Member Info for Njames

ZZ, right, so they forfeit the claim plus pay another $125K, meaning about $6 million in total for an asset supposedly worth billions. They either got the bargain of the century or ...

I don't think the 5% ever was consummated; it was supposed to be consideration for transfer of the PSA and 50% interest in FEGL to FRUS. The Georgian govt objected to the transfer to FRUS, and their position was upheld by the arbitration panel. So the asset never transferred from FRGC to FRUS, hence the 5% was never left in FRGC. SN/Company are still asserting that the transfer to FRUS was not recognized due to an administrative oversight in the Georgian registry, but I think this position will not stand up. The arbitration ruling is pretty clear the transfer was invalid.

Unclear. FTI likely have an accounting. Probably for legal, arbitrator and professional fees in the arbitration, which approached $3MM, maybe some for the drilling program.

ZZ, that's an interesting point. Was it a strategic error on Hope's//FTI's part or was it inevitable once the whole structure started being unraveled? You always want to have your security closest to the asset and in this case Green maybe had a secured claim against FRGC.

Agree, Starrage, but maybe they need each other so a compromise is possible. Outrider needs the company’s connections and influence in the USA and Georgia, and the company needs Outrider to negotiate a settlement of the debt, perhaps for equity.

Looks like "Movants" is defined as SN plus Outrider. So they are jointly petitioning the court for the scheduling change and say they need adequate time to complete settlement talks. Wouldn't that be an unexpected turn of events. Company and Outrider settle and jointly go after ZM, who appears to have outfoxed them all and grabbed the asset via Green Capital (allegedly).

The loan notes were issued by Frontera International, the security was the shares of Frontera Resources Caucasus, which in turn owned Frontera Resources Georgia. I believe all three are in liquidation. Maybe Easbern can confirm. The mystery to me is how Green ended up with the asset, not Outrider. Maybe some of the $5.8 million was still laying around and went to Outrider and the asset went to Green, or maybe ZM outfoxed Outrider as well. If the latter, that could explain why according to the court documents posted by Easbern for the California case, there seems to be renewed interest in settling between Outrider and the company. A united front against ZM/Green.

Or they could be spinning the story in their direction, as every party in litigation does. The Cayman side can't be ignored. The chain of ownership between the asset (which is held by FEGL) and Frontera Resources Corporation (FRC) was broken when Outrider took the shares of Frontera Resources Caucasus Corporation in the default and put it into liquidation. If what the company is alleging is true, then Green Capital/ZM are dirty and shouldn't be awarded the asset, and the Georgian govt has stopped the transfer for the time being. But the Cayman court order specifies that it be awarded to Green if the government approves, otherwise to Uniserve or turned back over to the government. So I'm not sure there's any way to get the asset back in the hands of Frontera Resources without going through the Caymans. And it seems that would still have to involve some sort of deal with Outrider, who are now owed the full amount of the loan notes plus interest.

Appreciate that we are only seeing part of the picture, and subject to each party's spin, but the actual Cayman court orders and the arbitration award say what they say, so need to be countered by other equally authoritative evidence.

As long as he's getting paid for his services, he will serve. Once those payments stop, he will withdraw, just like Akin Gump, Taylor English, Mourant, the group in California and all the ranks of stiffed lawyers that have gone before.

As you've mentioned before, the decision to allow the loan notes held by Outrider to go into default was terrible in hindsight. One that could have been cured and bought at least another year by handing over a few million shares from SN and ZM to Outrider, and which would not have affected the balance of power among equity holders. Their rage and fury against Hope blinded them and unleashed a cascade of events that ended in disaster. The fiduciary case against Hope was weak sauce and resulted in revelations that caused departure of the Nomad, delisting, etc.

Moreover, if you read the arbitration ruling, the panel ultimately concluded that no discoveries had been made and no commercial feasibility established outside the Soviet era "exploitation area," which is the 1% they were allowed to retain. Looking at the amount of money the GOGC spent on the arbitration and their actions post-ruling of trying to get the whole thing back by declaring material breach, it seems to me the Georgians tired of the 20-year lack of success and constant financial problems and wanted them out, by any means. It appears they may have the chance of getting the remainder back, as they've now gotten in the middle of the purported transfer of FEGL to Green Capital.

Seems to me the most viable causes of action for AIM investors would be:

1. Against the NOMAD Cairn for its failures in properly regulating disclosure in the months and years leading up to delisting. The misleading disclosures about drilling results and failures to fully disclose the terms of the lending documents (specifically interest) with Outrider could be actionable. They would probably in turn blame the directors and try to suck them into any lawsuit, because ultimately the directors are responsible and the NOMAD is susceptible to lies and withholding of information by the directors. Cairn at least is present in the UK and has assets.
2. Against the directors or the company for defrauding investors through false or misleading disclosures. However, none of them have a presence in the UK or assets in the UK (or in the case of Frontera, any assets at all).

