Docstoc

BOOTHE, AND WA BOOTHE FAMILY, LT

Document Sample
BOOTHE, AND WA BOOTHE FAMILY, LT Powered By Docstoc
					                               No.05-09-01019-CV


                       COURT OF APPEALS FOR THE
                        FIFTH DISTRICT OF TEXAS
                               DaHas, Texas


ALLIANCE ROYALTIES, LLC AND
ALLIANCE ROYALTIES, INC.

Appellants

v.

WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
W.A. BOOTHE FAMILY, LTD., GVLP, LLC,
DVLP, LLC, NVLP, LLC, AND RVLP, LLC,

Appellees.


                   Appeal from the County Court at Law No.5
                             Dallas County, Texas



 RESPONSE BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D.,
    WENDY J. BOOTHE, AND W.A. BOOTHE FAMILY, LTD.


                                  GRUBER HURST JOHANSEN & HAIL, LLP
                                  Mark L. Johansen
                                  Vanessa J. Rush
                                  Jason A. Copling
                                  1445 Ross Avenue, 25 TH Floor
                                  Dallas, Texas 75202
                                  Telephone (214) 855-6800
                                  Facsimile (214) 866-6808
                                  COUNSEL FOR APPELLEES WILLIAM A.
                                  BOOTHE, M.D., WENDY J. BOOTHE, AND
                                  W.A. BOOTHE FAMILY, LTD.
                           Oral Argument Requested


BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--4737I_I
                    IDENTITY OF PARTIES AND COUNSEL

         Pursuant to TEX. R. ApP. P. 38.1(a), the following is a complete list of all

parties to the trial court's August 5, 2009 temporary injunction order and the

names and addresses of all trial counsel and appellate counsel:

         1.     Appellees William A. Boothe, M.D., Wendy 1. Boothe, and W.A.

Boothe Family Ltd. are represented by Mark Johansen, Jason Copling, and

Vanessa J. Rush, of the law firm Gruber Hurst Johansen & Hail, LLP, 1445 Ross

Avenue, 25th Floor, Dallas, Texas 75202, telephone (214) 855-6800, and

facsimile (214) 855-6808.

         2.    Appellees NVLP, RVLP, GVLP, and DVLP are represented by W.

Ross Forbes, Jason P. Shanks, and Jude T. Hickland, of the law firm Jackson

Walker L.L.P., 901 Main Street, Suite 6000, Dallas, Texas 75202.

         3.    Appellants Alliance LLC and Alliance Inc. are represented by

Kenneth W. Biermacher, James B. Greer, and Kevin P. Perkins, of the law firm

Kane Russell Coleman & Logan PC, 3700 Thanksgiving Tower, 1601 Elm Street,

Dallas, Texas 75201 and Jeffrey S. Levinger and Brett Kutnick, of the law firm

Hankinson Levinger LLP, 750 N. St. Paul Street, Suite 1800, Dallas, Texas

75201.

         4.    Interpleader Defendants Dallen and Peggy Wendt are represented by

Jeffrey T. Knebel and Jason S. Scott, of the law finn Osborne, Helman, Knebel &

Deleery, L.L.P., 301 Congress Avenue, Suite 1910, Austin, Texas 78701.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--4737I_l                                            Page ii
         5.   Plaintiff Compass Royalty Management, LLC is represented by

Stephen F. Malouf, David Evans, and Jonathan Nockels, of The Law Officies of

Stephen F. Malouf, PC, 3811 Turtle Creek Blvd., Suite 1600, Dallas, Texas

75219, and Amy B. Ganci and Kevin Ganci, of The Ganci Firm, 3811 Turtle

Creek Blvd., Suite 1900, Dallas, Texas 75291.

         6.   Third-Party Defendant Theodore Lustig and the Law Offices of

Theodore S. Lustig, are represented by Jeffrey Cook and Adam Barela, of the law

firm Sullivan & Cook, LLC, 2301 Cedar Springs Road, Suite 200, Dallas, Texas

75201.

         7.   Third-Party Defendants Glenn Henderson and Henderson Edwards

Wilson        are represented by James A. Fisher and Shannon L.K. Welch, of the

law firm Fisher & Holmes, 2800 Lincoln Plaza, 500 North Akard Street, Dallas,

Texas 75201.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371 1                                     Page iii
                                        TABLE OF CONTENTS

IDENTITY OF PARTIES AND COUNSEL ...................................................................... ii
TABLE OF CONTENTS ................................................................................................... iv
TABLE OF AUTHORITIES .............................................................................................. vi
STATEMENT OF THE CASE ........................................................................................ viii
STATEMENT REGARDING ORAL ARGUMENT ......................................................... x
ISSUES PRESENTED ....................................................................................................... xi
STATEMENT OF FACTS .................................................................................................. 1
          A.       Summary of Alliance LLC's and Alliance Inc. 's investment scam
                   and nefarious litigation strategy .................................................................... 1

         B.        Through gross misrepresentations and material omISSIOns,
                   Appellants induced the Boothes to invest more than $7.5 million
                   dollars in Appellants' investment scam ........................................................ 4

          C.       Appellants and their agents and alter egos made gross
                   misrepresentations and omissions to the Boothes regarding the
                   investment plan .............................................................................................. 9

         D.        Despite guarantees of financial stability and adequate funding,
                   Appellants and their agents suddenly informed the Boothes that their
                   investments had evaporated ......................................................................... 14

         E.        The Partial Releases executed by Appellants' agents/alter egos admit
                   that the Boothes, via their trusts, own an interest in the Noble
                   Royalties interests and that Appellants' agents/alter egos promised to
                   convey legal title to the Noble Royalties interests directly to
                   Appellee W.A. Boothe Family, Ltd ............................................................ 17

         F.        Following commencement of this litigation by Compass, Appellants
                   sought to thwart the interpleader process by discontinuing
                   Compass's Management Agreements ......................................................... 19

SUMMARY OF ARGUMENT ......................................................................................... 23
ARGUMENT ..................................................................................................................... 24
         A.        Standard of review ....................................................................................... 24
         B.        A temporary injunction is an equitable remedy whose purpose is to
                   preserve the status quo ................................................................................ 24


BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                                                            Pageiv
ISSUE 1:           The trial court properly granted the temporary injunction prohibiting
                   Appellants' attempt to terminate the Management Agreements
                   because the Boothes established each element necessary for
                   injunctive relief ........................................................................................... 25

         A.        Element # 1: The Boothes have pled numerous causes of action
                   against Appellants ....................................................................................... 25

         B.        Element #2: The Boothes established a probable right to the relief
                   sought .......................................................................................................... 26

         C.        Element #3: The Boothes established a probable, imminent, and
                   irreparable injury in the interim .................................................................. 28

         D.        The Boothes established they have no adequate legal remedy ................... 29

         E.        The temporary injunction maintains the status quo; it is Appellants
                   who seek to disrupt the status quo ............................................................... 33

         F.        Texas courts broad powers of equity to protect interpleaded funds
                   and to enjoin enforcement of contracts if necessary ................................... 33

ISSUE 2:           As admitted by Appellants, the Boothes have an interest in the
                   disputed funds and therefore have standing to assert their claims and
                   obtain injunctive relief.. ............................................................................... 36

         A.        Appellants admitted the Boothes have an equitable interest in the
                   funds and that legal title will be transferred to Appellee W.A. Boothe
                   Family, Ltd .................................................................................................. 36

         B.        Appellants' unclean hands bar them from claiming that the "levels of
                   removal" they intentionally built into this investment scam prevent
                   the Boothes from seeking redress for Appellants' wrongs ......................... 37

         C.        The Boothes have standing as third-party beneficiaries of the
                   Management Agreements ............................................................................ 38

CONCLUSION ................................................................................................................. 39




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                                                                 Page   V
                                        TABLE OF AUTHORITIES

Bk. of Texas v. Gaubert, 286 S.W.3d 546
       (Tex. App.-Dallas 2009, pet. filed) ...................................................................... 24

Bureaucracy Online, Inc. v. Schiller, 145 S.W.3d 826
      (Tex. App.-Dallas 2004, pet. ref d) ................................................................................. 26

Butnaru v. Ford Motor Co., 84 S.W.3d 198 (Tex. 2002) .................................... 24, 25, 34, 35

Harris Cty. v. Sellers, 468 S.W.2d 950
       (Tex. Civ. App.-Houston [1 51 Dist.] 1971), rev 'd on other grounds, 483 S.W.2d
       242 (Tex. 1972) ................................................................................................................. 34

Heggy v. American Trading Employee Retirement Account Plan, 110 S.W.3d 692
      (Tex. App.-Houston [14th Dist.] 2003, pet. den'd) .......................................................... 35

lAC, Ltd. v. Bell Helicopter Textron, Inc., 160 S.W.3d 191
       (Tex. App.-Fort Worth [2 nd Dist.] 2005, pet. refd) ............................................ 27, 28, 31

In re Palm Harbor Homes, Inc .. 195 S. W.3d 672 (Tex. 2006) ..................................................... 38

Iranian Muslim Org. v. City of San Antonio, 615 S.W.2d 202 (Tex. 1981) .................................. 25

Irving Bk. & Trust Co. v. Second Land Corp., 544 S.W.2d 684
        (Tex. Civ. App.-Dallas 1976, writ refd n.r.e.) ......................................................... 27, 30

Khaledi v. HK. Global Trading, Ltd., 126 S.W.3d 273
       (Tex. App.-San Antonio 2003, pet. den'd) ..................................................................... 31

Northshore Bk. v. Commercial Credit Corp., 668 S. W.2d 787
       (Tex. App.-Houston [14th Dist.] 1984, writ refd n.r.e.) ........................................... 33, 34

Rogers v. Howell, 592 S.W.2d 402
       (Tex. App.-Dallas 1979, writ refd n.r.e.) ....................................................................... 39

Savings & Profit Sharing Fund of Sears Employees v. Stubbs, 734 S.W.2d 76
       (Tex. App.-Austin 1987, pet. den'd) ............................................................................... 35

State v. Cook United, Inc., 464 S.W.2d 105 (Tex. 1971) .................................................. 28

State v. Southwestern Bell Tel. Co., 526 S.W.2d 526 (Tex. 1975) ................................................ 33

Sun Oil v. Whitaker, 424 S.W.2d 216 (Tex. 1968) ........................................................................ 29

Surko Enters., Inc. v. Borg-Warner Acceptance Corp., 782 S.W.2d 223

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                                                                   Page vi
          (Tex. App.-Houston [1 SI Dist.] 1989, no writ) .......................................................... 27,31

Texas lnd. Gas v. Phoenix Metallurgical Corp., 828 S.W.2d 529
       (Tex. App.-Houston [1 sl Dist.] 1992, pet. den'd) ...................................................... 30,31

Transport Co. v. Robertson Transports Inc., 261 S.W.2d 549 (Tex. 1953) .................................. 32

Union Gas Corp. v. Gisler, 129 S.W.3d 145
      (Tex. App.-Corpus Christi 2003, pet. den'd) .................................................................. 33

Walling v. Matca(fe, 863 S.W.2d 56
       (Tex. 1993) ............................................................................................................ 25, 26, 30




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                                                                 Page vii
                         STATEMENT OF THE CASE

       Nature of the case. Compass Royalty Management, L.L.c. ("Compass")

commenced this interpleader action on April 10, 2009, to resolve competing

claims to certain oil and gas royalty interests received and managed by Compass.

(l CR 20-60.) Compass has named Alliance Royalties, LLC, ("Alliance LLC"),

Alliance Royalties, Inc. ("Alliance Inc."), William A. Boothe, M.D., ("Dr.

Boothe"), Dallen and Peggy Wendt ("Wendts"), GVLP, LLC, DVLP LLC, NVLP,

LLC, RVLP, LLC ("Vento Entities"), and John Does 1-50 as the interpleader

defendants having competing claims to the royalty interests. (1 CR 20,287.)

       Compass immediately began tendering into the court's registry the monthly

revenues it receives through its management of the disputed royalty interests. (1

CR 25.)

       Dr. Boothe and intervenors Wendy Boothe and W.A. Boothe Family, Ltd.

(the "Boothes"), among others, subsequently filed cross-claims against Alliance

LLC and Alliance Inc. for, inter alia, fraud, negligent misrepresentation, DTP A

violations, securities fraud, breach of contract, and declaratory judgment related to

an investment scam perpetrated by Alliance LLC and Alliance Inc. that has

deprived the Boothes of millions of dollars they invested in the aforementioned

royalty interests through a variety of investment vehicles designed and sold to

them by Alliance LLC and Alliance Inc. (l CR 234-257.)

       Course of proceedings. Along with their cross-claims, and in addition to

the other appellees in this appeal, the Boothes requested injunctive relief

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                          Page viii
prohibiting Alliance LLC and Alliance Inc. from unilaterally terminating

Compass's management contracts so that Compass could continue depositing the

disputed royalty interest revenues into the Court's registry in order to maintain the

status quo while the merits of the parties' claims are adjudicated. (1 CR 234-257.)

