Member Info for Njames

It will be good news for a couple of years. Longer term, the greenies and warmists are making significant gains in trying to phase out hydrocarbons, and the high prices will accelerate the demise. There will be lots of valuable resources that stay in the ground. As someone who loves this industry, I find that very sad and unnecessary. Full cycle energy inputs for mining, manufacturing and disposal that goes into batteries, solar panels, windmills and other alternatives, as well as buildout of the infrastructure to electrify everything, are never taken into account.

Some on here have the theory that the ZM v SN / BOD is just a ruse to run down the D&O policy. ZM has stated before that he's still involved. It's possible that while he was removed as a director of FRC, he remains a director of FEGL, the Georgian entity that holds the license and directly runs the operation.

Stay quiet, don't want to interfere with the court cases, err, arbitration, err, SM deal, err, restructuring with cash infusion, err, cashless debt for equity swap, err, management reshuffling ... or whatever is happening now.

I once invested and lost my a$$ in a project in which the founder had invested his entire net worth (he lives with his kids now). I thought no one would take that kind of risk unless they were absolutely certain of success. Wrong. There could be other reasons, including arrogance, pride, an "I'll show you" mentality, that keeps SN throwing his father's money into this thing. Or the resource could really be there. No one will know until a competent, well funded team takes over.

I know this is a controversial position around here, so flame away, but I don't think Hope is necessarily as bad as advertised. Is he a shark? Yes. He bought the bonds at a huge discount and leveraged that into a board position and putting the Company in default to try to make a buck. It was within his legal rights to do so under the terms of the various agreements. It happens all the time in corporate world. The company should have paid the bills to avoid the default or SN and ZM honored their personal guarantees to hand over some shares. He almost engineered a sale of the company, which I'm sure many now wish had happened given all the pain and suffering over the last few years, but that was scuppered by ZM and SN, who wanted to maintain control. He is blamed for blocking financing, but the only thing he blocked was ZM coming in a t a senior position to him. ZM was free to have junior debt or equity. Finally, according to emails in the Cayman case, he was the one always insisting on better governance , better info for the board, etc. What has now been further revealed in the recent court documents is that internal governance was abysmal. So maybe he was right. If the asset has any value, it would greatly benefit from a new team, IMO.

Both parties are historically economical with the truth. In this case, ZM appears to have been caught out. He states in the lawsuit he knew nothing about the PPP, SN produces text messages showing actually he did know.

Lan Bentsen and his father Lloyd were founders. Lloyd died in late 90s early 2000s. Lan left in 2010. LeBlanc was there in 2009-10 time frame. These are old names that are popping up. Seriously doubt the band is getting back together for no pay and uncertain prospects.

With illicit PPP funds.

Is there something showing Yukler as currently involved with Frontera? He was involved in the early days from late 90s into the 2000s, but by 2007/8 or so he was gone. Have they brought him back?

Highlights:
1. Deny there was anything unlawful about their PPP loan. Say ZM knew all about it.
2. Claim ZM blackmailed the company into making him CEO by threatening not to work for the company's success and to allow the company's business to fail (seriously? why not just fire him if that was the case?)
3. Blame ZM for creating tension on BOD and causing Andy Szescila and Hope's resignations from BOD.
4. Accuse ZM of torpedoing relationship with potential partner/financier introduced by SN during 2019.
5. Accuse ZM of diverting funds for personal account.
6. Accuses him of being complicit in theft of oil and equipment because he failed to aggressively pursue accused employees.
7. Accuses ZM and son of forming own companies in Frontera name to siphon business from the company, and which are producing and selling oil from the company's holdings.
8. Accuses ZM of using company funds for a house and car in Houston.
9. These matters are what the January 15 arbitration is about.
10. Removed from BOD on 8/28/20 and terminated for cause on 1/15/21.

My two cents:
1. Just as ZM's attorney is highly qualified and excellent reputation, so is SN and BOD's attorney, Laura Gibson of Dentons US LLP.
2. Appears more as if there was a falling out between ZM and SN, and we are witnessing the resulting grudge match all while the company is crumbling around their ears.

Defendant's answer filed along with a proposed order to compel arbitration. As expected, ZM has been accused of a host of misdeeds and wrongful acts (sorry RR). There is an action filed by the company against ZM that was referenced on this board a couple weeks ago I believe in a communication someone got from FRR. That is in fact an arbitration FRC filed an on January 15, 2021 with the AAA under Claim No. 01-21-0000-2118.

The motion to compel arbitration appears to be unfounded as it is based on ZM's employment agreement with the company, which has an arbitration clause. That clause only applies to disputes about the employment agreement or his employment with FRR, not any dispute in general, which his attorneys must also realize, so probably just a delay tactic.

Haven't finished reading yet. Anyone interested should have a look at the Harris District Clerk website. https://www.hcdistrictclerk.com/Edocs/Public/search.aspx

Fairly embarrassing when you consider they weren't paying anyone anyway, and had 2 employees at the FRR level, Zaza and his son.