Not all the $500 million was through AIM. Some was private placements of loan notes, to investors in the UK US and Greece. The number reflects the investments in operations in Georgia.

Everyone should have a read of the Arbitration Award filed as Exhibit E to "Counter-Defendant Zaza Mumulaishvili's Objections to the Second Amended Declaration of Steve Nicandros." It is a sad and sordid tale of incompetence and poor results over many years. With respect to the claims of massive resources, there are two expert reports by Gaffney Cline produced by the GOGC that post date anything done by Frontera, 2018 and 2019. Although not attached to the award document, it would sure be interesting to see what those had to say. Also very interesting and depressing is the fact that by the time of the evidentiary hearing in 2020, Frontera was completely without counsel, having had two law firms resign and then Levan resign. Moreover, ZM and SN declined to appear at the evidentiary hearing and said none of the expert witnesses could appear at the hearing. Therefore, at an evidentiary hearing to decide the fate of a large block supposedly containing massive resources in which $400-$500 million had been invested, they could not even muster the wherewithal to appear or hire counsel. So all of GOGC's witnesses and statements went uncontradicted. An absolute travesty.

I seem to remember in one of the interviews posted on here last Fall that ZM claimed to be the "largest creditor" and alternately that Outrider would have a significant role to play going forward after the restructuring. So it may be the $5.8 million and Green Capital are linked to them somehow. He also claimed that he still had a role in FEGL and FRGC even after his dismissal from FRC, which while technically true, he failed to mention that it was being delinked from FRC in the liquidation process. He also failed to mention that the "restructuring" was removing the asset from the FRC umbrella. Were FRC completely unaware of all this as suggested, to the point of sending positive emails to some posters about the restructuring process and the future? Again, what a mess.

One of the statements in SN's papers is completely disingenuous--that for reasons unbeknownst to Frontera, the transfer of the PSC interest from FRGC to FRUS did not go through, and that an administrative error left the interest in the hands of FRGC. The reason it didn't go through is the arbitration panel ruled it was in violation of the PSC. ZM says so in his declaration and attaches a copy of the arbitration award highlighting where it says so. The Cayman documents purporting to show the interest being awarded to Green Capital in liquidation can't be opened to verify ZM's statement, but assume it's likely true. This doesn't mean ZM has clean hands. If his family owns Green Capital, and he was GM of FRGC and FEGL, then he's responsible for the default by FRGC of the contract with Green Capital and now he's benefitting from that default. What a mess.

The attached arbitration award is the same one that got posted on here a year ago and was removed after the poster was shouted down by other posters.

There's a host of new documents filed since Friday. In particular, an amended counterclaim of Frontera seeking an injunction against ZM states the following:

4. Just recently, in April of 2021, Frontera has discovered that Mr. Mamulaishvili is
using Frontera's brand to operate shadow unauthorized companies (the "Fake Frontera
Companies") that he created and orchestrated to be owned by his family members to conduct
business associated with Frontera's holdings out of the view of Frontera's board of directors. He
has clandestinely and illegally moved all of Frontera's assets in Georgia to one of the Fake
Frontera Companies in the country of Georgia, Green Capital, LLC, which is also family owned,
in order to hijack and steal all of Frontera's assets.

5. In particular, Green Capital, LLC, is 100% owned by Mr. Mamulaishvili's cousin
and operated with the help of other family members, including his son and daughter. Mr.
Mamulaishvili is in the process of seizing Frontera's assets in Georgia and registering Green
Capital as the owner of Frontera's holdings despite the Company having invested hundreds of
millions of dollars in these holdings. Frontera has no adequate remedy at law as Mr.
Mamulaishvili is unable to respond in damages, and has transferred all of his assets out of Texas
and the U.S. See, Exhibit 1, Declaration of Steve Nicandros at paras. 14-16. Unless enjoined
immediately, Frontera will lose everything through Mr. Mamulaishvili's ongoing actions which
constitute conversion and also are in violation of his covenant not to compete.

Typical. Would have expected nothing less from the great dilatator.

They say nothing because they have nothing but embarrassing developments.

Phil, a lot of the subsidiary companies were liquidated, but not FRC.

Frontera Resources Corporation, the entity in which the (formerly) public shareholders hold shares, is still a Cayman entity. So any action or requirement for a shareholder meeting needs to be analyzed in terms of Cayman law and the existing Articles of Association. Those used to be posted on their website when they were listed. Mole or someone has a copy, as they've been referred to from time to time on this board.