The Honorable R.K. Sandill entered a $196 million judgment for Gibbs & Bruns client D. Bobbitt Noel, Jr. against Dallas billionaire Trevor Rees-Jones and Devon Energy Production Co., L.P. (DVN) on May 18, 2011. The damages for fraud and breach of fiduciary duty judgment were based on a verdict reached by a Houston jury on March 14, 2011.
The $196 million awarded to Noel, who was a minority interest owner in Rees-Jones’s former company, Chief Holdings LLC, includes $116,390,628 in legal damages against Rees-Jones and Devon jointly and severally, plus $16,773,003.84 in pre-judgment interest on that amount. In addition, Noel was awarded $62,937,547 in equitable disgorgement damages against Rees-Jones.
Following a complex five-week trial, the jury in the 127th Judicial District Court 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 was 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.
In entering judgment in Noel’s favor, Judge Sandill concurred with the jury verdict and specifically concluded that the evidence established an intentional breach of fiduciary duty by Rees-Jones and that “the timing and nature of the breach alleged and proven [by Noel] in this case were serious and central to the fiduciary duties owed by Rees-Jones.”
Gibbs & Bruns’ trial team was led by partners Grant Harvey, Robin Gibbs and Brian T. Ross; and associate Ayesha Najam. Robert Burford and his Houston-based firm Burford, Hawash, Meade, & Gaston LLP served as co-counsel.
Rees-Jones was represented by Thompson & Knight, LLP. Devon was represented by Skadden, Arps, Slate, Meagher & Flom LLP.