May 28, 2009 (FinancialWire) — Quest Resource Corp. (NASDAQ: QRCP) and Quest Energy Partners, L.P. (NASDAQ: QELP) said they have entered into settlement agreements with the former CEO of the company, the controlled-entity and the other owners to settle litigation concerning $10 million in questionable transfers.

QRCP and QELP had jointly conducted an investigation into questionable transfers by QRCP and its affiliates to an entity controlled by Jerry Cash, the former chief executive officer of QRCP and QELP. As part of the investigation, QRCP and QELP filed lawsuits against Cash, the controlled-entity and the other owners of the controlled-entity seeking to recover the funds that were transferred.

Under the terms of the settlement agreements, QRCP received approximately $2.4 million in cash and 60% of the controlled-entity’s interest in a gas well located in Louisiana and a landfill gas development project located in Texas while QELP received the stock of a corporation that owns certain oil producing properties in Oklahoma.

David Lawler, president of QRCP and QELP, said, “Although we would have preferred to have received assets with value equal to the amount of the questionable transfers and the cost of our internal investigation, we believe the settlements are in the best interest of both QRCP’s and QELP’s stakeholders given the cost, uncertainty, and delay in pursuing our potential claims through litigation.”

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