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Investor Group Sends Letter To Texas Pacific Land Trustees Highlighting Urgent Need For Corporate Governance Reform At TPL


DALLAS, July 1, 2019 /PRNewswire/ -- SoftVest, L.P., Horizon Kinetics LLC and ART-FGT Family Partners, the Investor Group which collectively beneficially owns over 25% of the outstanding shares of Texas Pacific Land Trust (NYSE:TPL) (the "Trust" or "TPL"), today announced that Murray Stahl, Chairman of Horizon Kinetics LLC, sent a letter to David Barry and John Norris highlighting the urgent need for corporate governance reform at the Trust for the benefit of all shareholders.

The full text of the letter is below.

July 1, 2019

Texas Pacific Land Trust
Messrs. John Norris and David Barry
1700 Pacific Avenue, Suite 2770
Dallas, TX 75201


I have reviewed your most interesting press release of June 27, 2019.  In this document, you call attention to the possibility that a certain large but nonetheless minority shareholder might gain control of two trustee positions and thereby control the enterprise.  This investor would then be in a position to act in a manner detrimental to the interest of the majority of the shareholders.  Of course, this is only possible because the current corporate structure concentrates very substantial powers in two lifetime trustees should these trustees undertake to act in unison.

Accordingly, based upon the force and substance of your example, one would think that you would be in favor of a transition to the contemporary conception of corporate governance in which power is diffused in a board composed of a multiplicity of members representing a multiplicity of backgrounds and perspectives.  Term limits are an important part of such a governance structure as it further diffuses power to the majority of shareholders.

Unfortunately, you have come to the conclusion that the best way to prevent the concentration of power is to perpetuate the governance rules that make possible such a concentration of power.  If it is right and proper that you should be fearful of a potential concentration of power, then surely it must be right and proper that I should be fearful of an actual concentration of power. 

A conventional, although by no means the only solution to the problem of the unwanted sale of the company, would be to require a supermajority of the shares to consent to any such transaction.  It is worthwhile observing that some months ago you undertook asset and sale purchase transactions that were not subject to the consent of any shareholders.

The basic principle of modern corporate governance is that governance occurs with the consent of the governed.  It is principally for that reason that I have advocated change to the current 19th century form of corporate governance.

Your press release and the examples you cite simply calls attention with clarity to the range of abuses possible within the current framework.  It is for that reason that the other day I called upon you to provide each shareholder with an updated shareholder list to facilitate the formation of open discussion groups among shareholders with a view of developing a consensus regarding alternative governance structures.

Incidentally, I declined to join your exploratory committee since I would have been required to sign a confidentiality agreement regarding governance discussions.  I wished to retain the liberty of open discourse and I hope that the shareholders who read this letter will find it to be a constructive effort to promote discussion.

In any case, I look forward to reading your next shareholder communication.


/s/ Murray Stahl

Murray Stahl

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SOURCE SoftVest, L.P., Horizon Kinetics LLC and ART-FGT Family Partners

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