Texas Oil and Gas Lawyer Discusses Suit Againt ATP Oil and Gas Executives
Austin, TX (Law Firm Newswire) July 18, 2013 - Executives at the now-defunct ATP Oil & Gas Corp. have been accused of misrepresenting royalty interests by Macquarie Investments LLC, notes Austin, Texas oil and gas attorney, Gregory D. Jordan.
Macquarie Investments LLC, based in Sydney, Australia, filed a lawsuit against Albert Reese, Jr., the company's Chief Financial Officer, and T. Paul Bulmahn, the board chairman. Leland Tate, the President of ATP, and Keith Godwin, the Chief Accounting Officer, are also named in the suit. Macquarie claims that the ATP executives misrepresented the nature of a $110 million sale of royalty interests to Macquarie. ATP is now bankrupt and was auctioned off to lenders in May. According to the lawsuit, filed in U.S. District Court for the Southern District of Texas, the purchase was a “disguised” loan that breached the firm's agreements with lenders.
“The oil and gas industry generates disputes of all kinds,” said attorney Jordan. “Here, if Macquarie proves its case, damages could be significant. Just because the CFO and chairman worked for ATP does not mean they can escape all liability for their alleged individual acts. Fraud is a serious charge.”
According to the lawsuit, Macquarie was injured by fraudulent inducements and intentional misrepresentation on the part of ATP and its executives. The executives are accused of conspiring with ATP's law firms to fraudulently induce Macquarie to purchase the royalty interests by procuring knowingly false legal opinions regarding the nature of the sale. In the later bankruptcy case, the management team allegedly caused ATP to take the position that the sale of royalty interests was a disguised financing. Macquarie is seeking $32 million in damages and is demanding a jury trial.
Houston-based ATP filed for bankruptcy in 2012, blaming the Deepwater Horizon oil spill in 2010 and the moratorium on drilling in the Gulf of Mexico that followed. The bankruptcy case was filed in U.S. Bankruptcy Court for the Southern District of Texas in Houston.
ATP executives also face lawsuits from shareholders who claim that the company misrepresented the effects that the offshore drilling moratorium had on its revenue. According to a lawsuit filed by a New Orleans firefighters' pension fund, the company downplayed the effects of the moratorium to investors who purchased Senior Second Lien Exchange Notes in December 2010. The complaint states that ATP issued a false and misleading Registration Statement and violated agreements with its creditors.
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