HighPeak Energy, Inc. 10-Q

ITEM 1. LEGAL PROCEEDINGS From time to time, the Company may be a party to various lawsuits, proceedings and claims incidental to its business. While many of these matters involve inherent uncertainty, the Company believes that the amount of the liability, if any, ultimately incurred with respect to these proceedings and claims will not have a material adverse effect on the Company's consolidated financial position as a whole or on its liquidity, capital resources or future results of operations. On May 29, 2024, a purported HighPeak stockholder filed a derivative lawsuit in the Delaware Court of Chancery against various current and former HighPeak directors, alleging that the Company’s directors breached their fiduciary duties in approving the Company’s CEO’s and President’s compensation. In general, the plaintiff alleges that the Company’s directors engaged in an inadequate process and approved excessive compensation in the years 2020 through 2023. The plaintiff seeks disgorgement of the Company’s CEO’s and President’s compensation, an order requiring HighPeak to make various changes to its corporate governance policies, attorneys’ fees, and other relief. The defendants have filed a motion to dismiss the lawsuit. The Company believes the lawsuit is without merit and intends to vigorously defend against it.