Compass agreed to the requested injunctive relief. Alliance LLC and Alliance Inc.

opposed injunctive relief, asserting that rather than being deposited in the Court's

registry, the disputed funds should be paid directly to Alliance Inc. - one of the

very parties claiming a right to the funds. Neither Alliance LLC nor Alliance Inc.

filed a written response to the request for injunctive relief.

       Trial court disposition.     On June 18, 2009, the trial court granted the

Boothes' request for a temporary restraining order, which was extended by

agreement pending a temporary injunction hearing. (2 CR 263-65, 367-68.) On

August 5, 2009, the trial court issued a temporary injunction prohibiting Alliance

LLC and Alliance Inc. from terminating Compass's management contracts, in

effect ensuring that Compass could continue paying the disputed funds into the

Court's registry until such time as the parties' competing claims to the funds can

be determined. (3 CR 802-04.)

       Alliance LLC and Alliance Inc. ("Appellants") filed their notice of appeal

on August 25, 2009, challenging the trial court's Order Granting Temporary

Injunction (1 CR 4-10.)




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           Pageix
             STATEMENT REGARDING ORAL ARGUMENT

      The Boothes believe oral argument will assist the Court in its analysis of

the facts and issues presented by this appeal and for this reason respectfully

request oral argument be granted.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                       Page x
                             ISSUES PRESENTED

       Issue 1:      The trial court properly granted the temporary injunction

prohibiting Appellants' attempt to terminate the Management Agreements because

the Boothes established each element necessary for injunctive relief.



       Issue 2:      As admitted by Appellants, the Boothes have an interest in

the disputed funds and therefore have standing to assert their claims and obtain

injunctive relief.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                      Page xi
                           STATEMENT OF FACTS

A.     Summary of Alliance LLC's and Alliance Inc.'s investment scam and
       nefarious litigation strategy.

       In order to facilitate an overview of the complex facts involved in this

matter prior to a full discussion with record references, the Boothes offer the

following preliminary factual summary of Alliance LLC's and Alliance Inc.'s

investment scam and nefarious litigation strategy.

       The Boothes have lost approximately $5.3 million dollars due to Alliance

LLC's and Alliance Inc.' s investment scam. In a nutshell, Alliance LLC, along

with a string of agents and alter egos, convinced the Boothes and other innocent

investors to give Alliance LLC millions of dollars to invest in what they were told

was a guaranteed, no-risk investment plan. Alliance LLC and its agents/alter egos

directed the Boothes to set up a complex web of investment vehicles, ensuring - in

Alliance's own self-interest - that the Boothes would have no direct contractual

relationship with Alliance LLC or Alliance, Inc., nor any direct ownership of the

oil and gas interests.

       Alliance LLC then took the approximately $26.3 million dollars given to it

by unsuspecting investors and gave it, in the form of several loans, to one of its

alter egos, Alliance, Inc., a company whose existence and involvement was never

disclosed to the Boothes. Alliance Inc. then invested the $26.3 million, in its own

name, in oil and gas interests offered by a company caled Noble Royalties. The

monthly revenues from these oil and gas interests are managed and disbursed by



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                        PAGE 1
interpleader Compass, a disinterested third party and subsidiary of Noble

Royalties.

       When Alliance Inc. receives the monthly distribution from Compass on the

oil and gas interests, it does not distribute these revenues to the original investors

as one would expect were this a legitimate investment plan. Instead, Alliance Inc.

- again, an entity the investors had never even heard of - pays Alliance LLC a

comparatively small "interest" on the promissory notes and pockets the entire

remainder of the oil and gas revenues for itself. Alliance LLC then pays the

investors, including the Boothes, from the mere "interest" on the notes, rather than

from the revenues actually received on the Noble Royalties oil and gas interests.

       In short, Alliance LLC and Alliance Inc. are operating a complex

investment scheme in which they have taken millions of dollars from unsuspecting

investors, kept for themselves the enormous returns from the touted oil and gas

interests, and paid the investors only interest on fraudulent promissory notes the

investors knew nothing about, amounting to only a tiny fraction of the actual

revenues received on their investments. Instead of investing in oil and gas interests

as they were led to believe, the Boothes and other investors have been duped into

investing in interest on useless promissory notes that serve no purpose other than

to hide the actual revenues being pocketed by Alliance Inc.

      After many years of Alliance Inc. and its agents/alter egos profiting

enormously from this fraudulent scheme, the Boothes and other investors learned

that their investments were nearly worthless and asserted their legal and equitable

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
ANDW.A. BOOTHE FAMILY LTD.--47371_1                                            PAGE2
rights to the revenues actually received on the Noble Royalties oil and gas

interests. Compass, the disinterested third party that manages and distributes the

revenues, thereafter filed this interpleader action to allow the court to adjudicate

the investors' claims to the revenues. As required of an interpleading party,

Compass began depositing the revenues it manages into the registry of the court.

       In a nefarious maneuver designed to thwart the very purpose of an

interpleader action, Alliance Inc. immediately sought to terminate the management

contracts it had with Compass - an act which, had it been allowed take effect,

would have eliminated Compass as the manager of the revenues and instead

placed unilateral control over the revenue distributions in the hands of Alliance

Inc. itself. Alliance Inc. is an "offshore" entity over which it has asserted the trial

court has no jurisdiction. Its fraudulent scheme now being exposed, Alliance Inc.

and its agents/alter egos would simply fold up their card table and disappear with

the remaining revenues rightfully belonging to the investors were it pennitted

unilateral control over the revenue distributions.

       Indeed, the trial court's injunction order expressly found that, unless

Alliance LLC and Alliance Inc. were enjoined from terminating the management

contracts with Compass, "funds belonging to the Interpleader Defendants will be

sent offshore, become lost, and/or otherwise become inaccessible to the

Interpleader Defendants in the future." (3 CR 803.) The entire purpose of an

interpleader action and the deposit of disputed funds into the court's registry

would be thwarted.

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                            PAGE 3
       On appeal, Alliance LLC and Alliance Inc. now assert various disingenuous

arguments like "lack of standing" and "levels of removal from Alliance LLC" in

order to un-do the status quo and deprive the investors of their day in court. As

will be shown, Alliance LLC and Alliance Inc. have unclean hands and cannot

rely, under either law or equity, upon the very structure of their own fraudulent

investment scheme to now argue the investors have no standing to attempt to

recover their own money from this shell game. Justice cannot permit the result

sought by Appellants.

B.     Through gross misrepresentations and material omissions, Appellants
       induced the Boothes to invest more than $7.5 million dollars in Appellants'
       investment scam.

       Dr. Boothe is a well-known, highly successful lasik eye surgeon in the

Dallas area. (l SUpp. CR 12 at 13:13-20; 37 at 10:4-7.) Seeking to protect their

assets for their children, Dr. and Mrs. Boothe in approximately 2001 sought

investment guidance from their estate attorney, Third-Party Defendant Terry

Lustig, and their accountant, Third-Party Defendant Glenn Henderson. (l SUpp.

CR 12 at 13:13-14:13.) Lustig and Henderson referred the Boothes to Steve

Donaldson, who represented himself to be an insurance salesman working for a

company named Dunhill and Foster, (l Supp. CR 36-37 at 8: 17-9: 13.), and Duane

Crithfield, whom the Boothes were told was the managing director of an entity

called Alliance Holding Company. (l SUpp. CR 11 at 10:22-25; 28 at 78:15-18; 91

at 34:1-3.) Foster and Dunhill is apparently a marketing agent that makes sales




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                       PAGE4
pitches at national conferences to solicit business for the other entities discussed

herein. (1 Supp. 87 at 18:3-20: 16.)

       No one, including Appellants, informed the Boothes that their estate

attorney, Terry Lustig, and their accountant, Glenn Henderson, took unethical

kick-backs in the form of commissions for their referral of the Boothes to

Appellants and their agents/alter egos. (l SUpp. CR 13 at 17:1-18:9; 112 at 117:6-

118:18.) Dr. Boothe testified he "absolutely would not have invested had [he]

known [Lustig and Henderson] were earning a percentage commission off the

investment." (1 SUpp. CR 13 at 18:7-9.)

       No one informed the Boothes that each of the entities discussed below -

including the trust companies, insurance companies, and other entities involved in

the investment scheme - were all owned and managed by the same group of

people. (1 Supp. CR 12 at 15:12-19,37 at 10:15-20.) Dr. and Mrs. Boothe both

testified that they would not have invested with Appellants had they known that

the trust companies, insurance companies, and other entities involved in the

investment scheme and detailed below were all owned and managed by the same

group of people. (1 Supp. CR 12 at 15:12-25, 37 at 10:15-11:1.)

      In discussing their investment goals with Lustig, Henderson, Donaldson,

and Crithfield, the Boothes emphasized that they wanted a guaranteed investment

and liquid funds that they could draw from at any time. (1 SUpp. CR 12 at 15 :2-

20.) From the various investment plans offered, the Boothes chose a 9% CDO

(collateralized debt obligation) Fund and a plan called the Fixed 8 Fund, choosing

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGES
the latter because it was represented to be a guaranteed, liquid fund yielding at

least an 8% return on the Boothes' investment and because they could access their

funds at any time via a letter of wishes. (1 Supp. CR 10-11 at 8:25-9:11, 13 at

18:22-19:4 and 19:16-20:19, 37-38 at 12:13-13:3.) Wendy Boothe testified that

Lustig, Henderson, Donaldson, and Crithfield represented to the Boothes that "the

Fixed 8 was for a 5-year term, that it was guaranteed and backed up by various

assets they had and by insurance," that "there was no risk because there was so

much backup," and that "all we had to do was submit a letter of wishes, and we

would get whatever funds we requested." (l Supp. CR 38 at 15:3-7, 15:11-13,

15:24-16:1.) Mr. Crithfield himself confirmed in his testimony that the Fixed 8

Fund was represented as having "no risk." (l Supp. 116 at 135:5-8.)

       In order to effectuate their investment, the Boothes were directed to set up

two trusts, W.A.B. Family Trust and W.J.B. Family Trust (the "Trusts"), with the

trustee of each being First Fidelity Trust, Ltd. (l Supp. CR 120 at 149:12-22.)

Keithley Lake is the managing director of First Fidelity Trust, Ltd. (Id.) No one

told the Boothes that Keithley Lake was also a director of Alliance Holding

Company, and the manager of Alliance LLC (l Supp. CR 143 at 21: 16-19; 1

Supp. 158 at 84:19-22.) Mr. Lake is also an apparent agent of Alliance Inc., being

listed in documents signed by and between Alliance Inc. and Interpleader

Compass as the party to whom notice should be sent on behalf of Alliance Inc.,

although Alliance Inc.' s president purports to have "no idea why." (4 Exh. 101 at

p. 7 of 13; 1 Supp. CR 97 at 59:17-20.)

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                        PAGE6
       Keithley Lake, as acting trustee for the Boothes' trusts, caused the Trusts to

purchase multiple life insurance policies issued by two "insurance companies,"

Citadel Life Insurance Company and Fidelity Insurance Company. (1 Supp. CR

13-14 at 20:20-21:9.) No one told the Boothes that Fidelity Insurance Company is

99% owned by Alliance LLC or that Citadel Insurance Company is a member of

Alliance LLC. (1 Supp. 106 at 93:20-95:2; 4 Exh. 121 at p. 14.)

       To further this supposed investment plan, attorney Lustig formed various

limited liability companies that were owned within these life insurance policies.

Another entity, Westminster, Hope & Turnberry, Ltd., actually held and managed

the Trusts' investments. (1 Supp. CR 91 at 33:13-15.) No one told the Boothes that

Westminster, Hope & Turnberry, Ltd. is a wholly owned subsidiary of Alliance

Holding Company or that Duane Crithfield is a director of Westminster, Hope &

Turnberry, Ltd. (l Supp. CR 91 at 33:18-20; 114-15 at 128:22-129:10.)

       The above investment structure, devised by Lustig, Henderson, Donald,

Crithfield, Appellants, and their agents/alter egos, is further explained by Duane

Crithfield's own testimony and by various charts provided by Appellants. (1 Supp.

CR 88-89 at 24:20-27: 16; Appellant's Brief at p. 9.)

       Believing that their hard-earned money was safely invested in guaranteed,

no-risk funds, the Boothes beginning in 2001 transferred in excess of $7.5 million

dollars into the investment vehicles created at the direction of Lustig, Henderson,

Donaldson, and Crithfield. (l Supp. CR 11 at 10:4-5, 11 :16-20.)



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_'                                          PAGE 7
        Subsequently, Lustig, Henderson, Donaldson, and Crithfield, and the

various entities they represented, told the Boothes that their Trusts' investments in

the Fixed 8 Fund were backed by oil and gas interests offered by the highly

reputable finn Noble Royalties. (1 Supp. 18 at 37:12-18; 28 at 80:18-24.) Dr.

