XML 62 R25.htm IDEA: XBRL DOCUMENT v3.19.3
SUBSEQUENT EVENTS
9 Months Ended
Sep. 30, 2019
Subsequent Events [Abstract]  
SUBSEQUENT EVENTS

18. SUBSEQUENT EVENTS

We have evaluated subsequent events for recognition or disclosure in the unaudited condensed consolidated financial statements and no events have occurred that require recognition or disclosure, except for the following.

On November 7, 2019, Summit Midstream Partners, LP (the “Partnership”) and Summit Midstream Partners Holdings, LLC (“SMP Holdings”) entered into a second amendment (the “Second Amendment”) to that certain Contribution Agreement between SMP Holdings and the Partnership dated February 25, 2016, as amended, pursuant to which the Partnership shall, on or before November 15, 2019, make a cash payment of $51.75 million and issue 10,714,285 Common Units to SMP Holdings (the “November 2019 Prepayment”). In addition, the parties have agreed to further reduce by $19.25 million the remaining portion of the consideration due to SMP Holdings under the Contribution Agreement. Following the Second Amendment and the November 2019 Prepayment, the remaining portion of the consideration due to SMP Holdings will be $180.75 million (the “Remaining Consideration”). The parties have also agreed to extend the final date by which the Partnership is obligated to deliver the Remaining Consideration to January 15, 2022. The Remaining Consideration remains payable to SMP Holdings in (i) cash, (ii) the Partnership’s common units or (iii) a combination of cash and the Partnership’s common units, and interest continues to accrue (and is payable quarterly in cash) at a rate of 8% per annum on any portion of the Remaining Consideration that remains unpaid after March 31, 2020. The form(s) of Remaining Consideration to be delivered by the Partnership to SMP Holdings continue to be determinable by the Partnership in its sole discretion. The terms of the Second

Amendment were approved by the conflicts committee of the board of directors of the general partner of the Partnership, which consists entirely of independent directors.

On October 18, 2019, a petition was filed in the District Court of Tarrant County, Texas by Sage Natural Resources, LLC (the “plaintiff”) against us and certain of our affiliates. The plaintiff is a party to a gathering agreement with DFW Midstream and a gas marketing agreement with Summit Midstream Marketing, LLC. In its petition, the plaintiff alleges various claims relating to the fees it was charged pursuant to the terms of these agreements, including breach of contract, fraud, fraudulent inducement, tortious interference, and negligent misrepresentation, as well as certain discriminatory rate claims under Texas law. The plaintiff seeks a rescission of the gas marketing agreement and the gas gathering agreement, as well as actual and exemplary damages and attorney’s fees. While we cannot predict the ultimate outcome of this matter with certainty, we do not believe that it is likely that we or our affiliates will be subject to any material liability as a result of this matter and are defending ourselves vigorously against the plaintiff’s claims.