The owners of a Galveston County oil and gas company have asked the courts to clarify the validity of terminated contractual agreements in a dispute with three out-of-state companies.
Cornucopia Oil and Gas Co. sued BGR Capital and Trade LLC, BA Securities LLC and Oakton Capital Partners Group in Galveston County District Court on Aug. 1. It is seeking a declaratory judgment regarding contracts signed on October 9, 2013, and April 15, 2014.
Cornucopia Oil and Gas is the owner of leases in the Kitchen Unit, 83,000 acres of submerged lands in Cook Inlet, Alaska.
According to the suit, the plaintiff signed an agreement with BGR Capital and BA Securities on Oct. 9, 2013, which allowed them to advise the plaintiff and approach investors for the Kitchen Unit project for six months.
The agreement included a monthly retainer of $10,000, and provided for a success fee to BA Securities if the investor introduced by BGR Capital does provide funding, according to the suit.
The defendants negotiated with a broker to find an investor - but negotiations with Wildcat Midstream Partners did not result in a financial transaction. Toward the end of the six month period, the plaintiff and defendants entered into an amendment that terminated the previous agreement, the suit states.
The amendment stipulated that the defendants would only earn a commission if the plaintiff closed a transaction with Wildcat by July 15, 2014. It also included an indemnification provision that defendant BGR would hold COG harmless against claims arising from the engagement letter and amendment. Negotiations failed to result in a financial transaction with Wildcat, according to the suit.
On July 15, the plaintiff closed a deal with another organization, one not listed in the amendment. The organization, Energy Capital Partners was not introduced to the plaintiff by the defendants. On July 25, defendant BGR demanded the 3 percent success fee, in an amount of $4,740,000, despite their failure to successfully negotiate a contract.
The plaintiff seeks a declaratory judgment that states the original engagement letter under which the defendant BGR has demanded payment has been terminated; that BGR Capital and BA Securities are not entitled to a success fee under the engagement letter; that BGR Capital, BA Securities and Oakton Capital are not entitled to a commission and that BGR Capital must indemnify, defend and hold harmless the plaintiff against claims. The plaintiff also seeks attorney's fees in a jury trial.
Cornucopia OIl and Gas Company is represented by Chris Reynolds and Laura Munion, of Reynolds Frizzell LLP, in Houston.
Galveston County District Court case 14-CV-0824
This is a report on a civil lawsuit filed at Galveston County District Court. The details in this report come from an original complaint filed by a plaintiff. Please note that a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt, and it represents only one side of the story.