Boothe knew of Noble Royalties and trusted their good reputation. (1 Supp. CR 19

at 43: 12-19.) Appellants and their agents/alter egos represented to the Boothes that

Alliance LLC would be the record owner of the Noble Royalties interests in which

the Boothes were investing. (l SUpp. CR 18 at 37:12-14.) Indeed, Westminster,

Hope & Tumberry, Ltd.'s promotional materials on its web site expressly

represented that Alliance LLC was the record owner of the Noble Royalties

interests in which the Boothes' money was ultimately invested: "Account

Description. Alliance Royalties, LLC has purchased oil royalty programs through

Noble Royalties of Dallas, Texas, a leader in the oil royalty field, which

specializes in acquiring and managing valuable mineral and royalty properties

with proven production histories and upside potentiaL ... The investment goal of

the Alliance Royalties, LLC is to generate its revenue from royalties ... " (4 Exh.

109.)

        To manage the Noble Royalties interests and distribute the revenues

therefrom,   Appellants   entered   into   four   Management     Agreements     with

Interpleader Compass, a wholly owned subsidiary of Noble Royalties. (4 Exh. 102

at 102-18,103 at 103-19,104 at 104-17,105 at 1-5-16; 1 Supp. CR 180 at 7:23-

24.) Compass is in the business of managing and distributing oil and gas investor

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                          PAGE8
funds for Noble Royalties' investors. (1 Supp. CR 180 at 7:25-8:6.) Accordingly,

Compass is the entity that collects earnings from the Noble Royalties interests and

distributes such earnings directly to Alliance Inc. It is unclear whether Alliance

Inc., Alliance LLC, or some other entity simply called Alliance Royalties, is

actually the contracting party to the Management Agreements, as several of the

agreements and their attachments refer to the investing signatory as Alliance LLC

or Alliance Royalties rather than Alliance Inc. (4 Exh. 104 at 104-17, 104-25; 105

at 105-1, 105-2, 105-3, 105-14, 105-15, 105-16, 105-24.) Compass's President,

Daniel Monticelli, testified he does not know whether the Alliance entity that

invested in the Noble Royalties offerings was Alliance Inc. or Alliance LLC. (l

Supp. CR 182 at 15-9-12.)

C.    Appellants and their agents and alter egos made gross
      misrepresentations and omissions to the Boothes regarding the
      investment plan.

      Although unbeknownst to the Boothes at the time, Appellants and their

agents and alter egos made gross misrepresentations and omissions to the Boothes

regarding the nature of the supposed investment plan. First, no one told the

Boothes that the same group of entities and individuals - including Crithfield,

Lake, Donaldson, Lustig, and Alliance Holding Company - formed, owned,

managed, or received kickbacks from not only the trustee of the Boothes' Trusts,

First Fidelity Trust, Ltd., but also the two purported insurance companies, Citadel

and Fidelity, the company managing their investments, Westminster, Hope &

Turnberry, Ltd., as well as Appellants Alliance LLC and Alliance Inc., all under

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE   9
the umbrella of the "Alliance Group." Most, if not all, of these entities and

individuals owed the Boothes fiduciary duties by reason of their relationship with

the Boothes. Most, if not all, of these entities and individuals in fact set up this

elaborate investment scam for their own profit, in order to bilk the Boothes out of

millions of dollars.

       Next, the representation of Appellants and their agents/alter egos that

Alliance LLC would be the record owner of the Noble Royalties interests in which

the Boothes were investing was entirely false. Mr. Crithfield and Mr. Lake both

verified that these representations were false. (l Supp. CR 101 at 73:11-23; 152 at

59:7-15.) In fact, Alliance Inc., not Alliance LLC, was the record owner of the

Noble Royalties interests. (l Supp. CR 18 at 37:15-18.) Neither Crithfield nor

anyone else involved in this scheme ever told the Boothes that the touted Noble

Royalties interests were actually owned by Alliance Inc., nor had the Boothes ever

even heard of Alliance Inc. (l Supp. CR 18 at 37:15-18,22 at 53:23-25.) These

and numerous similar misrepresentations are now all dubiously explained by

Appellants as mysteriously reoccurring typos or "scrivener's errors." (Appellants'

Brief, passim.) Duane Crithfield evasively explained that Westminster, Hope &

Turnberry Ltd.'s web site was simply "not artfully written." (l SUpp. CR 101 at

73:22-23.) The web site has subsequently been taken down at the direction of

Keithley Lake. (l Supp. CR 153.)

       In addition to the misrepresentations regarding what entity actually owned

the Noble Royalties interests, no one told the Boothes that Duane Crithfield was

BRIEF OF APPELLEES WILLiAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                        PAGE 10
actually the President of that entity, Alliance Inc., as well as an officer or director

of Westminster, Hope & Tumberry, Ltd., First Fidelity Trust, Ltd., Citadel Life

Insurance Company, and Fidelity Insurance Company, as well as the Chairman of

the Board of the parent company, Alliance Holdings Company. (1 Supp. CR 92 at

37:12-23,40:11-24; 100 at 70:8-9; 102 at 78:17-21.)

       Nor did anyone ever tell the Boothes that Mr. Crithfield, much like Oz

behind the curtains, directs and manages all of these entities not from an office but

from his various homes in North Carolina and Tampa, Florida, presumably in his

pajamas, and occasionally travelling offshore to several alleged offices in the

Bahamas via his own private plane. (l SUpp. 85 11:16-13:11; 95 at 51:15-52:3.)

During his deposition, Mr. Crithfield could not decide whether Alliance Inc.

maintains an office anywhere. (l Supp. CR 97 at 58:3-7.) Mr. Crithfield is the sole

employee of Alliance, Inc., an "offshore" foreign entity formed under the laws of

Anguilla. (l SUpp. CR 130 at 189:12-17; 4 Exh. 107        ~   2.) Moreover, despite his

central role in the investment scheme sold to the Boothes, Mr. Crithfield holds no

professional licenses, has no special expertise in tax planning, no special expertise

in asset protection, and no special expertise in oil and gas investments. (l SUpp.

CR 95-6 at 52:14-53:11.)

       But the most appalling aspect, by far, of this investment scam is what

Appellants actually did with the Boothes' investment. Without any disclosure to

the Boothes, following Alliance LLC's receipt of millions of dollars from the

Boothes, Alliance LLC gave the Boothes' money to Alliance Inc. in the form of

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDV J. BOOTHE,
ANDW.A. BOOTHE FAMILV LTD.--47371_1                                            PAGE 11
two promissory notes. (l Exh. 26, 27, 28, 29, 30; 1 Supp. CR 18 at 37:19-23,88 at

22:1-7,89 at 26:11-27:16.) Pursuant to the terms of the notes, Alliance Inc. paid

Alliance LLC "interest" on the notes. (Id.) This "interest" is not directly related to

the face amount of the notes or to the interest received on the Noble Royalties oil

and gas interests, but is based on an unrelated oil and gas index. (Id.) No one ever

told the Boothes that Alliance LLC - the entity they believed ultimately held title

to their oil and gas investment - actually only held, as its sole asset, these two

promissory notes. (l SUpp. CR 18 at 37: 19-23.) Thus, while the Boothes were led

to believe their investment returns were derived from distributions on the

profitable Noble Royalties interests, this was in fact entirely false. The Boothes'

actual "investment" returns were derived from the mere interest being paid by

Alliance Inc. to Alliance LLC under the undisclosed notes.          Duane Crithfield

admitted that Alliance LLC has no connection with Noble Rovalties, that Alliance
                                                                "

Inc. simply keeps for itself the earnings off the Noble Royalties interests, less the

pittance that it pays to Alliance LLC as interest on the notes for subsequent

distribution to the unwitting investors:

       Q.     You say that Alliance Royalties, LLC has not invested in Noble
              Royalties directly. Explain to me how Alliance Royalties, LLC has
              any participation in Noble Royalties.
       A.     Alliance Royalties, LLC?
       Q.     Yes.
       A.     It has no connection with Noble Royalties.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                          PAGE 12
       Q.     . .. What did [the investors] get from Alliance Royalties, LLC?
       A.     Membership units.
       Q.     Okay. Do you know how much?
       A.     It would have been equal to the amount of the investment. ..
       Q.     Okay. And then the investment units, how are those related to Noble
              Royalties?
       A.     They're not related in any way.
       Q.     They're not?
       A.     To Noble Royalties.
       Q.     Okay. So what are - where is the income coming from Alliance
              Royalties? ....
       A.     Alliance Royalty, LLC invested in notes of Alliance Royalty, Inc.,
              and Alliance Royalty, Inc. purchased Noble Royalty interests.
              Alliance Royalty, Inc. makes interest payments from the earnings
              that it has off of the Alliance royalties - or excuse me - the Noble
              royalties. It collects royalty payments, and it pays those interest
              payments that are called for under the note to Alliance Royalty,
              LLC.
(l Supp. 88 at 22:1-7,89 at 26:11-27:16.) Thus, through the undisclosed notes and

the undisclosed existence of Alliance Inc. itself, Alliance Inc. was able to keep for

itself enormous sums earned from the Boothes' investments without the Boothes

ever knowing. The Boothes still do not know the full amount of proceeds Alliance

Inc. has kept for its own benefit rather remitting those proceeds to the actual

investors. (1 Supp. 31 at 92:13-19.) With regard to just the Noble Royalties

interests alone, Compass's President Daniel Monticelli testified that, as of March

31, 2009, Compass had remitted over $8 million to Alliance from the Noble


BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE   13
Royalties interests. (1 Supp. CR 183-184 at 20:14-21:5; 1 Exh. 3.) Alliance Inc.'s

monthly distribution check from Compass for the Noble Royalties interests, for

just the month of September 2008 alone, was $299.019.59. (1 Exh. 2; 1 Supp. CR

183 at 19:6-14.)

       But this money, and the millions of other dollars in distributions

fraudulently earned over the course of at least four years by Alliance Inc. without

the knowledge of the Boothes or the other investors, is gone. Duane Crithfield

testified that Alliance Inc,'s net worth is only $150,000. (1 Supp. CR 98 at 64:10-

12.) Alliance Inc. is essentially insolvent. And Alliance LLC has no assets other

than the worthless notes from Alliance Inc.

D.     Despite guarantees of financial stability and adequate funding,
       Appellants and their agents suddenly informed the Boothes that their
       investments had evaporated.

       At some point in 2007, one or more of the various Alliance entities came

under investigation by the Internal Revenue Service. (1 Supp. CR 15 at 27 :6-9; 96

at 55:2-19.) During the same period and apparently to ease the Boothe's concerns

that the Alliance entities were in financial distress related to the IRS investigation,

on May 1, 2007, Duane Crithfield, on behalf of Alliance Holding Company, sent

correspondence to the Boothes via their attorney assuring the Boothes that their

funds were guaranteed and that the various Alliance entities were fully able to

satisfy their obligations to the Boothes. (l Supp. CR 15 at 25 :22-18.) Crithfield's

letter states "1 am confirming that Alliance Holding, its subsidiary, WHD,

maintains sufficient assets to satisfy its interest in redemption obligations on its

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 14
Fixed 8 account. These obligations are guaranteed by its parent company,

Alliance, and Alliance has no debt and has the ability to satisfy its obligations and

those of its subsidiaries." (l Supp. CR 15 at 26:12-18; 4 Exh. Ill.) Dr. Boothe

testified he felt reassured by this correspondence "that they don't have any

financial problems and that they have adequate funds to cover the Fixed 8" and

continued trusting his advisors. (l Supp. CR 15 at 26:23-27:1,27:13-18.)

       Subsequently, in December of 2007, and despite these guarantees (and the

initial representations that their investments were in "guaranteed," no-risk funds),

the Boothes were informed by Appellants that the Boothes' CDO fund "essentially

lost all of its value." (l SUpp. CR 15 at 27:21-28:14.) During a meeting in Dallas

in June 0[2008, the Boothes were further told that the Fixed 8 Fund had also "lost

all of its value" except for approximately 30% of the fund that had been invested

in the Noble Royalties oil and gas interests. (l Supp. CR 15-16 at 28:19-30:2.)

This remaining 30% invested in the Noble Royalties oil and gas interests

represented about $1.2 million dollars of the Boothes' investment money. (l SUpp.

CR 16 at 30:8-17.)

       Shocked and angry that his "guaranteed" investment was not in fact

guaranteed and that Appellants refused to honor their written guarantee, Dr.

Boothe sought to discontinue his relationship with Alliance. (l SUpp. CR 16 at

29:14-16, 30:20-23.)    To salvage the remaining fraction of his $7.6 million

investment, Dr. Boothe immediately asked for the Noble Royalties oil and gas

interests to be transferred directly to him via his family partnership, Appellee

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE   15
W.A. Boothe Family, Ltd., as Appellants had represented he could do at any time.

(l Supp. CR 16 at 31:2-11.)

       Appellants immediately discouraged Dr. Boothe from transferring the oil

and gas interests directly to his family partnership, representing that those interests

were only earning a 2% return: "they said, I don't know why you would want

them, they're only paying 2 percent." (l Supp. CR 16 at 31:14-20.) This

representation was false. In fact, Alliance Inc. 's Portfolio Summary from Compass

detailed that the Noble Royalties interests were earning a year-to-date annualized

return on investment of 10.87%. (l Exh. 2.) Appellants never provided this

Portfolio Summary to the Boothes and failed to disclose that the Noble Royalty

interests were in fact yielding 10.87%. (l Supp. CR 16-17 at 32:1-33:10.) "In fact,

Duane Crithfield, out of his own mouth, said that they were only making 2

percent."(l Supp. CR 17 at 33:10-11.)

