BreitBurn Energy Partners L.P. said Monday that all litigation with Quicksilver Resources Inc. had been settled. As part of the settlement, BreitBurn’s two founders will step down from the board but retain top management roles.

Quicksilver, a Texas oil and gas company, accumulated a 40.4 percent stake in the Los Angeles oil and gas company as of June, and has been pushing for a larger role in the company.

BreitBurn agreed to pay Quicksilver $13 million and said it expects they money to be paid by insurance.

Hal Washburn will continue as BreitBurn chief executive, but former co-CEO Randy Breitenbach’s title will change to president. The board will no longer include any management directors. It now will consist of the four current independent directors, with Washburn and Breitenbach resigning from the board to make room for two new members to be nominated by Quicksilver.

In return, Quicksilver agreed to a “standstill” under which it will not seek any additional management role in BreitBurn. If Quicksilver’s ownership interest falls below a certain threshold, its directors will leave the board and the standstill agreement will end.

BreitBurn also announced that it will reinstate quarterly cash distributions at the rate of 37.5 cents per quarter, or $1.50 on an annualized basis, beginning with the distribution for the first quarter of 2010.

“Given the improved market conditions, our increased financial flexibility, and resolution of the Quicksilver litigation, we are pleased to be reinstating quarterly cash distributions,” Washburn said in a press release.

Shares jumped $1.50, or 11 percent, to $14.85 in midday trading on the Nasdaq.