No reply yet in the ZM deriviative case against SN and the board. But a California attorney has now been admitted by the court to represent ZM. Alexander Talarides is a licensed attorney in the State of California and is a partner at:
Orrick, Herrington & Sutcliffe LLP
405 Howard St.
San Francisco, CA 94105
Telephone: 415.773.4254
Email: atalarides@orrick.com

Cannot underscore this enough. If you want a seat at the table, have to make some noise. Relying on SN and ZM to have alignment of interests may be missing the bigger picture. SH's may be sold down the river while SN and ZM convert existing loans into new equity at the new money price, or SN (and pre dismissal ZM) might receive lucrative employment or consulting arrangements mitigating the blow of massive dilution. Non-BOD/mgmt SH's should organize to get a seat at the table.

Having looked over the court filings, including the texts and emails between ZM and SN, I have to believe a substantial part of the motivation for the suit is liability management. If indeed fraud was committed in applying for and receiving the PPP money, then that's criminal liability. ZM wants nothing to to with that, hence all the back and forth about SN wiring PPP money to ZM and his son, and ZM trying desperately to return it. I think ZM became such a thorn in the side of SN about the PPP and about the lobbyist money, that's why he was cut loose behind his back. Hence the other part of the motivation, pride and anger at being unceremoniously dumped after 25 years of service and personal investments. I think that's the Occam's Razor explanation for the suit. The theory about alignment with various pollical parties in Georgia seems a bit to Machiavellian, IMO.

SN and FRR may come back with a response that accuses ZM of all kinds of stuff as the reason for termination, so it will be interesting to see the story unfold. None of it seems like a recipe for a happy ending.

I seem to recall somewhere about 2013-15 timeframe they changed the Articles of Association of FRR to provide for an extremely low quorum requirement for the general meeting, which effectively meant a few large holders could approve fundamental changes. Not sure how they put new people on the Board without a shareholder vote, unless it was pursuant to some provision allowing the remaining Board members to appoint someone to fill vacancies until the next general meeting. Maybe another LTH recalls.

I suspect it's a strategic decision that they don't want to recognize the FSHG as a legitimate "group" : 1) liability management in the event the FSHG in spite of stated mandate were to become litigious; and 2) preserve control, lest the group band together and vote en bloc to oust the current directors or hold up other desired actions. Everything they've done vis a vis Hope since he entered the picture is to preserve control. Could have had a deal several years ago to sell the company give shareholders a return engineered by Hope but didn't want to give up control. It's a common theme, management reluctant to let go.

In any event that's my theory why they are responding to individual shareholders who provide proof of holdings but refuse to acknowledge the FSHG.

Suspect that if/when a restructuring is agreed, they will come current with Computershare and reinstate the register. Also establish at least a rudimentary website that has restructuring info, and then make a concerted effort to reach all shareholders with a proxy solicitation to vote in the general meeting on the restructuring.

I'd hate to be a plaintiff against Frontera. Some excerpts from the latest court papers filed by YA in advance of the Dec 10 hearing, showing the futility of attempted service:

3. On February 7, 2020, Plaintiff attempted to serve the UK Pleadings on Defendant at
3040 Post Oak Boulevard, Suite 1100, Houston, TX 77056. Upon arrival, the process server
observed that there was no business located at that address, and that a posting on the door indicated
that the tenant had been locked out due to unpaid rent. See Feb. 7, 2020 Declaration of Due
Diligence, attached hereto as Exhibit B
4. On February 18, 2020, Plaintiff attempted to serve the UK Pleadings on Zaza
Mamulaishvili, Defendant’s CEO, at 355 Tynebridge Lane, Houston, TX 77024. Upon arrival,
the process server was informed by a male occupant that Mr. Mamulaishvili formerly resided at
that address but no longer did so as of February 18, 2020. See Feb. 18, 2020 Declaration of Due
Diligence, attached hereto as Exhibit C.
5. On February 19, 2020, Plaintiff attempted to serve the UK Pleadings on Zaza
Mamulaishvili at 3102 Newcastle Drive, Houston, TX 77027. Upon arrival, the process server
found no one home at the address, and was informed by a neighbor that Mr. Mamulaishvili owns
the property but does not reside there. See February 19, 2020 Declaration of Due Diligence,
attached hereto as Exhibit D.
6. On March 2, 2020, the UK Pleadings were personally served upon Gerard Bono at
10819 Cranbrook Drive, Houston, Texas, 77042. See March 2, 2020 Return of Service, attached
hereto as Exhibit E. Per Plaintiff’s most recent Public Information Report, which is maintained by the Texas
Secretary of State and which Defendant is required to update on an annual basis pursuant to Tex.
Tax Code § 171.203, Mr. Bono is a Vice President of Frontera Resources Corporation, and
accordingly he was authorized to accept service pursuant to Tex. Bus. Org. Code § 5.255.2 See
Exhibit F.

Bono left employment of the company around the time Aro came onboard. Even thought the company did not update the Secretary of State information, I would think the fact that Bono was not actually employed there as a Vice President would be dispositive. But maybe not.

Thanks, can you also post the "generic email" they refer to as well as the info address?