       Nonetheless, Dr. Boothe insisted that 2% was better than nothing and

pressed Crithfield to institute the transfer. (1 Supp. CR at 33:19-24.) Crithfield

finally relented and, on behalf of Appellants and their agents/alter egos, agreed to

an unconditional transfer of the Noble Royalty interests directly to W.A. Boothe

Family, Ltd. (1 Supp. CR 17 at 33:24-34:13; 118 at 141:17-142:17.) Crithfield

then directed the Boothes' trustee, Keithley Lake, as Managing Director of First

Fidelity Trust, Ltd., to transfer ownership of the Noble Royalties interests to W.A.

Boothe Family, Ltd., via two agreements entitled Partial Release. (2 Exh. 44, 45.)

The Fixed 8 Funds containing the Noble Royalties interests are identified in each

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 16
Partial Release as the "Liquidation Fund." (2 Exh. 44, 45; 1 Supp. CR 117-18 at

140:22-141: 1.)

         As seen m the next section, the representations made by Appellants'

agents/alter egos in the Partial Releases defeat their arguments on appeal. The

Partial Releases are attached as Tab 1 in the appendix hereto.

E.       The Partial Releases executed by Appellants' agents/alter egos admit
         that the Boothes, via their trusts, own an interest in the Noble Royalties
         interests and that Appellants' agents/alter egos promised to convey
         legal title to the Noble Royalties interests directly to Appellee W.A.
         Boothe Family, Ltd.

         Each fully executed Partial Release unequivocally admits, through the

following express representations, that the Boothes' family trusts own an interest

in the Noble Royalties investments and that AppeUants' agents/alter egos agreed

to convey full legal title in the Noble Royalties investments to Appellee W.A.

Boothe Family, Ltd.:

     ®   "[T]he [W.J.B. Family / W.A.B. Family] Trust owns, as an asset, an interest

         in the Liquidation Fund;"

     @   "[T]he Liquidation Fund owns an interest in Alliance Royalties, LLC;"

     ®   "Alliance Royalties, LLC received ownership of royalty interests in various

         properties acquired from Noble Royalties, Inc., more specifically described

         herein and referred to as the "Alliance Royalty Properties" when Alliance

         Royalty Inc. settled a percentage of certain debt instruments held by

         Alliance Royalties LLC;"



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                        PAGE 17
   ~   [Wendy J. Boothe and William A. Boothe have] requested that Trustee

       authorize a distribution of the Trust's pro-rata interest in Alliance Royalty

       Properties ... the "Carved Out Interest. .. "

   ~   "[T]he Trustee has considered the Grantor's request and in its sole

       discretion, has chosen to transfer the Carved Out Interest to W.A. Boothe

       Family, Ltd.;"

   •   "[T]he Liquidation Fund wishes to follow the Trustee's instructions to

       distribute the Carved Out Interest to \V.A. Boothe Family, Ltd.,            In


       redemption and satisfaction of the [W.J.B. Family / W.A.B. Family]

       Trust's interest in the Liquidation Fund;" and

   •   "The Trustee and the Liquidation Fund agree to take such further acts as

       may be necessary to convey legal title to W.A. Boothe Family, Ltd., with

       respect to the assets being conveyed hereunder."

(2 Exh. 44 at p. 1,3; 2 Exh. 45 at p. 1,3; 1 Supp. CR 17 at 34:6-36:22.) (Emphasis

added.) These representations constitute an express admission that: (1) the

Boothes, via their trusts, own an interest in the Noble Royalties interests; and (2)

Appellants and their agents/alter egos promised to convey legal title to the Noble

Royalties interests directly to Appellee W.A. Boothe Family, Ltd.            Duane

Crithfield admitted that "the underlying royalty interests owned by Alliance

Royalties, Inc. are to be at some point in the future transferred over to Dr.

Boothe's - or Dr. Boothes's wife or his trusts." (l Supp. CR 118 at 144: 16-2l.)



BRIEF OF APPELLEES WiLLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371 1                                        PAGE 18
       Crithfield also admitted that the section of the Partial Releases reproduced

in the second bullet point above was false because Alliance LLC did not in fact

own royalty interests in Noble Royalties. (l Supp. CR 121 at 155:2-156:11.) Once

again, Crithfield dismisses this false representation as simply "not artfully

written." (l Supp. CR 121 at 156:22.)

       Unfortunately for the Boothes, these agreements were nothing but a delay

tactic employed by Appellants. Appellants breached the agreements by failing to

timely institute an arbitration against Noble Royalties, Inc. (involving a dispute

not directly related to this case). (2 Exh. 44 and 45 at p. 3, § 7(a); 1 Supp. 18-19 at

40:16-41:23.) More significantly, Appellants to this day have failed to transfer the

Noble Royalties interests to W.A. Boothe Family, Ltd. as promised and, by this

appeal, absurdly claim that the Boothes have no right to the Noble Royalty

interests.

F.     Following commencement of this litigation by Compass, Appellants
       sought to thwart the interpleader process by discontinuing Compass's
       Management Agreements.

       Following Compass's initiation of this interpleader action on April 10,

2009, Alliance Inc. sent correspondence to Compass purporting to terminate its

Management Agreements effective June 29, 2009. (2 CR 410.) A copy of the

termination letter is attached as Tab 2 in the appendix hereto. Compass was not

provided with a reason why Alliance Inc. sought to terminate the Management

Agreements. (Id.; 1 Supp. 194 at 63:7-13.)




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE   19
       Terminating Compass as the manager of the Noble Royalties interests

would effectively render this interpleader action moot, as Compass would no

longer be the receiver and distributor of proceeds from the Noble Royalties

interests and would have nothing to deposit into the registry of the court.

Appellants would be able to direct Noble Royalties to distribute the disputed funds

directly to themselves or another third party under their control and would

therefore simply skirt the entire interpleader process - an equitable proceeding

designed to safeguard against exactly this result. Thus, enjoining Appellants'

attempt to upset the status quo by terminating the Management Agreements was

the object of Appellee's request for injunctive relief. (l CR 234.)

       As Appellants have already absconded with millions of dollars of

Appellees' money via offshore entities over which Appellants claim the trial court

has no jurisdiction, Appellees have ample reason to believe Appellants will

continue to abscond with the proceeds from the Noble Royalties interests that are

rightfully theirs. The trial court agreed, stating in its Order Granting Temporary

Injunction: "absent the granting of this injunction, Alliance will abscond with the

funds and secret them away." (3 CR 803.)

      Appellants have purportedly sought to hire a different manager for the

interests, B&L Royalty Management, LLC. ("B&L") (l Supp. CR 51 at 7:9-8:5.)

B&L is a two-man operation that has been in business less than one year (1 Supp.

CR 52 at 10:5-10.) B&L has five total employees: Charles Brown, who claims to

have 25 years of experience in managing royalty interests but has no official role

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                       PAGE 20
at B&L; his wife; his secretary; an accountant; and a completely inexperienced

twenty-four year old family friend named Josh Leffler who just graduated from

college in 2009 and has no actual experience managing royalty interests. (1 Supp.

CR 52 at 10:25-11:2, 12:14-15; 53 at 13:13-14:13; 59 at 38:2-10; 67 at 69:10-15.)

Josh Leffler, the twenty-four year old college graduate, is B&L's manager. (1

Supp. CR 67 at 69:4-9.) B&L currently has less than 75 clients, distributes less

than ten revenue checks per month, and manages a total of less than $20,000 in

monthly royalty interests. (l Supp. CR 53 at 16:7-14; 54 at 19:16-24; 63 at 56:17-

22.)

       Compass, in contrast, is an established oil and gas royalty management firm

that manages over $900 million in royalty interests. (l Supp. 193 at 60:2-4.)

Compass employs approximately 33 people including oil and gas professionals,

title analysts; land men, certified public accountants, revenue analysts, and

division order analysts. (l SUpp. CR 185 at 28:14-18.) Compass's President,

Daniel Monticelli, testified that managing the disputed funds "is a very

complicated process." (l SUpp. CR 185 at 28:13-14.) Monticelli further testified

that transitioning management of the funds would be enormously complex. (1

Supp. CR 186 at 30:4-32:20.) Compass's General Counsel stated transitioning

management of the funds "is a very arduous process" that would entail "nonstop

weeks" just to prepare the appropriate documents for recording. (1 SUpp. 210-211

at 14:8-17:19; 213 at 26:2-6.) Monticelli stated: "I think it has a serious risk of



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                       PAGE 21
impacting multiple investors, not just Alliance investors, but mUltiple investors

across multiple funds ifit's not transitioned properly." (1 Supp. CR 190 at 46:6-9.)

       Moreover, Compass has asserted that it would continue its management

duties to Alliance Inc. at whatever reasonable lower rate is offered to Alliance Inc.

by B&L. (1 Supp. 194-195 at 64:17-65:2.)

       Based upon these stark differences m the level of expertise and

management capacity between Compass and B&L, as well as the complexities and

risks inherent in transferring management, Appellees have ample reason to believe

their investment proceeds from the Noble Royalties interests would become lost,

commingled or simply sent offshore by B&L at the behest of Alliance Inc. The

trial court agreed, stating that "unless Alliance is immediately enjoined from

terminating [the Management Agreements], funds belonging to the Interpleader

Defendants will be sent offshore, become lost, and/or otherwise become

inaccessible to the Interpleader Defendants in the future." (3 CR 803.)

       Appellants have nonetheless pursued the instant appeal in a continued effOli

to thwart this interpleader action and gain control of the disputed royalty interests.

In the interests of justice and pursuant to the authorities set forth below, this Court

should not allow Appellants to accomplish their nefarious litigation goals.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 22
                            SUMMARY OF ARGUMENT

          The Boothes met each of the elements required to show their entitlement to

injunctive relief. The Boothes have pled numerous causes of action against

Appellants related to their fraudulent investment scam and broken promises. The

Boothes showed they have a probable right to relief on these claims based on

Appellants's proven pattern of fraudulent conduct, material omissions, and false

claims of "guaranteed" funds. The Boothes also established irreparable injury and

lack of an adequate remedy at law based upon the serious risk that Appellants will

abscond with the funds as they have done in the past, or the serious risk that

transitioning the royalty interests to an upstart two-man managing firm (or the

transition process itself) will result in loss of the funds. Appellants are also

insolvent, an independent basis for finding the Boothes have no adequate remedy

at law.

          Appellants' arguments that the Boothes do not have standing to pursue their

claims or obtain injunctive relief is disingenuous and groundless. Appellants have

admitted the Boothes have an interest in the disputed funds. Additionally,

Appellants are estopped from denying the Boothes have standing due to their own

unclean hands and the equitable third-party beneficiary doctrine.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371 I                                         PAGE 23
                                   ARGUMENT

A.     Standard of review.

       This Court reviews a trial court's grant or denial of a temporary injunction

under the abuse of discretion standard. See Butnaru v. Ford Motor Co., 84 S.W.3d

198,211 (Tex. 2002); Bk. of Texas v. Gaubert, 286 S.W.3d 546,552 (Tex. App.-

Dallas 2009, pet. filed). Under an abuse of discretion standard, the court of appeals

cannot substitute its judgment for the trial court's judgment even if it would have

reached a contrary conclusion. See id. The court of appeals determines only

whether the trial court's decision was so arbitrary as to exceed the bounds of

reasonable discretion. See id. The trial court does not abuse its discretion so long

as some evidence reasonably supports the trial court's decision. See Butnaru, 84

S.W.3d at 198.

       Further, m revIewmg the record, the court of appeals must draw all

legitimate inferences from the evidence in the light most favorable to the trial

court's order. See Bk. of Texas, 286 S.W.3d at 552. Thus, in this case, the record

evidence must be viewed in the light most favorable to Appellees and all

conflicting evidence must be ignored.

B.     A temporary injunction is an equitable remedy whose purpose is to
       preserve the status guo.

       A temporary injunction is an extraordinary remedy the purpose of which is

to preserve the status quo of the litigation's subject matter pending a trial on the

merits. See Butnaru, 84 S.W.3d at 204.        Upon an application for temporary



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE 24
injunction, "the only question before the trial court is whether the applicant is

entitled to preservation of the status quo pending trial on the merits." Walling v.

Matcalfe, 863 S.W.2d 56, 57-58 (Tex. 1993) (citing Iranian Muslim Org. v. City of

San Antonio, 615 S.W.2d 202, 208 (Tex. 1981).

       In order to obtain a temporary injunction, the applicant must plead and

prove three elements: (1) a cause of action against the defendant; (2) a probable

right to the relief sought; and (3) a probable, imminent, and irreparable injury in

the interim. See Butnaru, 84 S.W.3d at 204.

       As discussed herein, Appellees met each of the elements and were entitled

to preservation of the status quo - that is, the continuation of Compass'

Management Agreements with Appellants such that Compass can continue

depositing the Noble Royalties revenues into the court's registry pending a trial on

the merits.

