Contact Information: If you are a holder of Eagle Rock common units and would like to discuss this action, your rights or interests, or want more information, please contact: Lawrence D. Levit Abraham, Fruchter & Twersky, LLP (212) 279-5050
Abraham, Fruchter & Twersky, LLP Announces Filing of Eagle Rock Energy Partners, L.P. Law Suit
| Source: Eagle Rock Energy Partners, L.P.
NEW YORK, NY--(Marketwire - February 9, 2010) - Abraham, Fruchter & Twersky, LLP today
announced that it filed a lawsuit in the Delaware Court of Chancery on
behalf of a common unitholder of Eagle Rock Energy Partners, L.P. (NASDAQ : EROC ) ("Eagle Rock" or the "Partnership") and all others similarly
situated, and also derivatively on behalf of the Partnership. The
complaint alleges that the controlling parties of Eagle Rock, through a
complex series of proposed transactions, and through a materially false and
misleading proxy statement, seek to enrich themselves at the expense of
Eagle Rock and those common unitholders who are not affiliated with the
Defendants or the Partnership's controlling entities (the "Public
Unitholders"). The Defendants named in the complaint include the
Partnership's general partner, the latter's' general partner, which has a
board of directors that makes the management decisions regarding Eagle Rock
(the "Board"), two limited partnerships that effectively control Eagle Rock
and all the members of the Board.
The complaint alleges that Defendants breached their fiduciary duties to
Eagle Rock and the Public Unitholders by acting in bad faith and operating
under the influence of the entities that control the Partnership. The
components of the proposed transactions (collectively, the "Transaction")
include a sale of some of Eagle Rock's most valuable assets, an equity
rights offering, a public equity offering, the issuance by the Partnership
of newly-issued units, a cash payment to certain interested parties and the
cancellation of subordinated units and incentive distribution rights, and
elimination of accumulated distribution arrearages on the common units as
well as the elimination of the concept of minimum quarterly payments to the
common unitholders. The complaint alleges that Defendants proposed the
Transaction, among other reasons, to trade virtually worthless subordinated
units for valuable consideration, to increase their percentage ownership of
common units at below market prices and to dilute unfairly the interests of
the Public Unitholders. The complaint further alleges that the Board and
certain other defendants seek to solicit approval of the Transaction from
the Public Unitholders with a materially false and misleading proxy
statement. The complaint alleges that the proxy statement is deficient
because, among other reasons, it does not disclose: that the subordinated
units are virtually worthless, yet are being traded for valuable
consideration; that the Board's conflicts committee had at lease one member
who was conflicted; and that certain valuation analyses appear to indicate
that the common units are more valuable if the Transaction does not occur.
Plaintiff is seeking to enjoin the Transaction.
This action was filed after an extensive investigation conducted by
Abraham, Fruchter & Twersky, LLP, which has significant experience
successfully prosecuting cases of this nature on behalf of investors.
Abraham, Fruchter & Twersky, LLP has successfully litigated similar actions
brought on behalf of limited partnership investors based on alleged
omissions of material facts.