Tuesday, October 8, 1996

Supreme Court Denies Jones Hearing
By the Associated Press
(Oct. 8, 1996)

The U.S. Supreme Court has refused to hear an appeal by Dallas Cowboys owner Jerry Jones and a former business partner, making the two liable for a multi-million dollar settlement to Arkansas landowners with whom they had mineral rights agreements.

The 8th U.S. Circuit Court of Appeals ordered Jones and Michael McCoy to split money from the sale of Arkoma Production Co. with the 3,000 Arkansas landowners they'd had leasing agreements with. Jones and McCoy appealed.

Jones and McCoy were found to have improperly profited from the 1986 sale of their natural gas interests to Arkansas Louisiana Gas Co, now known as Arkla. NorAm Energy Corp. of Houston is Arkla's parent company. The sale price was $174.8 million.

In January, a three-judge panel directed the U.S. District Court in western Arkansas to determine how much money the 3,000 - who are members of a class action suit - should receive from Jones and McCoy. The total was around $9.4 million, but the 2-1 ruling by the appeals panel left it up to a district judge to determine the specific amount. Interest could raise the total.

On Monday, U.S. District Judge Jimm Hendren of Fort Smith said he had not seen the Supreme Court decision. Hendren will likely have to determine the payout.

"I'll try to get to it as soon as I can. I know a lot of people are interested in it," Hendren said.
A secretary in Jones' Dallas office said he wasn't discussing the case on advice of his attorney. Jones was named one of America's 400 richest people by Forbes magazine, reportedly worth $435 million.

McCoy, who went to Dallas with Jones and served as a Cowboys vice president, now runs an oil and gas company in Dallas. He couldn't be reached for comment.

Jones and McCoy started Arkoma Production in 1981. In 1982, Arkoma entered into an agreement with Arkla that included a "take-or-pay" clause that required Arkla to take 75 percent of a well's daily production or pay its value, which was set at $3.83 per thousand cubic feet.

Arkla fell behind on its payments and eventually owed Arkoma $36 million. Jones and McCoy resolved the dispute by selling Arkoma to Arkla.

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