ISSUE 1:     The trial court properly granted the temporary injunction prohibiting
Appellants' attempt to terminate the Management Agreements because the
Boothes established each element necessary for injunctive relief.

A.     Element #1: The Boothes have pled numerous causes of action against
       Appellants.

       Along with their request for injunctive relief, the Boothes pled numerous

causes of action against Appellants including fraud, negligent misrepresentation,

DTP A violations, securities fraud, breach of contract, and declaratory judgment,

all related to the investment scam perpetrated by Alliance LLC and Alliance Inc.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                        PAGE 25
(1 CR 234-257.) The Boothes therefore met the first element for showing their

entitlement to the temporary injunction.

       Appellants' argue that the Boothes were not entitled to a temporary

injunction because their pleadings did not request permanent injunctive relief and

because the subject matter of the injunction - the Management Agreements - is

not directly related to the claims the Boothes have pled. This argument is

incorrect. The Texas Supreme Court has held that the applicant need not plead a

cause of action entitling him to the final relief he seeks by injunction; rather, "[i]t

is enough that [the applicant] pled a cause of action for damages resulting from

breach of contract." Walling v. Metcalfe, 863 S.W.2d 56, 58 (Tex. 1993). Walling

expressly rejected and reversed the court of appeal's ruling that the applicant's

cause of action for money damages was not sufficiently "related" to the temporary

equitable relief to support a temporary injunction. See id.

B.     Element #2: The Boothes established a probable right to the relief
       sought

       A probable right of recovery may be proven by alleging the existence of a

right and presenting evidence tending to show that the right is being denied. See

Bureaucracy Online, Inc., v. Schiller, 145 S.W.3d 826, (Tex. App.-Dallas 2004,

pet. ref' d). In establishing a probable right to the relief sought, the applicant "is

not required to establish that she will prevail on final trial; the only question before

the trial court is whether the applicant is entitled to preservation of the status quo

pending trial on the merits." Walling, 863 S.W.2d at 58. See also Surko Enters.,


BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371 1                                            PAGE 26
Inc. v. Borg-Warner Acceptance Corp., 782 S.W.2d 223, 224 (Tex. App.-

Houston [1 st Dist.] 1989, no writ). "A probable right of recovery is shown by

alleging a cause of action and presenting evidence tending to sustain it." lAC, Ltd.,

v. Bell Helicopter Textron. Inc., 160 S.W.3d 191, (Tex. App.-Fort Worth [2 nd

Dist.] 2005, pet. ref d). Accord Irving Bk. & Trust Co., v. Second Land Corp., 544

S.W.2d 684, 687 (Tex. App.-Dallas 1976, writ refd n.r.e.).

       As demonstrated in the fact section of this brief, the Boothes have

established a probable right to the relief sought by their claims. It is glaringly

obvious that Appellants have perpetrated a fraud upon the Boothes in the fonn of

the investment scan they devised and sold to the Boothes. Appellants made

numerous materially false representations and omissions to the Boothes and

breached the Partial Releases in which they and their agents/alter egos agreed to

timely initiate arbitration against Noble Royalties and to transfer the Noble

Royalties interests to W.A. Boothe Family, Ltd.

       The Boothes are confident they will prevail on a final trial on the merits of

their claims for fraud, negligent misrepresentation, DTP A violations, securities

fraud, breach of contract, and declaratory judgment related to Appellants'

investment scam. At the very least, at this early stage of the proceedings, the

Boothes presented evidence "tending to sustain" their causes of action and

established a probable right to the relief sought by these claims.

       The trial court agreed, finding in its Order Granting Temporary Injunction:

·'[t]he Interpleader Defendants have demonstrated a probable right to relief. .. " (3

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE 27
CR 803.) The trial court is not required to explain its reasons for finding that the

applicant has shown a probable right to final relief. See State v. Cook United, Inc.,

464 S.W.2d 105, 106 (Tex. 1971); lAC Ltd., 160 S.W.3d at 201.

C.     Element #3: The Boothes established a probable, imminent, and
       irreparable injury in the interim.

       As discussed at length in the fact section above, Appellants have already

engaged in a pattern of fraud and absconded with millions of dollars of Appellees'

money via offshore entities over which Appellants themselves claim the trial court

has no jurisdiction. Given their history of engaging in fraud and running shell

games with Appellees' investments, there is reason to believe Appellants will

continue the pattern in the future, should they gain control of the disputed funds

either directly or through the unknown, recently-created B&L firm. If Appellants

gain such control and direct the funds to be sent offshore (or anywhere except into

the court's registry), there is a strong likelihood the Boothes will never see their

money again. Appellants' own pattern of conduct is proof of this likelihood.

       The trial court agreed, stating: "absent the granting of this injunction,

Alliance will abscond with the funds and secret them away." (3 CR 803.)

       Transitioning the funds to another manager also involves a substantial risk

of harm to the Boothes. The Boothes presented evidence that the transition process

is extremely complex. The Boothes presented testimony that such a transition

would take weeks of complex documentation and would present a "serious risk" of

negatively impacting multiple investors if the transition is not handled properly.


BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371 I                                         PAGE 28
        Even if even a transition could be effected without senous risk and

confusion, the firm purported sought by Appellants to take over the management,

B&L, does not have the resources or level of expertise to handle funds of this

complexity. The Boothes presented evidence to this effect, and all evidence in this

regard must be seen in the light most favorable to Appellees.

        The trial court again agreed with the Boothes, finding that "unless Alliance

is immediately enjoined from terminating [the Management Agreements], funds

belonging to the Interpleader Defendants will be sent offshore, become lost, and/or

otherwise become inaccessible to the Interpleader Defendants in the future." (3 CR

803.)

        Appellants' arguments that all of the above constitutes mere "speculation"

is simply that: mere argument. The twenty-two page fact section herein is an

abbreviated version of Appellants' pattern of fraudulent and wrongful conduct.

These facts speak for themselves. Appellants' pattern of conduct is not only

probable, but ongoing, and presents a serious risk of imminent and irreparable

harm to the Boothes in the form of the further loss of what little money remains of

their $7.6 million dollar "guaranteed" investment.

D.      The Soothes established they have no adequate legal remedy.

        In conjunction with showing an irreparable injury, the applicant for an

injunction must typically also show that it has no adequate legal remedy. See Sun

Oil v. Whitaker, 424 S.W.2d 216, 218 (Tex. 1968); Texas Ind. Gas v. Phoenix

Metallurgical Corp., 828 S.W.2d 529, 532 (Tex. App.-Houston [1 st Dist.] 1992,

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371 I                                        PAGE 29
pet. den' d). For a legal remedy to be adequate, "it must give the applicant

complete, final, and equal relief." Texas Ind. Gas, 424 S.W.2d at 532.

       Appellants argue the Boothes have an adequate remedy at law because they

have alleged claims for, inter alia, fraud and breach of contract, and have sought

money damages therein. Appellants misstate the law. The mere pleading of a

cause of action for fraud or breach of contract does not prevent an applicant from

obtaining a temporary injunction. "Simply because the applicant for a temporary

injunction asks only for damages as ultimate relief does not guarantee that

damages are completely adequate as a remedy. Although it is unusual,

circumstances can arise in which a temporary injunction is appropriate to preserve

the status quo pending an award of damages at trial." Walling v. Metcalfe, 863

S.W.2d 56, 58 (Tex. 1993).

       This is one of those circumstances. Although the Boothes have asked for

money damages, that remedy will be thwarted and ineffectual if Appellants have

absconded with the revenues before this dispute is adjudicated at a final trial on

the merits. "The existence of a remedy at law is not ground for denial of injunctive

relief unless the legal remedy is as practical and efficient to the ends of justice as

the equitable remedy." Irving Bk. & Trust, 544 S.W.2d at 688. Stated differently,

the Boothes' legal remedy of money damages is inadequate because if Appellants

continue in the pattern of conduct and abscond with the funds, there will be no

money left to recover from Appellants.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                          PAGE 30
       Moreover, a plaintiff does not have an adequate remedy at law if the

defendant is insolvent. See Texas Ind. Gas, 424 S.W.2d at 533; Surko Enters., Inc.

782 S.W.2d at 225. The Boothes presented evidence that, despite receiving

millions of dollars in revenues from the investments of the Boothes and other

investors, Alliance Inc. claims it has a net worth of only $150,000. The

significance of this is twofold: first, Alliance Inc. has insufficient net worth to pay

adequate money damages should the Boothes prevail at trial; and second, Alliance

Inc. has laundered or otherwise siphoned off the millions it has already made from

this investment scam. Alliance LLC has no assets other than the worthless notes

from Alliance Inc. Thus, under Texas precedent, the Boothes do not have an

adequate remedy at law for the independent reason that both Appellants are

essentially involvent.

       Appellants are correct that the trial court must provide a reason supporting

its finding of irreparable injury. However, this explanation need not be elaborate

and may be as short as one sentence. See lAC, Ltd., 160 S.W.3d at 201 (finding

that court's explicit one-sentence explanation of irreparable hann was sufficient to

support injunction); Khaledi v. H.K. Global Trading, Ltd., 126 S.W.3d 273, (Tex.

App.-San Antonio 2003, pet. den'd) (court adequately stated reasons by reciting

that plaintiffs would be prevented from realizing significant loan values and that

their ability to obtain financing would be adversely affected).

       Here, the trial court expressly set forth the reasons for finding the

applicants would suffer irreparable harm were an injunction not issued:

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 31
"immediate and irreparable harm will come to the Interpleader Defendants in the

form of a loss of revenues attributable to their royalty interests .... unless Alliance

is immediately enjoined ... funds belonging to the Interpleader Defendants will be

sent offshore, become lost, and/or otherwise become inaccessible to the

Interpleader Defendants . . . . Interpleader Defendants will suffer immediate

irreparable injuries for which there is no adequate remedy at law ... absent the

granting of this injunction, Alliance will abscond with the funds and secret them

away." (3 CR 803.) This clear explanation is sufficient to support the trial court's

finding of irreparable injury.

       Moreover, the purpose of the rule requiring the trial court to state the basis

for its finding of irreparable harm is to inform a party just what he is enjoined

from doing and the reasons why he is so enjoined. See Transport Co. v. Robertson

Transports Inc., 261 S.W.2d 549, 552 (Tex. 1953). A detailed explanation is not

required. See id. at 553. If the enjoined party is confused and wishes further

explanation, he may request findings of fact and conclusions of law. See id.

Appellants did not do so. Where there are no findings of fact or conclusions of

law, it is implied that the trial court made all necessary findings to support its

ruling. See Union Gas Corp. v. Gisler, 129 S.W.3d 145, 158 (Tex. App.-Corpus

Christi 2003, pet. den' d).




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 32
E.     The temporary injunction maintains the status quo; it is Appellants who seek
       to disrupt the status quo.

       As discussed above, the purpose of a temporary irUunction is to maintain

the status quo pending a trial on the merits. The "status quo" is defined as "the

last, actual, peaceable noncontested status which preceded the pending

controversy." State v. Southwestern Bell Tel. Co., 526 S.W.2d 526, 528 (Tex.

1975). The last, actual, peaceable noncontested status entailed Compass managing

the Noble Royalties revenues under the Management Agreements. The Boothes

presented evidence that, prior to this interpleader action, Alliance Inc. and

Alliance LLC had never sought to terminate the Management Agreements with

Compass.

       On April 10, 2009, Compass initiated this interpleader action and began

depositing the Noble Royalties revenues into the registry of the court. Twenty

days later, on April 30, 2009, Alliance Inc. sent correspondence to Compass

purporting to terminate the Management Agreements effective June 29, 2009.

With this letter, it was Alliance Inc. that purposely set out to disrupt the staus quo.

Appellants' arguments to the contrary are as transparent as they are incorrect.

F.     Texas courts have broad powers of equity to protect interpleaded funds and
       to, enjoin enforcement of contracts if necessary.

       An interpleader is an equitable remedy which enables a party who holds a

fund that is claimed by adverse claimants to file suit interpleading the claimants,

deposit the fund into the registry of the court, and leave it to the court to determine

to which claimant it belongs. See Northshore Bk. v. Commercial Credit Corp., 668


BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 33
S.W.2d 787, 790 (Tex. App.-Houston [14th Dist.] 1984, writ refd n.r.e.); Harris

Cty. v. Sellers, 468 S.W.2d 950, (Tex. Civ. App.-Houston [1 st Dist.] 1971), rev'd

on other grounds, 483 S.W.2d 242 (Tex. 1972). "[T]he court in the exercise of its

equitable powers may make such orders it deems necessary to protect said funds."

Northshore Bk., 668 S. W.2d at 790; Harris Cty., 468 S. W.2d at 956.

       Enjoining Appellants' attempt to terminate the Management Agreements

was well within the court's equitable powers to protect the interpleaded funds in

this action. On the contrary, had the injunction not issued, Appellants would have

been able to thwart the very purpose of an interpleader action, leaving the court

with no funds to protect.

