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In early 1986, the Samson group established a consulting
arrangement with Suits Drilling Co. (Suits), a drilling
contractor and rig fabricator. Over a period of years prior to
the Samson acquisition, members of the Samson group, as operators
of oil and gas leases, contracted with Suits for drilling
services many times. Suits was owned by Jerry Suits, Tom
Dillingham, and Dan Dillingham.
In July 1986, Jerry Suits brought the possibility of
purchasing CDC to Samson's attention. Jerry Suits was familiar
with CDC and CDC's business because Dillingham Insurance Agency,
which was owned by Tom and Dan Dillingham, provided insurance for
CDC.
Alan W. Carlton, senior vice president in charge of
acquisitions and operations, led Samson's negotiations for the
purchase of CDC. Mr. West, who became CDC's president and CEO in
September 1986, represented CDC in the negotiations.
At the time of the Samson acquisition, the bank group wanted
to convert their CDC stock into cash as soon as possible.
On December 31, 1986, Samson purchased CDC pursuant to a
stock purchase agreement and an agreement relating to assignment
and partial release of security interests between the bank group
and Samson. Samson acquired 100 percent of CDC's stock for a
payment of $5,201,184 to the shareholder trust. In exchange for
obtaining the release of the bank group's security interests in
CDC's rigs and related equipment, Samson paid $3,098,854.40 to
the bank group, other than Continental Illinois National Bank
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