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Commitments And Contingencies
3 Months Ended
Mar. 31, 2014
Commitments and Contingencies Disclosure [Abstract]  
Commitments And Contingencies
Commitments and Contingencies
The Company is a party to proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to such proceedings and claims will not have a material adverse effect on the Company's consolidated financial position as a whole or on its liquidity, capital resources or future annual results of operations. The Company records reserves for contingencies when information available indicates that a loss is probable and the amount of the loss can be reasonably estimated.
Settlement of Lawsuit relating to the Pioneer Southwest merger. On May 15, 2013, David Flecker, a purported unitholder of Pioneer Southwest, filed a class action petition on behalf of Pioneer Southwest's unitholders and a derivative suit (the "Flecker Lawsuit") on behalf of Pioneer Southwest against the Company, Pioneer Natural Resources USA, Inc. ("Pioneer USA"), Pioneer Natural Resources GP LLC (the "General Partner") and the directors of the General Partner, in the 134th Judicial District of Dallas County, Texas (the "Court"). A similar class action petition and derivative suit was filed against the same defendants on May 20, 2013, in the 160th Judicial District of Dallas County, Texas, by purported unitholder Vipul Patel (the "Patel Lawsuit"). On September 3, 2013, the Patel Lawsuit was consolidated into the Flecker Lawsuit (as consolidated, the "Pioneer Southwest Lawsuit"), and the plaintiffs filed a consolidated derivative and class action petition on September 5, 2013.
The Pioneer Southwest Lawsuit alleged, among other things, that the director defendants: (i) engaged in self-dealing, failed to act in good faith toward Pioneer Southwest, and breached their duties owed to Pioneer Southwest; (ii) failed to properly value Pioneer Southwest and its various assets and operations and ignored or failed to protect against the numerous conflicts of interest arising out of the proposed transaction; and (iii) breached the implied covenant of good faith and fair dealing by engaging in a flawed merger process. The lawsuit also alleged that the Company, Pioneer USA and the General Partner aided and abetted the director defendants in their purported breach of fiduciary duties. Based on these allegations, the plaintiffs sought to have the Pioneer Southwest merger rescinded. The plaintiffs also sought money damages and attorneys' fees.
In September 2013, representatives of the plaintiffs and the defendants entered into a memorandum of understanding (the "Memorandum of Understanding") to settle the claims and allegations made in the lawsuit. As part of the consideration for the settlement, the Agreement and Plan of Merger (the "Merger Agreement") was amended to provide for contractual appraisal rights for the unitholders. In January 2014, the defendants and representatives of the plaintiffs entered into a stipulation of settlement (the "Stipulation of Settlement"). The Stipulation of Settlement provides for a full and complete discharge, dismissal with prejudice, settlement and release of all claims, suits and causes of action by the plaintiffs (other than appraisal rights under the Merger Agreement) against the defendants and their representatives arising out of or relating to the allegations made in the Pioneer Southwest Lawsuit, the Pioneer Southwest merger or any deliberations, negotiations, disclosures, omissions, press releases, statements or misstatements in connection therewith, any fiduciary or other obligations in respect of the merger or any alternative transaction or under Pioneer Southwest's partnership agreement, or any costs and expenses associated with settlement other than as provided in the Stipulation of Settlement.
On March 17, 2014, the Court entered an order approving the settlement of the Pioneer Southwest Lawsuit in accordance with the terms of the Stipulation of Settlement and dismissing the lawsuit with prejudice in its entirety as to the defendants and against plaintiffs and all other members of the Class.