       Appellants rely on cases from other jurisdictions to contend the trial court

did not have the equitable power to enjoin Appellants' termination of the

Management Agreements. These cases are not controlling and are contrary to

Texas law. In Butnaru, the Texas Supreme Court upheld the enforcement of a

contract by injunction, indicating that this may be done where a party establishes

that damages for breach of contract are insufficient: "We agree with the court of

appeals that, generally, a court will not enforce contractual rights by injunction,

because a party can rarely establish an irreparable injury and an inadequate legal

remedy when damages for breach of contract are available." Butnaru, 84 S.W.3d

at 211 (emphasis added). Where an applicant does make such a showing of

irreparable injury and an inadequate legal remedy with regard to a request to

enforce a contract, '"the court of appeals cannot overrule the trial court's decision

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
ANDW.A. BOOTHE FAMILY LTD.--47371_1                                          PAGE 34
unless the trial court acted unreasonably or in an arbitrary manner, without

reference to guiding rules or principles." ld. The Supreme Court concluded in

Butnaru that because there was evidence to support the trial court's decision to

issue a temporary injunction enforcing the parties' contract, the trial court did not

abuse its discretion. See id. at 212.

       Butnaru - and not the off-point, extra-jurisdictional cases cited by

Appellants - controls this case. As in Butnaru, the Boothes have shown that this is

a case where money damages on a breach of contract claim are an inadequate

remedy and that irreparable damage will occur if the injunction is dissolved.

       Courts in other interpleader actions have similarly enjoined contractual

relationships during the pendancy of an interpleader in order to protect the

disputed funds. See, e.g., Savings & Profit Sharing Fund of Sears Employees v.

Stubbs, 734 S.W.2d 76, 78 (Tex. App.-Austin 1987, pet. den'd)            (injunction

enjoining distribution of account proceeds pending interpleader). See also Heggy

v. American Trading Employee Retirement Account Plan, 110 S.W.3d 692, 699

(Tex. App.-Houston [14 th Dist.] 2003, pet. den'd) (incumbent upon stakeholders

to protect interpleaded funds).

       Thus, the trial court was well within its equity powers and the scope of its

discretion in enjoining Appellants from terminating the Management Agreements

with Compass.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE 35
ISSUE 2:       As admitted by Appellants, the Boothes have an interest In the
disputed funds and therefore have standing to assert their claims and obtain
injunctive relief.

       Appellants' argument that the Boothes do not have standing to pursue their

claims or obtain injunctive relief is disingenuous and groundless. As discussed

below, Appellants have admitted that the Boothes have an interest in the disputed

funds. Appellants are also estopped from denying the Boothes have standing due

to their own unclean hands and the equitable third-party beneficiary doctrine.

A.     Appellants admitted the Boothes have an equitable interest in the funds
       and that legal title win be transferred to Appellee W.A. Boothe Family,
       Ltd.

       The Partial Releases signed by Appellants' agents/alter egos expressly

admit that the Boothes, via their trusts, own an interest in the Noble Royalties

interests and that Appellants and their agents/alter egos promised to convey legal

title to the Noble Royalties interests directly to Appellee W.A. Boothe Family,

Ltd. The Partial Releases expressly recite the chain of interest owners through

which the Boothes claim an interest in the Noble Royalties interests: the W.J.B.

Family Trust and the W.A.B. Family Trust own interests in the Liquidation Fund;

the Liquidation Fund owns an interest in Alliance LLC; and Alliance LLC

(purportedly) owns an interest in Noble Royalties royalty interests. (2 Exh. 44 at p.

1, 3; 2 Exh. 45 at p. 1, 3; 1 Supp. CR 17 at 34:6-36:22.) The Partial Releases

further refer to "the Trust's pro-rata interest in Alliance Royalty Properties" and

"the Trust's interest in the Liquidation Fund." As such, the Boothes clearly have

standing to assert claims to the Noble Royalties interests.

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE 36
       Appellants are estopped from denying that their agent/alter egos then

expressly promised to convey the interests to Appellee W.A. Boothe Family, Ltd.:

"[T]he Liquidation Fund wishes to follow the Trustee's instructions to distribute

the Carved Out Interest to W.A. Boothe Family, Ltd., in redemption and

satisfaction of the [W.J.B. Family / W.A.B. Family] Trust's interest in the

Liquidation Fund." (2 Ex. 44 at p. 1; 45 at p. 1. ) And further: "The Trustee and

the Liquidation Fund agree to take such further acts as may be necessary to convey

legal title to W.A. Boothe Family, Ltd." (2 Ex. 44 at p. 3; 45 at p. 3.)

       Duane Crithfield, President of Alliance Inc. and the Chairman of the Board

of Alliance Holding Company, which owns or controls Alliance LLC, is estopped

from denying that he, too, admitted that the Boothes have a claim to the royalty

interests and that the interests were to be transferred to either Dr. Boothe, his wife,

or his trusts. (l Supp. CR 118 at 144:16-21.)

       In light of the promises and representations in the Partial Releases and by

Mr. Crithfield, it is disingenuous for Appellants to now claim the Boothes have

neither an interest in the funds nor standing to pursue their claims to the funds.

B.     Appellants' unclean hands bar them from claiming that the "levels of
       removal" they intentionally buUt into this investment scam prevent the
       Boothes from seeking redress for Appellants' wrongs.

       Appellants' "levels of removal" argument is misguided and misleading. As

an initial matter, one of the levels of removal claimed by Appellants simply does

not exist. Namely, the insurance policies depicted as one of these levels of

removal on page 9 of Appellants brief have been terminated. (2 Exh. 53; 3 Exh.

BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                           PAGE 37
67.) Upon termination, the policies' assets were surrendered to the Boothes'

trustee, First Fidelity Trust, Ltd. of the W.A.B. Family Trust and the W.J.B.

Family Trust. Regardless, even if Appellees are still several steps "removed" from

the actual source of the revenue stream, and do not yet have legal title to the Noble

Royalties interests, this does not mean they do not have an equitable claim to title.

Appellees have an equitable interest and contract rights in the Noble Royalties

interests, regardless of how many levels of removal Appellants and their

agents/alter egos have built into this investment scheme.

       Appellants cannot claim that the very investment structure they designed

and into which they directed the Boothes to invest their money is now comprised

of "levels of removal" too remote for the Boothes to have neither legal nor

equitable interest in the revenues from their own investment. Appellants' unclean

hands in setting up this investment scan prevent them from now claiming that the

Boothes are without privity or standing to seek redress for the wrongs perpetrated

against them.

C.     The Boothes have standing as third-party beneficiaries of the Management
       Agreements.

       Finally, the Boothes have standing as third-party beneficiaries to enforce

the Management Agreements between Compass and Alliance Inc. "A third-party

beneficiary may enforce a contract to which it is not a party if the parties to the

contract intended to secure a benefit and entered into the contract directly for the

third party's benefit." In re Palm Harbor Homes, Inc., 195 S.W.3d 672,677 (Tex.



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                         PAGE   38
2006). Although Alliance Inc. and/or Alliance LLC listed themselves as the

"InterestHolder" or "Investor" on the Management Agreements, these agreements

were entered into for the investors' benefit as part of Appellants' investment

scheme.

       Again, Appellants' unclean hands and express admissions above prevent

them from denying that the Boothes were intended beneficiaries of the

Management Agreements.

      Regardless of their status as third-party beneficiaries, the Boothes have

standing to enforce the Management Agreements by injunction because they have

standing to pursue their principle claims on the merits. "In order to make a

showing of a probable right to recover on the merits, a party must show that he has

probable standing to pursue a suit on its merits. If this probable standing showing

is made, sufficient standing exists to bring the temporary injunction action."

Rogers v. Howell, 592 S.W.2d 402, (Tex. App.-Dallas 1979, ). The Boothes have

already shown they have standing to pursue their claims on the merits.

                                 CONCLUSION

       For all of the foregoing reasons, Appellees William B. Boothe, Wendy J.

Boothe, and W.A. Boothe Family, Ltd. request the Court of Appeals to affirm the

Order Granting Temporary Injunction of the trial court.




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                       PAGE 39
                                      Respectfully submitted,

                                      GRUBER HURST JOHANSEN & HAIL, LLP



                                      BY:~'~
                                         Mark L. Johan
                                         State Bar No. 10670240
                                         Vanessa J. Rush
                                         State Bar No. 24013434
                                         Jason A. Copling
                                         State Bar No. 24036400

                                      2500 Fountain Place
                                      1445 Ross Avenue
                                      Dallas, Texas 75202
                                      Telephone (214) 855-6800
                                      Facsimile (214) 866-6808

                                      COUNSEL FOR APPELLEES WILLIAM A.
                                      BOOTHE, M.D" WENDY BOOTHE, AND
                                      W,A, BOOTHE FAMILY, LTD.


                          CERTIFICATE OF SERVICE
        I hereby certify that a true and correct copy of the foregoing Response Brief

of Appellees William A. Boothe, M.D., Wendy 1. Boothe, and W.A. Boothe

Family, Ltd. was served upon the following counsel of record by certified mail,

pursuant to the Texas Rule of Appellate Procedure on the         2..l   day of December,

2009:

Stephen F. Malouf                            Kenneth W. Biermacher
David Evans                                  James B. Greer
Jonathan Nockels                             Kevin P. Perkins
THE LAW OFFICES OF STEPHEN F. MALOUF,        KANE RUSSELL COLEMAN & LOGAN PC
PC                                           1601 Elm Street, Suite 3700
3811 Turtle Creek Blvd., Suite 1600          Dallas, Texas 75201
Dallas, Texas 75219



BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
AND W.A. BOOTHE FAMILY LTD.--47371_1                                             PAGE   40
Amy B. Ganci                              Jeffrey T. Knebel
THE GANCI FIRM                            Jason S. Scott
3811 Turtle Creek, Suite 1900             OSBORNE, HELMAN, KNEBEL, & DELEERY,
Dallas, Texas 75219                       LLP
                                          301 Congress Ave., Suite 1910
                                          Austin, Texas 78701

W. Ross Forbes, Jr.                       Jeffrey S. Levinger
Jason P. Shanks                           Brett Kutnick
JACKSON WALKER L.L.P.                     HANKINSON LEV INGER LLP
901 Main Street, Suite 6000               750 N. St. Paul St., Ste. 1800
Dallas, TX 75202                          Dallas, Texas 75201


                                         v~·~




BRIEF OF APPELLEES WILLIAM A. BOOTHE, M.D., WENDY J. BOOTHE,
ANDW.A. BOOTHE FAMILY LTD.--47371_1                                        PAGE 41
                                      W.J.B.FAMILYTRUST

                                           I>lIIriW Release

This Partial Release entered into on fue    a.. .
                                              ilJ. day of LX.: IE m be.      • 2608 between First
Fidelity Trust. Ltd.. IOClited at R. G. Solomon Arcade, Suite #11, Main Street, Charlestown, Nevis,
West Indies (the "TrllStee"), the Fixed Liquidation Acwl.lnt LLC (lhe '"Liqllidatioo Fundj, and
Woody J. Boothe Dr 5204 Linoolru;hlre Coor!, Dallas, TX 7524S USA (the "Grantor").

WHEREAS, !be GnmtOf and the Trustee entered into a trust a.greemeIlt currently !mown as .!he
W..U~. FamUy Trom: (the "Trust" or the "Trnst Deed"), the 3S$ets and income of which comprise the
trnst fund;

WHEREAS, the Trustee has the authority til comluct oo::essmy business of the Trnst. and to make
discretionary distributions of Trust asselS til one or more discretiolllU)' beneficiaries of the Trust;

WHEREAS.lhe Trust OWll3, as Ill! asset, l1l'i interest in the Liqmrumon Fmml;

WHEREAS, !he Liquidation FuJld owns an interest in Alliance Royalties.. lle;

WHEREAS, Alliam:e Royalties, LLC received ownel1lmp of royalty Interests in various properties
acquired from Noble Royalties, Inc., more specifically de.scrihed herein and referred til as the
"Alliance Royalty Properties" when Alliance Royally Ioo. settled a percentage of certain debt
instruments held by Alliance Royalties LtC;

WHEREAS, Grnntof has requested that Trustee wt!Jorim a distribution of Ihe Trust's pro-rnta
interesa in Alliance Royally Propertiea, which for pmposes of this Release is equal to the product of
!be Trust's Interest in the Uquidlrtloil F!.uui Illll1liplied by the L1qwdlltlon Fund's. interest in
Alliance Royalties, Ltc (the "Percentage Interest"). Iogether with the Trust's pt(H'll.'Ia interest in aU
IlIldistributed earnings of !he Liquidatioo Fund attributable to royalty payments 011 the AJIiance
Royalty Properlies, less the Trust's pro-rnta share of !he operalioo and legal expenses of the
Liquidation Fund. (all of which collStittite tOO "Carved Out Jnterest",) to W. A. Boothe Fllmiiy, Ltd., II
Texas Limited ParinetSoip and disoretionary beneficiary oflbe Trust;

WHEREAS, the Parties reoognize that !he Percen1nge Interest may be alletW by the results of any
rettlement of the AIbitl'lltioo Procee!fmgs with Noble Royalries it fur Cltample., the settlement involves
II ;edemptiOll or repurchase of some or all of the Alliance Royally Properties;

WHEREAS, the Trustee lias considered the GrMtor'u request and in its sole diocretion, bas chosen to
InmSfer!he Carved Out Interest 10 W. A. Boothe Family, Ltd. In lll:ron!lUlce willi the terms ofthis
AgreemClit;

WHEREAS, the Liquidation Fund wishes 10 follow Ihe Tru!ltc!:'s instructions to distribute the
Carved Out Interest to W. A. Boothe Family, Ltd... ill redemption and satisfaction of the Trust's
interest in !he Liquidation Fund.

