Member Info for Njames

Here come da judge

Don’t see SN yet or the judge. Ballard and Gibson both there as well as Frost and ZM.

The present hearing is over an injunction to stop ZM from allegedly competing against Frontera by among other things attempting to take over the Georgian assets via the Green transaction. That's how Green becomes important. The injunction made its way into this court via a complicated path:

1. Frontera finds out about ZM's conduct in 2020 and removes him as a director and CEO.
2. Frontera after further investigation, terminates his employment in January 2021 and initiates an arbitration against him under the employment agreement. That agreement contains a mandatory arbitration clause, but also says an injunction may be obtained to prevent competition in violation of the agreement in any court having jurisdiction.
3. A week later, ZM files the derivative suit in Texas state court on behalf of the company against the other directors accusing them of breach of fiduciary duty, etc. in connection with covid loans, lobbying payments, etc.
4. Frontera responds by saying this suit needs to be in arbitration because it's really about the employment contract.
5. Court disagrees, let's suit continue, Frontera appeals.
6. Meantime, ZM, who otherwise arguably would not be within the jurisdiction of any US court, made an apparent blunder by availing himself of the Texas courts in his derivative suit and thus subjected himself to its jurisdiction, and the company took advantage by bringing this action to enjoin him from his conduct in violation of the non-competition clause of the employment agreement. So the current hearing is really not even about derivative suit, but about the employment contract.
7. If the judge decides in favor of Frontera, it stops ZM from taking any actions in connection with Frontera, Frontera's (former) assets, causing them to be transferred to Green, etc. ZM's counter argument is that Frontera doesn't own these assets, they've been in control of FTI since 2019 or certainly April 2020 when the arbitration panel denied the validity of the FRUS transfer. So they have no interests in the country of Georgia to enjoin him from competing against. If the judge decides in favor of ZM, then he is free and clear to continue whatever he's doing (subject to any appeal).
8. Once this injunction is decided, we go back to the derivative suit and SN's defense against it, the appeal to compel this suit to be moved to arbitration under the employment contract (which I think will lose), and the actual arbitration of the employment contract, which will disappear out of the public eye.
9. Our window into what's going on opened wide by a happy confluence of circumstances and legal maneuverings, such that all this dramatic testimony and documents being filed are coming fast and furious, rather than dragging out for months or being hidden in arbitration.
10. The most conservative view, and the one I think the judge may take, is to enjoin ZM, and then everything gets sorted out in a full trial on the merits on the emplymnt contr

Good point on family. Not proven yet except by sworn testimony, which ZM may deny under oath. On Green, we didn't know, but perhaps Cairn found out? Just speculating. But the non disclosure of the interest was likely enough. Someone posted on here that a Cairn person told them FRR were always a difficult client. Maybe it was Dulwichman.

We now thanks to these proceedings have become aware of at least two additional matters (the first being the requirement to pay cash interest to Hope) that were not disclosed in accordance with AIM rules:
1. The entry into the original Green agreement in April 2018. While an oil sale contract is arguably ordinary course, in this case it was the single source of continuing financing for the company and therefore highly material. It was also a related party transaction involving ZM family and would have been required to be approved by the Nomad and that fact disclosed. Perhaps that's why it was kept hidden, and was one of the reasons for Cairn's resignation, or perhaps ZM kept it to himself. Maybe we will get more insight on cross examination of ZM today.
2. In October 2018 when the entire assets of the company were mortgaged for an additional $5mm (in reality, $800K), and again to Green, a related party, that was also even more material and required approval by the Nomad and disclosure. Kept hidden by the BOD, or by ZM? SN denies he knew about 2, we don't know about 1 because the feed was cut off.

Seems like the BOD, and certainly ZM, would have some legal jeopardy due to failures to disclose (fraud) and violation of AIM rules. Private investors may have a case in the UK, although enforcing any judgment would be challenging.

Perhaps as some have speculated, RR is ZZ. Come to think of it, we've never seen them together at the same time.

FRR were still listed then. This should have been RNS'd immediately. Mortgaged all the assets of the company for "up to" an additional $5 million. $5 million was already able to be advanced unsecured. Green claimed $5.8 million was owed in the liquidation. So they in effect got what's left of Block 12 for $800,000. And SN disputes they ever paid anything.

Looed it's the Green sale contract with addendum 1 and 2. It's been filed before but filed again within the last day or two. Mole wanted date of addendum #2.

Re Green 2nd amendment, I believe it was October 2018. The site is down now so will check later and verify.

