Member Info for Njames

Interesting use of the word "fracking," since he means to ban it.

Haynes & Boone joined the YA II vs. Frontera case in last week's flurry of filings, both in Houston and in London. Makes sense they are stepping in for some of the other cases as well.

Oopsi, I have not been able to access the UK documents directly, only when they are attached to the Texas court documents, so if you have a way of doing that under the case number provided, that could provide interesting information. Of note, the UK solicitors from Haynes Boone provided affidavits to the UK court supporting the set aside application and using that same case number.

All very interesting. At the time of the original suit and attempted service, the UK court stated that service could be effected either at the Houston HQ office on Post Oak Blvd. or at the registered office in Cayman. This was in late 2019 / early 2020. My guess is they attempted service at Post Oak, but no one was at the office, perhaps by design (this might have been about the time SN was staying in Georgia and participating in wine tasting events). YA then looked at Frontera's out of date secretary of state documents in Texas and found Jerry Bono was still listed as an officer, so served him. Why they never attempted to serve the registered office in Cayman (Maples?) is a mystery that Frontera mentions. Perhaps Frontera were already delinquent in paying their Cayman registered agents and thus service was refused. Or maybe YA were negligent.

The Motion to Stay Proceedings or Vacate Enforcement Order argues that in the original UK action, Frontera was not properly served according to the instructions of the UK court. Instead, "service" was purportedly effected on Jerry Bono, who at the time was a former employee/officer of Frontera and had no authority to receive service on Frontera's behalf. Since service was invalid, Frontera was denied the right to appear and defend itself in the UK. That is the basis on which the Application to Set Aside Judgement is being made in the UK, and Frontera argues that the proceedings to enforce the judgment in the US should be halted until the UK court either upholds the judgment or grants the application to set aside. In the UK, they are using solicitors affiliated with Haynes & Boone London office. It seems Frontera are now prepared to mount a full defense against YA in the UK, although the US filings don't reveal what the basis of that defense would be. UK solicitors don't work cheap, so another indication of significant resources now being devoted to this.

Earsbern, Linsenmayer is an ex-Haynes & Boone partner, so he's probably behind involving them. He's a corporate lawyer not a litigator.

Oopsi, the application to set aside was mentioned in their Texas court filing dated 5 November titled Response Motion To Compel and Omnibus Motion, but gave no new UK claim number. The Texas case cause number is 2020-34974. The original UK case number that went to default judgement is CL-2020-000010. They also filed a Motion to Stay Proceedings or Vacate Enforcement Order of 14 pages plus 147 pages of exhibits. If there's anything interesting in that, I'll post it after I've looked through it. Obvious influence of having Haynes & Boone on the team.

Yeah, or it could just be more stall tactics. But I found it interesting that after not defending the original suit in the UK thus saving legal fees and after low-budgeting the case in Texas for the last 6 months, they suddenly are trying to defend the UK suit and upgrading US counsel. Could be nothing. But SN has personally funded Frontera in past times of need, maybe there's a reason he does not see this as throwing good money after bad.

Frontera still fighting tooth and nail the recognition of the UK default judgment and post-judgment discovery by YA. Two interesting developments:
1. On 28 October, Frontera filed an Application with the High Court of Justice Queen’s Bench Division in the UK to set aside the default judgment, which they had never contested in the past, either the original claim or post-default.
2. They "up-armoured" their counsel by adding prominent Texas firm Haynes & Boone to the team, in addition to the solo-practitioner they've been using. The quality of their filings in terms of researched and in-depth argument seems to have increased markedly.

Query--Is the increased willingness of Frontera to devote meaningful resources to the fight an indication of confidence by SN of a positive outcome such that he's willing to commit personal funds or perhaps even evidence of a new backer that is funding the fight?

Starage, I see your point and that interpretation may be correct, but in the second paragraph they do refer to having taken action in response to the latest move from Outrider/Hope, so I assumed a new lawsuit for tortious interference. Who knows, nothing from these guys is straightforward or transparent.

After the thread started by Tenners called "Zaza comments on company changes," and then the article posted by Looed that basically reiterated the same, it sounded for certain that some sort of deal was in the works giving Outrider and management a stake in the ongoing business in exchange for the debt. That may have been torpedoed by Hopes gambit letter to GG, which Frontera have reacted strongly to, or it might all be brinksmanship.

A strange journey all around.

Says the lawsuit is "currently pending." Someone with a PACER account may be able to find it, since it's likely federal court. Should be interesting reading.

