BackA Descendant of Freed Slaves, Financier Pursues Family’s $900 Million Oil Claim
Kneeland Youngblood alleges his family was deprived of the riches from oil-soaked land and is suing ConocoPhillips.
PremiumDALLAS—At Kneeland Youngblood’s graduation from Princeton, his grandfather told him that he had once sought to visit the campus in the 1920s but was stopped at the school’s gates because he was Black.
After amassing a fortune, Youngblood donated to build a new plaza at his alma mater and had his grandfather’s name chiseled into the steps.
Youngblood, the co-founder of private-equity firm Pharos Capital Group, now says he is righting another family wrong he says was perpetuated by one of the country’s largest oil companies. He and his family are suing ConocoPhillips, accusing it of depriving them of the riches from oil-soaked land in South Texas bought by his ancestors, who were freed slaves. They are seeking more than $900 million.
The lawsuit may be a long shot, according to several lawyers in the energy sector. Youngblood, a fixture in corporate boardrooms and Democratic political circles, says he is undeterred. The Dallas-based investor said a verdict against ConocoPhillips would rank as high as any deal he has closed and with a nearly $1 billion upside.
“If it goes to a verdict, I think we can get a lot more," he said.
At the heart of the dispute is a tract in the Eagle Ford shale, one of the most productive oil regions in the nation. ConocoPhillips, Youngblood and his family allege, ignored his family’s claims to the property and sided with another family, the Korths, to streamline royalty payments and drill as quickly as possible.
The roots of the legal battle reach back to the years following the Civil War. Youngblood’s ancestors, the Eckfords, acquired land after they were freed from slavery. In the decades after they died, the claim to the rightful ownership became muddied. In taking up the fight for the Eckford side, Youngblood has become the champion of an extended family he didn’t realize he had.
While oil booms have been transformative for the bank accounts of countless landowners across Texas, few Black people have benefited, in part because they were widely dispossessed of property in the Jim Crow era, during which the Eckfords became landowners.
Between 1910 and the end of the 20th century, Black farm operators nationally lost more than 90% of their land, according to Thomas Wilson Mitchell, a professor at Boston College Law School. In 2012, whites managed more than 86% of farms in Texas, according to Texas A&M’s Natural Resources Institute, while Blacks managed about 3%.
Even if he loses, Youngblood, 67 years old, says it will have been worth the effort because the case has brought his family closer as they try to honor their forebears’ achievement after being freed from slavery.
“This is about legacy," he said.
Youngblood and his family clinched a preliminary victory this summer when a Texas jury said they co-owned the disputed land, which the Korths, who are white, have ranched and hunted on since around World War II. A final judgment was entered in this case earlier this month, and the lawsuit against ConocoPhillips filed by Youngblood and his relatives is now expected to move forward in a separate court, a family lawyer said.
A lawyer for the Korth family said it would appeal the judgment. “The Korths were the ones who put their blood, sweat and tears into the land," he said.
ConocoPhillips denied wrongdoing in court filings. Christopher Kulander, a professor at South Texas College of Law Houston, said that asking for over $900 million in damages seemed excessive considering that the tract is only 147.5 acres. He said it would make sense for ConocoPhillips to side with the Korths if supporting their claim helped the company deal with fewer royalty owners.
Youngblood had a modest upbringing in Houston’s suburbs. After Princeton, he became a doctor and worked in the ER for 12 years before co-founding Pharos in 1998, which primarily invests in healthcare companies. Today it has about $1.5 billion under management.
Besides running his firm, he sits on President Biden’s Intelligence Advisory Board—he plans to host a fundraiser for him this fall—and travels the world for billionaire investor Michael Milken’s namesake institute, a think tank focused on public health and economic research. Youngblood became the first African-American to gain full-membership at the 127-year-old Dallas Country Club in 2014.
Before the case, Youngblood didn’t know much of the Eckford lineage, as the passage of time obscured the family tree. The lawsuit formed new connections between the relatives.
“He understands that who he is today is a combination of generations that have been passed down to him," said Milken.
Youngblood’s family first heard about the contentious plot of land around 2011, when ConocoPhillips told some family members they co-owned a tract about 60 miles southeast of San Antonio and inquired about leasing land from them.