I don't recall the exhibit but it was newly filed and it was titled Statement of Claim. It is the actual claim they originally filed for arbitration of the employment agreement, before it got sucked into court via ZM's derivative claim and FRC seeking an injunction. I think a version of the same info was in an earlier doc but I didn't recall it in this much detail naming parties and such before.

The judge denied the motion in open court Friday. There is an unsigned order that has now been filed.

Motion to dismiss Ballard denied.

Check out the details of the backstory of ZM torpedoing potential financing in 2019 from the statement of claim in the arbitration against ZM. Frontera had allegedly engaged Evercore to seek financing. SN testified to some of this but here are more details:

13. As FRC sought to continue its investment programs amidst challenges from
the government of Georgia, in the summer of 2019, FRC engaged the investment bank
Evercore in Houston to assist in raising new capital. As part of this effort, Mr.
Nicandros, as Chairman of the Board, initiated a strategic relationship with a company
called ShaMaran Petroleum Corp (ShaMaran), a subsidiary of the giant Lundin Group.
Mr. Mamulaishvili was asked to coordinate with ShaMaran and assist in building a
potential partnership so FRC could arrange new/further third-party financing.
Inexplicably, Mr. Mamulaishvili resisted evolving such a potential partnership in favor of
an alternative agenda not revealed to Mr. Nicandros or FRC’s board.
14. In approximately November 2019, FRC was advancing discussions with
ShaMaran to make a major investment in the Company. Representatives of ShaMaran
were scheduled to travel to Georgia to conduct due diligence of FRC before committing
to invest money in the company. On the eve of their visit, Mr. Mamulaishvili cancelled
their trip without consulting FRC board members, also making it impossible for FRC’s
Chairman to make the trip as he had assured ShaMaran’s management he would do.
Although Mr. Mamulaishvili finally met with representatives of ShaMaran in December
2019, he created significant frustration with their representatives and did not respond to
their discreet requests for information they needed in order to conduct their due diligence.
Instead, he enacted delays and made it difficult for ShaMaran to conduct due diligence.
For example, he instructed FRC’s former General Counsel to informally provide them
with a data dump of approximately 6,000 documents in a flash drive. While on the
ground, ShaMaran’s representatives were left to tour field operations without Mr.
Mamulaishvili present. All in all, this made for a poor experience for potential investors
and communicated dysfunction within the Company.
15. As a result of what ShaMaran and its representatives were experiencing, Dr.
Adel Chaouch, the CEO of ShaMaran, and members of his team, as well as the lead
representative from Evercore, communicated with Mr. Nicandros and advised that Mr.
Mamulaishvili was standing in the way of a transaction with FRC and this would likely
kill their interest in FRC. When Mr. Nicandros consulted with Mr. Mamulaishvili in an
effort to advance things for FRC, Mr. Mamulaishvili insisted that Mr. Nicandros back off
of communications with Dr. Chaouch. This dysfunctional behavior was apparent to
ShaMaran and they ultimately backed away from working with FRC. A major
opportunity was lo

Steve denied they ever received any money from Green, and also denied he knew about the 2nd amendment that added the security interest in PSA and FEGL shares in exchange for raising the loan amount from $5mm to $10mm. Said he would not have approved it had he known. Don't know if he denied knowing about the original agreement. Didn't hear that part.

I think that's just s different form of the address because the Georgian govt has sent some emails to SN at a similar address. Why the company didn't cancel all ZM Frontera email addresses is an oversight.

This is pretty damning to ZM. It removes him as director of FRGC as of December 2020, yet he still purported to represent FRGC in the 21 minute court proceeding giving the assets to Green.

Not sure it's a good idea to show financial statements showing an insolvent company while claiming its worth "billions" or "$500 million."

Judge looks bored

back on

Re Sycric: you've captured the issue, but don't think a US judge can overturn the Georgian agency's determination. Frontera would have to challenge that non-registration in Georgia and the state's non-consent under the PSC in arbitration. The panel ruled against them on the first attempt, but the second attempt after submission of additional proof of operational and financial capability was never arbitrated. At the end of day, Frontera might win on getting an injunction against ZM pending the trial, but any reversal of the refusal to register the assignment can't be done from this court.

Paying Bryce 1000 per hour to glower at the screen.

You can see exactly what's coming. SN won't admit that he was "concerned" about Outrider's move to liquidate the Cayman companies including FRGC, but she's going to introduce evidence from California case to show he was and then try to tie that to the hurried attempted assignment to FRUS ahead of the liquidators.