Colorado Springs, Colo., Aug. 3, 2012— Colorado Springs, Colo.-based oil and gas exploration company HEI Resources Inc. is announcing a unanimous jury verdict handed down in the company's favor following a Colorado State District Court lawsuit filed by a former venturer.
In the lawsuit, the former venturer claimed that HEI and company founder Charles Reed Cagle had violated both Colorado and North Carolina securities laws by selling interests in oil and gas exploration programs without first registering them as securities. In response, HEI and Mr. Cagle asserted that the joint venture interests sold by HEI were not and are not securities under either state's laws.
Following a six-day trial and evidence from seven witnesses, including two expert witnesses, the jury ruled unanimously in favor of HEI and Mr. Cagle following only three hours of deliberations. In the verdict, the jury found that the interests sold by HEI in the Los Ojuelos #7 and Ilse Miller #1 Joint Ventures are not securities under Colorado or North Carolina law.
"We are extremely pleased that the jury agreed with our position that these interests are a true general partnership and not securities," Mr. Cagle, CEO and president for HEI, said. "We have always maintained that HEI's joint ventures are true general partnerships, where the venturers are active in making management decisions and controlling the success or failure of the venture. We believe this verdict is yet another instance in which HEI's position has been affirmed."
HEI and Mr. Cagle were represented at trial by attorney Andrew Shoemaker of Boulder, Colo.-based Shoemaker Ghiselli & Schwartz, and Donnie W. Wisenbaker of Dallas-based Bell Nunnally & Martin.