence and reached the right result. It is enormously satisfying to get justice for such a deserving client." Harvey also noted that the defendants had asserted several counterclaims against Noel, all of which were either rejected by the jury, abandoned at trial, or dismissed as a matter of law by the trial court.
Gibbs & Bruns' trial team was led by partners Grant Harvey, Robin Gibbs and Brian T. Ross. Ayesha Najam, an associate at the firm, also played a key role in the trial. Robert Burford and his Houston-based firm Burford, Hawash, Meade, & Gaston LLP served as co-counsel to Gibbs & Bruns.
Rees-Jones was represented by Thompson & Knight, LLP. Devon was represented by Skadden, Arps, Slate, Meagher & Flom LLP.