NOW THEREFORE, the parties agree as follows:



         The Trustee and the LiquidatioB! FllIM represent aoo wammt that: (a) !he Trust. together
         with the W.A.B. Family Trust, own collectively a 12.3%24% interest in the Uqllidawm
         Flslid, (b) the Uquldlll&n Fund owns an interest in Alliance Royalties, u.c III'Id such

Qmjiderrtia/                                 PagelofS
PDY1faJ Relerue                                                               First Fidelity Tmst, Limited




                                                                                                        EXHIBIT

                                                                                                I            1ft
".




             interest is currently being determined pursuant to audit (c) Alliance Royalty Inc. p1.l!Cbased
             five properties, (Alliance Royalty Properties) consisting of II 0.40896593% interest in the oil
             and gas properties acquired through the Premont Royalties, LLC purcbase transaction at a
             purchase price of approximately $3,848,400, III 0.17414556% interest in the oil and gas
             properties acquired through !he Elk Royalties, LLC purchase transaction at II purchase price
             of $5,000,000, a 0.13715224% interest in the oil and gas properties acquired through the
             Crane Royalties, LLC purchase transaction at a purchase price of $5,000,000. a 0.04465458%
             interest in \be oil and gas properties acquired through the Drake Properties purchase
             transaction at a purchase price of S5,OOO,OOO, and a 0.06118627% interest in the oil and gas
             properties acquired through the Teal Royalties, LLC purchase lransaction at II purchase price
             of$7,499.974, and (d) Alliance Royalty Inc. and Alliance Royalties, LLC know of no liens,
             encumbrances or transfers that have lslren place with respect to the Alliance Royalty
             Properties. subsequent to the date of acquisition by Alliance Royalty Inc. from Noble
             Royalties, Inc.



             Within a reasonable period of time, not to exceed 60 days after either. a) tile completion of
             the terms of any settlement with Noble Royalties, lnc., or b) the completion of the Arbitration
             Proceedings (which means that the arbitrators have rendered a final decision and that any
             motions to confirm, vacate or modify the arbitration award have been decided, a final
             judgment has been entered, and the judgment is not subject to further appeal), the Trustee will
             distribute to W. A. Boothe FlIImily, Ltd., the Percentage Interest as it exists at that time;
             together with the Trust's pro-rata interest in aU undistributed =ings oithe Liquidation Fund
             attr:lbntable. to royalty payments on the Alliance Royalty Properties, less the Trust's pro-rata
             share of the operation and legal expenses of the Liquidation Fund, (an ofwbich constitute the
              "Carved Out Interest").

             Grantor agrees that the Ilansfer of the Carved Out Interest to the W. A. Boothe Family, Ud.
             shall constitute a redemption of the Trust's interest in the Liquidation Fund. and should that
             OCCUl'. Gnntor agrees to have, at Grantor's expense, Gnlllltor's oil and gas attorneys
             prepare and record the necessary and proper lIssignmems on or before the end of a ninety (90)
             day period following the date of the transfer of the Carved Out Interest. Trustee agrees to
             execute. and agrees to cause Alliance Royalties, Ltc and the Liquidation Fund to execute
             such proper assignments, powers of attorney or conveyance documents to convey the
             Percenlsge Interest.



             (a)       Subject to the limitations set out in Paragraph 3(b) below, upon conveyance of tbe
                       Carved Out Interest to W. A. Boothe Family, Ltd., the Grantor, on behalf of
                       herself, her heirs, beneficiaries, executors, administrators, and assigns, hereby
                       releases and holds lwmless, the Trustee and the Liq1Sidation Fllnd and aU of their
                       respective members, officers, employees, executors, dependent agents, administrators
                       and llSSigns. including, but not limited to: Foster &: Dunhm, Ltd. and Westminster
                       Hope &: Tumberry, Ltd. (the "Released Parties",) and their members, officers
                       employees, executive IIgen18 or adminiatrstors from all rigbiB, claims and actions
                       which the Grantor aOOIor his above mentioned successors may have against the
                       Trustee and the LiqllmmtillJl Fund and/or their respective members, officers.
                       employees, executors, dependent agents or administrators or !he Released Parties
                       arising out of or in any way connected to the distribution of the royalty interests or
                       the Carved Out Interest herein provided, specifically including any federal or state
                       income tax consequences.
     Confidential                                Page 2 0/5
     Partial Release                                                              First Fidelity Trust, Limited
       (b)        Notwithstanding any other provisioll of this Release, Gnll~t&r'lI release and hold
                  harmless is eltpreSSly limited to eilhei the amount of the Carved Out Interest or Ihe
                  fair market VIIlue of the PCl:cenUlge Interest to be distributed hereunder, wIDch value
                  is oonclusively deemed to be the Pereentage Interest multiplied by the initial
                  purchase price of the Alliance Royalty Properties from Noble Royalties, Inc. in the
                  amount of $26,348,400. fur those of the Alliance Royalty Properties transferred AD
                  parties acknowledge that the Relesse contained in this subparagraph 3 shall be
                  effective only when the Carved Out Interest is conveyed.

        (c)       Furthe:r. by signing below, the Gnlillror aclmowledges having read and undemood
                  the terms of this Release and the consequences of signing this Release. Gnnmr
                  further ackoow\edges having bad the opportunity to have Ihe Ien'r.ls of this Release,
                  and the consequences Ihereof. explained by a self-cbosen attorney.

        (d)       The Release contained in this subpamgrapb 3 is contingent upon the distribution of
                  the Carved om Interest to W. A. Boothe Family. Ltd. Any such release is null and
                  void and of 00 effect if said distribution does Dot occur.

        Notwithstanding any other provision of this Release, the Graraior does not release any claims
        perlaining to those assets lIlot being distributed to W. A. Booilie Famny, Ltd., hereunder.

4.      Attorneys' Fees

        Subject to Paragraph 8, each party hereto shall bem' all attorneys' fees and costs arising from
        the action of ills own couns.el in connection with this matter, the tmns of this Release, the
        matteJs and documents referenced herein, and all related matters.

5.     ·~LawudFonm


        This Release shan be governed by and construed in accordance with. the laws of Nevis, West
        Indies. Any dispute that may arise hereunder shall be brought only in a coort of competent
        jurisdiction in Nevis, West Indies, as a CODVement forum for the parties hereto.

6.      M~

        (a)       This Release may be executed in two or more ~ Any single counlegpart or a
                  set of ~ signed in either case by an the parties hereto shall constitute 1I full
                  and original VersKm of this Release for all~. An electronic or fil<:simile copy
                  shall be deemed to be a signed original

        (b)       The Trustee and Ihe UqWdlidoo Fund agree to take such further acts as may be
                  necessary to convey legal title to W. A. Boothe Famiiy. Ltd., with respect to the assets
                  being conveyed hereunder.

7.      Dilmuh! with Noble Roytitla,lnc.

        (a)       The parties aclmowledge that Alliance Royalty mc. bas potential claims against
                  Noble Royalties. Inc. in connection with its acquisition of the Alliance Royalty
                  properties from Noble Royalties, Inc., which are to be resolved by arlJitmtion. In that
                  regard, the Trustee and the Liquidation Fund warrant and represent thal an aromatiOD
                  proceeding will be filed by Alliance Royalty Inc. within 90 days; and that the claims
                  filed will be pursued in accordance with the procedures set forth in the agreements
Confidential                                 PageJof5
Partial Release                                                               First Fidelity Tnlst, Limited
                  between Alliance Royalty Inc. and Noble Royalties, Inc. in COxmectiOIl willi the
                  acquisition of the Alliance Royalties Properties. The pmties acknowledge that
                  Alliance Royalty IDe. may receive through settlement, arbitration or otherwise, a
                  recovery or monetary payment. Grantor aclrnowledges and agrees that he shall have
                  no right to contact or direct counsel for the Trustee, Alliance Royalty Inc. or the
                  Liquidation Fund, and that the those entities have the exclusive right to manage any
                  arbitration or litigation proceedings, and may resolve or setI1e the claims on such
                  terms as they believe appropriate in the exercise of their discretion.

        (b)       Grantor agrees not to cooperate with, communicate with or assist Noble Royalties,
                  Inc. or any other personS who are not parties to this Release, except to !he extent
                  required by law or as directed by the Arbitrators. Grantor agrees that any infor:matioD
                  not generally knowD to the public, will not, without the prior permission of the other
                  parties to this Release, be disclosed to any persons other than the parties to this
                  Release.. If Grantor is compelled by any legsl process to disclose any information
                  related to !his matter, Grantor agrees that he shall provide the other parties to this
                  Release with prompt written notice of such legal process so as to enable the other
                  parties to obtain an appropriate protective order. If II protective order or other remedy
                  is not obtained, Grantor shall furnish OIlly that information whlcb Grantor is advised
                  by written opinion of counsel must be disclosed.

        (c)       Additionally, the parties agree to cooperate with each other in order to maximize any
                  recovery, and acknowledge that should Alliance Royalty Inc. receive a recovery or
                  settlement from Noble Royalties, Inc. prior to the Trustee's distribution of the Carved
                  Out Interest to W. A. Boothe Family, Ltd., such distribution shalllllso include the
                  Trust's pro rata interest in the recovery or settlement received less a pro-rata share of
                  the routine fund expenses and applicable litigation expenses.                    .



        If available under the laws of Nevis, West Indies, the provisions of this Agreement shall be
        enforceable by deaee of specific performance without necessity of posting bond. If any
        Party breaches such Party's obligations under this Agreement, then. in addition to any actual
        drunages or other relief available to the prevailing Party in a suit to enforce this Agreement,
        !he prevailing Party shall be entitled to recover reasonable attorneys' fees and related
        expenses (including fees of expert witnesses) from the breacbing Party. notwithstanding any
        indemnity or release otherwise provided for in this Agreement.

9.      Elte4:utWn and Atceptarn:e

        Hereby signed, aclaJowledged and consented hereto Oil this      3o~daY of'V~                      ,
        2008, by:




Witness •

Confidential                                 Page 40/5
Partial Release                                                                Fmt Fukliiy Trost. Limited
Liquidation Account LLC




Trustee:

The Company seal was hereto
Affixed b its anaging Director
Keitble    . . Lake                         CIS




WilD




Confidential                     Page5of5
Partial Release                                   First Fidelity Tn/st, Limited
                                      W.A.B. FAMILY TRUST


                                                                               21:0<;
This Partial Release entered into 01'1 the 3..-d day of Ja,,!..!arq         , 200B between First
Fidclity Trust. Ltd •• located at R G. Solomon Arcade, Suite #11, Main Street, Charlestown. Nevis,
West Indks (the "1'mstee,,). the FIXed Liqaidatroo AClI»WIt LLC (the "Liquidalion Fund"}, and
William A. Boothe of5204 Lincolnshire Court, DaUas, TX 75248 USA (the "Grantor").

