Geodyne Energy Income Production Partnership I-E v. Newton Corp.

The Newton Corporation bid $300 at an industry auction, and got a quitclaim deed of Geodyne’s 1 interest in an offshore mineral lease. Six months later, Newton was informed that the lease had expired and the operator wanted reimbursement for the costs of plugging and abandoning the well. Finding a violation of section 581-33(A)(2) of the Texas Securities Act (TSA), 2 the jurors and judges below rescinded the auction sale and assessed abandonment costs against Geodyne. 3

Since the adoption of section 33(A)(2) in 1963, this Court has never reviewed a claim against a seller under that section’s…