TEL OFFSHORE TRUST (OTCMKTS:TELOZ) Files An 8-K Other Events

TEL OFFSHORE TRUST (OTCMKTS:TELOZ) Files An 8-K Other Events

Item 8.01 Other Events.

Settlement of Probate Proceeding with Corporate
Trustee

As previously disclosed in the Current Report on Form8-K filed by
the TEL Offshore Trust (the Trust) with the Securities and
Exchange Commission (SEC) on May17, 2017, The Bank of New York
Mellon Trust Company, N.A. (the Corporate Trustee), Glenn M.
Karisch, the attorney ad litem (the Ad Litem) appointed by the
Probate Court of Travis County, Texas (the Court) in the
previously announced probate proceeding (the Probate Proceeding),
RNR Production Land and Cattle Co.,Inc. (RNR) and Albert and
Joyce Speisman (the Speismans, and together with RNR and the Ad
Litem, the Plaintiffs) entered into a Settlement Agreement (the
Corporate Trustee Settlement Agreement) with respect to all
claims previously asserted against the Corporate Trustee. The
Corporate Trustee Settlement Agreement requires a payment by the
Corporate Trustee of $4million into the TEL Offshore Trust
Qualified Settlement Fund (the QSF) on a date (the Settlement
Payment Date) within five business days after (i)the approval of
the settlement by the Court and the entry of a proposed final
judgment (the Final Judgment as to Corporate Trustee) dismissing
with prejudice all claims against the Corporate Trustee, and
(ii)the expiration of the time for appeal and exhaustion of all
appeals.

The Corporate Trustee Settlement Agreement and the proposed Final
Judgment Modifying and Terminating the Trust provide for certain
modifications to the Trust Agreement for the TEL Offshore Trust
(the Trust Agreement), including the termination of the Trust.
The Final Judgment Modifying and Terminating the Trust provides
that the Trust shall terminate at 5:00p.m.Eastern Daylight Saving
Time on June30, 2017 (the Record Date and Time); provided such
date will be delayed in the event an appeal is filed and may be
delayed upon request of the Ad Litem or the Corporate Trustee if
necessary. Upon the Record Date and Time, all rights of holders
of units of beneficial interest in the Trust (Units) in and under
the Trust Agreement shall terminate and all Units shall cease to
exist. The Final Judgment Modifying and Terminating the Trust
provides that as of the Record Date and Time each Unit holder
shall be limited to its rights with respect to the QSF. The Final
Judgment Modifying and Terminating the Trust further provides
that the Trusts transfer books will be closed and that trading of
Units shall not be permitted after the Record Date and Time and
the Trusts transfer agent will stop processing any Unit transfers
as of the Record Date and Time.

At the hearing held on May15, 2017, the Court approved, among
other motions, the Corporate Trustee Settlement Agreement, the
Final Judgment as to Corporate Trustee and the Final Judgment
Modifying and Terminating the Trust. The Corporate Trustee
Settlement Agreement and the Order Approving Settlement Agreement
also require the Corporate Trustee to transfer into the QSF all
funds remaining in the segregated account maintained by the Trust
on the Settlement Payment Date. The Final Judgment Modifying and
Terminating the Trust provides that the Corporate Trustee will
have no liability for transferring the remaining funds in the
segregated account to the QSF. Once the settlement payment and
any remaining funds in the segregated account are paid to the QSF
and the Corporate Trustee has performed certain other obligations
under the Corporate Trustee Settlement Agreement, (i)the
Corporate Trustee shall have no further obligations or duties
under the Trust Agreement and the Corporate Trustee and the
individual trustees (the Trustees) are discharged and released as
Trustees of the Trust, and (ii)any Unit holders sole rights by
virtue of their status as a Unit holder or a former Unit holder
shall be their right to follow the claims procedures established
by the Court to make a claim to funds in the QSF. The QSF will be
used as the Court orders and approves, including the payment of
the Plaintiffs attorneys fees and expenses, the fees and expenses
of the Administrator, and the remainder, if any, distributed to
Unit holders according to the Allocation Agreement entered into
among the Plaintiffs.

The time period for appeal of the Final Judgment as to Corporate
Trustee and the Final Judgment Modifying and Terminating the
Trust expired on June14, 2015 with no appeals having been filed.
In accordance with the terms of the Corporate Trustee Settlement
Agreement and the Final Judgment Modifying and Terminating the
Trust:

the Corporate Trustee will pay the sum of $4 million into the QSF
on or before June21, 2017;

the Corporate Trustee will transfer to the QSF all funds
remaining in the segregated account on or before June21, 2017;

the Trust shall terminate as of the Record Date and Time and all
of the Units shall cease to exist;

the Trusts transfer books will be closed and any trading of the
Units shall not be permitted after the Record Date and Time; and

as of the Record Date and Time, the rights of each Unit holder
shall be limited to its rights with respect to the QSF.

The foregoing descriptions of the Corporate Trustee Settlement
Agreement and the Final Judgment Modifying and Terminating the
Trust are not complete and are qualified in their entirety by
reference to the full text thereof, copies of which were filed as
Exhibits 99.1 and 99.2, respectively, to the Current Report on
Form8-K filed by the Trust with the SEC on May17, 2017.

TEL OFFSHORE TRUST ExhibitEX-99.1 2 a17-15448_1ex99d1.htm EX-99.1 Exhibit 99.1   NOTICE TO TEL OFFSHORE TRUST UNIT HOLDERS   By Court Order dated May 15,…To view the full exhibit click here About TEL OFFSHORE TRUST (OTCMKTS:TELOZ)
TEL Offshore Trust (the Trust) owns approximately 99.99% interest in the TEL Offshore Trust Partnership (Partnership). Chevron U.S.A., Inc. (Chevron) owns the remaining .01% interest in the Partnership. The Trust’s primary source of liquidity and capital is the royalty income received from its share of the net proceeds from the royalty properties. The Trust’s reserve report notes that there were approximately five productive royalty properties, which consist of Ship Shoal 182/183, South Timbalier 36, South Timbalier 37, Eugene Island 339 and Eugene Island 342.