WHEREAS. the Grantor and the Trustee entered into a '!rust agreement currently knovm as the
W.A.B. Family TrlIst (the "Tnm" or the "Trust Deed',}. the I'ISSeB and income ofwbich comprise the
tnlSffund;

WHEREAS, the Trustee has the anthority to conduct necessary business of the T!1Illt, and to make
discretionary distributions of Trust assets to one Of more discretioilllry beneficiaries oftlle Tru~

WHEREAS, the Trost owns, as an asset, an interest in the Uifilidatiol'l FllJ"ld;

WHEREAS, the Liquidation Fund owns an interest in Alliance Royalties, Ltc;

WHEREAS, Alliance Royalties, LLC received ownenmip of royalty interests in various properties
acquired from Noble RoyaiDes, InC., more specifically described herein and referred to as the
"Alliance Royalty Properties" when AUlaooe Royalty Inc. settJed II percentage of certain debt
iristruments beld by Alliance Royalties LLC;

WUEREAS, Grantor has :requested thai Tmstre authorize Ii distribution of the Trust's pro-rata
interest in Alliance Royalty Properties, which for purposes of iliis Release is equal to the product of
the Trost's interest in the Llqwdatirul Fund multiplied by the Liquidatioliil FUlld's interest in
.Alliance Royalties, lle (the "Percootage Interest"), together with the Trost's pro-mtll interest in all
undiSlributed earnings of !he Uqui&uoo Fund II!lribulllble to royalty payments 00 the Alliance
Royalty Properties, lees the Trust's pro-rala share of the operation and legal expenses of the
Uqmdation Fund, (all of which constitute the "Carved Out Intenlstj to W. A. Bootbe Family, Ltd., a
Texas Limited Partnership and discretiooary bendicimy of the Trust;

WHEREAS, the Parties recognize that the Percentage Inte:rest may be altered by the results of any
sattlemeul of the Arbitration J>roceedlngs with Noble Royalties if, for example, the settlement involves
s redemption or repurchase of some or all of the Alliance Roylllly Properties;

WHEREAS, the Trustee bas considered Ihe Grantor's request and in its sole discretion. has chosen to
                                                                 m
transfer the Carved Out Interest to W. A. Boothe Family. Ltd. IIccordance with the terms of thli
Agreement;

WHEREAS, the Liquidation FIIDd wishes to follow the Trustee's instructions to distribute the
Carved Out Intm:est to W. A. Boothe Farnilly. Ltd., in redemption and satisfactkm of !he Trust's
interest in the LIquidation Fund

NOW THEREFORE, the pmties agree liS follows:



         The Trustee l!lld the Lkttdda1ion Fund represent and WlllTiml that. (8) the Trust, together
         with the WJ.B. FlmJily Trust, own collectively Ii 12.39624% interest in the Liquidation
         FIlIOO, (b) the Llquldlltlolll Fund owns all interest in Alliance Royalties, tLC and such

Q;llfidimtial                                Page 1 of5
Parfi4ll Release                                                              First FtdeIity 1'rust. Limited




                                                                                                        EXHIBIT

                                                                                                               45
        interest is currently being determined pursuant to audit (c) Alliance Royalty Jnc. purchllSoo
        five properties, (Alliance Royalty Properties) consisting of a 0.40896593% interest in the oil
        and gas properties acquired through the Premont Royalties. LLC purcbase lransaction at a
        purchase price of approximately $3,848,400, a 0.174]4556% interest in the oil and gas
        properties acquired through the Elk Royalties. LLC purcnllSe transaction at a purchllSe price
        of $5,000,000, a 0.13715224% interest in the oil and gllS properties acquired through tile
        Crane Royalties, Ltc purcbase transaction at a purchase price oU5,OOO,OOO, a 0.04465458%
        interest in the oil and gas properties acquired through the Drake Properties purchase
        tmnsacuon at a purchase price of $5,000,000, and a 0.06118627% interest in !he oil and gas
        properties acquired through the Teal Royalties, LLC purchase transaction at Ii purchase price
        of$7.499,974, and (d) Alliance Royalty Inc. and Alliance Royalties, Ltc lmow of no liens,
        encumbrances or transfers that have taken pJace with respect to the Allianoo Royalty
        Properties. subsequent to the date of acquisition by Alliance Royalty me. from Noble
        Royalties, mc.

2.      Transfer of the AS$ets.

        Within a reasonable period of time, not to exceed 60 days after either: a) the completion of
        the tenns of any settlement with Noble Royalties, Inc•• or b) the completion of the Awitration
        Proceedings (which means that the arbitrators have rendered a final decision and that any
        motions to confirm, vacate or modify the arbitration award have been decided, II final
        judgment has been entered, and Ihe judgment is not subject to further appeal), the Trustee will
        distribute to W. A. Bootbe Family, Ltd.. Ihe Percentage Interest as it exists at that time;
        together wilh the Trust's pro-rata interest in aU undistributed earnings oflhe Liquidation Fund
        attributable to royalty payments on the Alliance Royalty Properties, less the Trust's pro-rata
        share of the operation and legal expenses of the Liquidation Fund, (all of wbicb constitute the
        "Carved Out Interest").

        Grantor agrees that the transfer of tile Carved Out Interest to Ihe W. A. Boothe Family, Ltd.
        shall constitute a redemption of the Trust's interest ill the Liquidation Ftmd. snd should ilia!
        occur, Gnoror agrees to have. at Gnntor'$ expense, Grllll'dor's oil and gas attorneys
        prepare and record the necessary and proper assignments on or before the end of II ninety (90)
        day period following tile date of the transfer of the Carved Out Interest Trustee agrees to
        execute, and agrees to cause Alliance Royalties, LLC and Ihe Liquidation Fund to execute
        such proper assignments. powers of attorney or conveyance documents to convey the
        Percentage Interest.



        (a)       Subject to fhe limitations set oul in Paragraph 3(b) below, upon cooveyance of the
                  Carved Out Interest to W. A. Boothe Family, Ltd., the Grantor, on behalf of
                  himself, his heirs, beneficiaries, executors, administrators, and assigns. hereby
                  releases and holds harmless, the Trustee and tile Uquldatioli Filii'll] and all of their
                  respective members, officers, employees, executors, dependent agents, administrators
                  and assigns. including, but not linrited to: Foster & Dunbill, Ltd. and Westminster
                  Hope & Tl.lmberry, Ltd. (lhe "Released Parties") and ilieir members, officers
                  employees, executive agents or administrators from all rights, claims and actions
                  which the Grantor andlor his above mentioned successors may have against the
                  Trustee and the LlquidatieD Fu..d andlor their respective members, officers,
                  employees, executors, dependent agents or administrators or the Released Parties
                  arising out of or in any way connected to the distribution of the royalty interests or
                  the Carved Out lnterest herein provided. specifically including any federal or state
                  income tax consequences.
Confidential                                 page2of5
Partial Release                                                               First Fidelity Trust, Limited
        (1))      Notwithstanding any other provision of this Release. Gnmwr's release and hold
                  harmless is expressly limited to either the amount of the Carved Out Interest or the
                  fair market value of ibe Percentage Interest to be distributed hereunder, which value
                  is conclusively deemed to be ibe Percentage Interest multiplied by the initial
                  purchase price of the Alliance Royalty Properties from Noble Royalties, lnc. in the
                  amount of $26,348,400. for those of the Alliance Royalty Properties transferred. All
                  parties aclmowJedge that the Release contained in ibis subparagraph 3 shall be
                  effective only when the Carved Out Interest is conveyed.

        (c)       Further, by signing below, the Grantor lIClrnowledges having read and understood
                  the terms of lhis Release and tbe consequences of signing tms Release. Gnntor
                  further acknowledges having had the opportunity to have the terms of lhis Release,
                  and the consequences thereof, el<plained by II self-chosen attorney.

        (d)       The Release contained in this subparagraph 3 is contingent upon the distribution of
                  the Carved Out Interest to W. A. Boothe Family. Ud .. Any such release is null and
                  void and of no effect if said distribution does not occur.

        Notwithstanding any other provision of this Release, the Granwr does not release any claims
        pertaining to those assets 001 being distnooted to W. A. Bootbe Family, Ltd .. hereunder.

4.      Attomm' Feg

        Subject to Pangrapb 8, each party hereto shall bear an attorneys' fees and costs arising from
        the action of lIS own counsel in connection with this matter, the terms of this Release, the
        matten and documents referenced herein, and aU related matters.

5.      Govrodpg Law and Forum

        This Release shall be governed by and constmedfn accordance with the laws orNev;s, West
        Indies. Asay dispute that may arise hereunder shall be brought only in a court of comperent
        jurisdiction in Nevis, West mdies, as a convenient forum for the parties hereto.



        (8)       This Release may be executed in two or more counterparts. Any single counterpart or a
                  set of counterparts signed in either case by all the parties hereto shall constitute a fun
                  and original version of this Release for all purposes. An electronic or fucsimile copy
                  shall be deemed to be a signed original.

        (1))      The Tmstee and the Uquidaoon Fund agree to take such further acts as may be
                  necessary to convey legal title to W. A. Boothe Family, Ltd., with respect to the assets
                  being conveyed hereunder.

7.      Dispute with Noble Royalties, Inc•

       . (a)      The parties acknowledge thai Alliance RoyaJty Inc. has potential claims against
                  Noble Royalties, Inc. in connection with its acquisition of the Alliance Royalty
                  Properties from Noble Royalties, Inc., whicb are to be resolved by arbitration. In that
                  regard, the Trustee and the Liquidation Fund warrant and represent that an !l1bitration
                  proceeding win be filed by Alliance Royalty Inc. within 90 dayS; and that the claims
                  filed will be pursued in acoordance with the procedures set forth ill the agreements

Cor!fidelllial                                Page3<>j5
Partial Release                                                                First Fidelity Trust, Limited
                   between Alliance Royalty Inc. and Noble Royalties, Inc. in connection with the
                   acquisition of the Alliance Royalties Properties. The parties acknowledge !hat
                   Alliance Royalty Inc. may receive through settlement, arbitration or otherwise, II
                   recovery or monetary payment. Gnmtor acknowledges and agrees that he sha11 have
                   no right to contllct or direct counsel for the Trustee, Alliance Royalty Inc. or the
                   Liquidation Fund. and that the those entities have the exclusive right to manage any
                   mbitration or litigation proceedings, and may resolve or settle the claims on such
                   terms as they believe appropriate in the exercise of their discretion.

       (b)         Gnmtor agrees 1I0t to cooperate with, communicate with or assist Noble Royaffies,
                   Inc. or any other persons who are not parties to this Release, except to the extent
                   required by .law or as directed by !he Arbitrators. Grantor agrees that any information
                   not generally known to the public, win not, without the prior permission of the other
                   parties to this Release. be disclosed to any persons other than the parties to this
                   Release. If Grantor is compelled by any legal process to disclose any information
                   related to this matter, Gnmtor agrees that be shall provide the other parties to this
                   Release with prompt written notice of such legal process so as to enable the other
                   parties to obtain an appropriate protective oroer. If a protective order or other remedy
                   is not obtained, Grantor shall furnish only thaI information which Grantor is advised
                   by written opinion of counsel must be disclosed.

           (c)     Additionally, the parties agree to cooperate with eacb other in order to maximize any
                   rec()very, and acknowledge that should Alliance Royalty Inc. receive a recovery or
                   settlement from Noble Royalties. Inc. prior to the Trustee's distribution of !he Carved
                   Out Interest to W. A. Boothe Family, Ltd ... sucb distribution shall also include the
                   Trust's pro rata interest in the recovery or settlement received less a pro-rata share of
                   the routine ftmd expenses and applicable litigation expenses.

8.         Specific; PeriormaJu;e, Attorneys' Fees

           If available under the laws of Nevis, West Indies, !he provisions of this Agreement shall be
           enforceable by decree of specific performance without necessity of posting bond. If any
           Party breaches snch Party's obligations under this Agreement, then, in addition to any actual
           damages or other relief available to the prevailing Party in It suit to enforee this Agreement,
           the prevailing Party shall be entitled to recover reasonable attorneys' fees and related
           expenses (including fees of expert witnesses) from the breaching Party, notwithstanding any
           indemnity or release otherwise provided for in this Agreement.




           H_ ,;,."." ~know'oIg'"                                         r..,
9.         EJ[eeutioD and Acceptance


           zoot  by:
                                          "u1 """',,"" b _ 00       "i.            of   ~"'" ""Cr'
Grantor:
     ~-...

William A. BooIhe




Ccnfrdential                                   Page 4 of5
Partwl Release                                                                  First Fidelity Trust, Limited
Witnes/"


Trustee:

The Company seal was hereto
Affixed by its Managing Director
Keithley F T      e                           CIS




Con/ldential                       Page50J5
Partial Release                                     First Fidelity 'ihJst, Limited
I
                                ALli,u1ceRoyalties, Inc.
                                  The Law Building
                                      The Valley
                                    Angui lIa, B WI

                                          April 30,2009


    By FAcsr,,,·uLlt 972.720.1899

    Compa:;s Royalty ManagcmeilL I.LC
    1560 I North Dallas Parkway. Suite 9t)()
    Addison, Texas 75001
    Attn: Property and Asset Management Department

           Re:     Those certain tive (5) managementagreemems hetween Compa::;s Royalty
                   Managernent, LLC ("Manager") and Alliance F.uyulties, Inc. ("Interest
                   Holder"), and which relate to the Dmke Propcr,it'~, the Cottonwood
                   Properties, the Elk Horn Properties. the PrCl1h)nl Properties and the Teal
                   Properties (the "Management Agreements")

    To Whom ilmay Concern:

            Pursnant to the terminat.ion provisions of the iVlanagemcnt Agreements, Interest
    Holder hereby gjvC~B notice to Manager that effective Jun~~ :~i), 2.<)09, lnterest Holder
    hereby terminates all Management Agrcen'!eIlts between it ~llld tvlannger.l'o the extent
    Manager desires a particulm' other form of termination, please illlrnediately deliver it to
    Interest !folder by fac~jmile number H13~388-4456 or emai! duane@?otsi.net. In any
    event, the dtective termination date is June 29, 2009 unkss sooner agreed lo by tbe
    lnterest Holder and Manager.

           Please immediately provide me ""'jlh the       inr()rm~lliDJi          necessary to mnke the
    lnUlsition to a new rnanager.

                                                   Vcry truly    Y()lllS,



                                                                /'      /''"''\




                                                   By:



    e.c:   Stan Padgett
           Kenndh W. Biermacher




                                                                                        ~004'O

				
DOCUMENT INFO
Shared By:
Tags: lasik, dallas
Stats:
views:371
posted:3/15/2011
language:English
pages:63