Continuation Vehicle Transactions Raise Questions Regarding Process, Pricing and Governance
Replacement of Conflicted Transaction Counsel with Litigation Counsel Does Not Cure Process Failures
Mason Calls for Good Faith Engagement by the Board to Address Minority Investor Rights
NEW YORK, Feb. 4, 2026 /PRNewswire/ — Mason Capital Management LLC (“Mason”), a significant, long-standing investor in Ascent Resources, LLC (“Ascent” or the “Company”), today announced that it has sent a letter to litigation counsel for Ascent’s Board of Managers (the “Board”) reiterating substantial concerns regarding the Board’s conduct to facilitate the sale of interests in Ascent to continuation vehicles managed by The Energy & Minerals Group LP (“EMG”) and First Reserve Corporation (“First Reserve”) despite superior available alternatives.
In the letter, Mason expands upon its concerns regarding the transactions led by EMG and First Reserve, which Mason believes had the effect of suppressing price, deterring other bidders and advantaging affiliated sponsors at the expense of minority stakeholders. The letter notes that the Board has refused to engage altogether on these concerns with stakeholders such as Mason whose contractual and economic rights are directly affected by the transactions. Absent prompt, substantive engagement by the Board focused on maximizing value for all stakeholders, Mason will evaluate all available options to compel the Board to discharge its obligations.
The full text of the letter follows:
January 30, 2026
Andrew J. Rossman
Quinn Emanuel
295 5th Avenue
New York, NY 10016
Re: Ascent Resources, LLC
Andrew,
We acknowledge your letter of January 28th and Quinn Emanuel’s appearance for Ascent.
As an initial matter, please confirm that Kirkland & Ellis is no longer advising the Ascent Board of Managers in any capacity—whether formal or informal—including with respect to strategic alternatives, governance, or transactions involving EMG or affiliated parties.
We have reason to believe that, in the face of imminent fund terminations that would have resulted in distributions to LPs and/or a sale to third parties, First Reserve and EMG acted in concert to retain control. The transaction history speaks for itself. First Reserve recently executed a CV transaction transferring approximately 35% of the Company. EMG has now pursued a second CV transaction of roughly the same magnitude. This sequencing was not incidental.
A contemporaneous acquisition of these interests—aggregating approximately 70%—would have constituted a control transaction, necessitating a control premium. By staggering the transactions to create the appearance that neither party was a seller, EMG and First Reserve retained control while intentionally suppressing the price, avoiding any meaningful market check and forcing minority holders into materially discounted outcomes. Delaware law treats such conduct as a conflicted controller transaction in substance, regardless of form.
Furthermore, the Board’s silence and inaction toward minority investors, together with the active suppression of meaningful available alternatives by controllers, is inconsistent with good-faith conduct.
The motive is evident: serial CV transactions that suppress price, deter other bidders, and advantage an affiliated sponsor constitute self-dealing, requiring action by the Board. The failure by the Board to act, as required by Delaware law, is not exculpable, not insurable, and not protected by the business judgment rule. Managers who knowingly facilitate conflicted control transactions face personal liability for bad faith and loyalty breaches. See In re Nine Systems Corp. S’holders Litig., 2014 WL 4383127 (Del. Ch. Sept. 4, 2014).
That exposure extends to the entire period during which Kirkland & Ellis advised the Board in connection with this scheme. The presence of conflicted counsel does not cleanse the conduct; it compounds it.
Turning to engagement, our January 12th correspondence addressed specific contractual and economic rights held by Mason Capital through CNR.
To be clear:
- Mason holds enforceable contractual and economic interests through CNR that are being directly affected by the Board’s actions and refusal to act.
- The Board’s decision to decline engagement altogether – while selectively engaging with other stakeholders – raises tortious interference and related claims that are not subject to arbitration and would proceed publicly.
- Your letter inexplicably asserts that Ascent is evaluating strategic opportunities “through appropriate channels and processes”. Our client has repeatedly indicated a willingness to engage constructively, including in connection with bona fide strategic alternatives. That willingness has been met with silence.
In fact, the Company has declined to engage with Mason or Kimmeridge, while routing communications exclusively through litigation counsel. Delaware law is clear that good faith requires more than silence. A conscious failure to engage with materially affected investors constitutes bad faith. In re Walt Disney Co. Derivative Litig., 906 A.2d 27, 67 (Del. 2006).
As you know, Quinn Emanuel serves as litigation counsel, not transaction counsel, and does not replace a good-faith strategic or deal process. Board duties are non-delegable and cannot be discharged by litigation advisors. In re Rural Metro Corp. S’holders Litig., 88 A.3d 54, 82–85 (Del. Ch. 2014).
We also reject any suggestion that Mason’s correspondence being made public was improper. Where a board advances conflicted control transactions while refusing engagement, transparency is necessary to protect contractual rights and inform affected stakeholders.
Mason has not waived, and does not waive, any rights or remedies.
Before proceeding further, our client is prepared to allow a short window for a substantive discussion focused narrowly on (i) CNR’s contractual position and (ii) a path forward that avoids unnecessary litigation and public discovery. Absent that, Mason will evaluate all available options.
Please produce a complete and current copy of CNR’s operating agreement by Monday, February 2nd at 5:00 P.M. ET, and advise by close of business on Wednesday, February 4th whether Ascent is prepared to engage on that basis.
Regards,
James C. Woolery, Esq.
Founding Partner
Woolery & Co PLLC
CC. Kenneth M. Garschina
Managing Member
Mason Capital Management LLC
About Mason Capital Management LLC
Mason Capital Management LLC is an absolute return focused investment firm that combines deep fundamental analysis with hard catalysts to drive value creation. Founded in July 2000 by Ken Garschina and Mike Martino, Mason’s strategies range from event-driven investing to corporate carve-outs and control acquisitions. Mason’s control investments include CB&I, the world’s foremost designer and builder of storage facilities, tanks and terminals for energy and industrial markets.
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SOURCE Mason Capital Management