Since then, Youngblood has been waging a protracted legal battle to establish shared ownership of the land with the Korths—an effort he says could prove lucrative for his extended family and is rooted in a desire to recognize the Eckfords’ land ownership and pass it down to subsequent generations.
Louis Eckford, a former slave and Youngblood’s great-great-grandfather, acquired the property in Karnes County in the 1880s. Half of it passed on to his wife, Eliza, and the other half to their nine children when Eckford died in 1896.
After Eliza’s death, Fritz Korth, the patriarch of the ranching family, acquired her interest in the property as repayment for a $300 loan Eliza had taken from him, backed by a deed of trust on the land. Korth’s descendants say he bought her children’s share, too, which the Eckfords dispute.
Over generations, the Korth family prospered. One of Fritz’s sons, Fred, became a bank president in Fort Worth, served as secretary of the Navy in the Kennedy administration and counted Lyndon B. Johnson and Harry Truman as friends. The land in Karnes County is where the Korths spent their summers, learned to ride horses and today run a cattle operation of about 200 head.
Around 2008, landmen showed up to sign leases for oil companies. Drillers were deploying new techniques to siphon out crude from the ground and set their sights on the Eagle Ford shale, which traverses Karnes County.
ConocoPhillips acquired leases with the Korths and signed leases with some of the Eckford heirs, and drilling rigs soon dotted the land. But the Korths subsequently argued in court they owned the tract outright—including the part left to the children—saying Eliza had deeded her family’s entire interest in the land and the Korths had maintained the property for decades while the Eckfords never claimed ownership.
ConocoPhillips, via a subsidiary, eventually sided with the Korths. If the Korths won, Youngblood and his family would be cut off from any royalties. Some of the Eckford heirs separately settled with the Korths.
The Korths are also a defendant in Youngblood’s lawsuit against ConocoPhillips, along with a mineral rights company called West 17th Resources. A lawyer for West 17th Resources didn’t respond to a request for comment.
“It seems very straightforward that if you pay taxes, and you’re operating the land and you have a deed that stipulates that you are the owner of the land, then it’s yours," said Chico Korth, Fritz Korth’s 57-year-old great-grandson and a managing director at investment firm Recurring Capital Partners.
The Eckford heirs say that despite the Korths’ investment in the land, the heirs never ceded their ownership of it.
Oran Grundy, a 65-year-old retired FedEx employee and a distant cousin of Youngblood, struggled after one of his sons was murdered in California two decades ago, and another died two years ago at 15 after suffering from birth defects. A legal victory, he hopes, would allow him to buttress the finances of his five remaining children.
“My life has really been like, chaotic," he said. “If this happens I’m just glad that I can do something for my children."
Youngblood has become fixated on the case. When representing the heirs became a full-time job for Stella Marks, a cousin and a lawyer by training, he started providing financial support. Youngblood met with celebrity lawyer Alex Spiro, who counts Elon Musk and Jay-Z as clients, but his family ultimately opted for a Houston firm to work alongside Marks.
From the fourth-floor office of a columned office building in Dallas, Youngblood calls, emails and WhatsApps about half a dozen relatives about the lawsuit—a practice he continues during personal and work trips to places such as Indonesia or Dubai.
His office is just across from real-estate magnate Harlan Crow’s. After George Floyd’s murder in 2020, he met with Crow, an influential Republican donor, for a public conversation about race in the wood-paneled debate chamber at Old Parkland, Crow’s office complex.
“Whatever he does is going to be based on integrity and principle," Crow said in an interview.
The Eckford heirs’ legal strategy has trod carefully on the subject of race, Youngblood said. In court, facing a white and Hispanic jury, the Youngblood family’s lawyers focused on the paper trail of the land’s ownership. The jury found Youngblood’s family and the Korths were co-owners of the land.
“We’re not here to relitigate the Civil War," Youngblood said.
His family hopes his lawsuit against ConocoPhillips will unlock at least $900 million in damages, which his lawyer said would include unpaid royalties, lawyer fees and punitive damages. This money, Youngblood said, would benefit present and future generations in his family.
“Regardless of the judgment, it’s not going to change my life," he said. “But for many of my relatives it could be transformative."
Write to Benoît Morenne at benoit.morenne@wsj.com
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