Hate to say it, but based on previous restructurings I've been involved with, sounds like the shareholders are about to be wiped out. Including SN and ZM. All the companies above FEGL are being struck or liquidated in the Caymans, including the entity in which shareholders own shares, FRC. Once a company is insolvent or in the "zone of insolvency" directors' fiduciary duties switch from the shareholders to the creditors (including Hope). Frontera has been insolvent or near insolvent for at least two years. There too many data points to conclude otherwise. So Hope and other creditors are probably getting equity in either FEGL or a new Holdco. If SN and ZM still had loans, those would be exchanged for equity as well, and they might put new money in to increase their holdings. The price of this survival was a deal with Hope, giving him a stake in exchange for the debt. Sometimes existing equity holders get a piece of the new pie, but the contempt with which holders have been treated for two years and the silence of the company says otherwise. Maybe there's enough there to continue forward viably for at least 7 years extracting from the 1%. Seems they would also try to extend this once the restructuring is complete and operations resume.

Shareholder recourse is an action against the directors of the company for false and misleading disclosures in the period leading up to the delisting which were in violation of AIM rules, maybe the Nomad as well. While the company may be gone, the D&O policy may still be answerable for this, otherwise ZM, SN and the other directors will have personal liability.

Someone should email Linsenmayer as well, as he seems to be handling overall legal matters in Houston, where SN resides when he's not fleeing justice.

The jury fee is pretty smallish, and a good delay strategy by SN. With Covid, jury trials in Harris County are being delayed and dockets are extremely backlogged. It could buy him another year.

In the Mourant v. Nicandros and YA v. Frontera cases in Texas, there's been several filings since 10/1. In the YA case, some filings by plaintiff issuing subpoenas to Jerry Bono and Frontera for depositions, and a long filing by Frontera lawyers arguing against recognition of the foreign judgment mostly on procedural grounds. The most interesting filing was the Nicandros First Amended Original Answer and Plea for Non-Recognition in the Mourant case, which contained the following:

7. Mourant’s judgment is the result of material, extrinsic fraud, which is sufficient unto itself to prevent recognition.
8. Mourant was retained by Frontera Resources Corporation (“Frontera”) to represent Frontera in litigation.
9. At a critical point in the midst of the litigation, Mourant approached Nicandros and Zaza Mamulaishvili (“Mamulaishvili”) with certain promises. One of Mourant’s promises was that if Nicandros and Mamulaishvili, two Directors of Frontera, would
personally guarantee Frontera’s engagement agreement with Mourant, that it would take no action adverse to Nicandros or Mamulaishvili and that it would aggressively pursue the existing litigation on behalf of Frontera.
10. Mourant’s representations to Nicandros, Mamulaishvili and Frontera were material and were made with the intent that Nicandros, Mamulaishvili and Frontera rely on those promises. Nicandros, Mamulaishvili and Frontera did rely on Mourant’s
agreements to their mutual and individual detriment.
11. Instead of continuing with the litigation on behalf of Frontera as promised, upon receipt of Nicandros and Mamulaishvili’s guaranties, Mourant effectively abandoned the litigation and sued Nicandros and Mamulaishvili in the same courts in which the corporate litigation was pending, thus compelling Nicandros and Mamulaishvili to take actions necessary to protect the corporation, but that were adverse to their personal interests.
12. Mourant’s unethical conduct in defrauding both its client Frontera and Nicandros and Mamulaishvili, including its actions against the interests of its client and its cause of action against the client’s Directors — Nicandros and Mamulaishvili
— is so egregious that it is repugnant to the public policy of Texas, justifying nonrecognition of its judgment.
13. The failure of the Cayman Islands to recognize the judgments of Texas courts will also preclude the recognition of the Mourant judgment by this court. TEX. CIV. PRAC. & REM. CODE §36A.004(c)(9).

I have access to the Texas Secretary of State database, which has all the filings for Texas domestic and foreign registered companies. Not surprisingly, Frontera are a bit delinquent on some of the filings, so the last annual information report filed for FRUS was for filing year 2018, signed by Giorgi K. on 13 Nov 2018. Shows SN as chairman, ZM as CEO/director and LB as VP/Secretary. Mailing address shown as 1201 Louisiana Street Suite 2800. A search of that address shows it is the physical address of the Law Offices Of Janet S Northrup PC , Liverpool Ventures LLC, and Geltco LLC. The principal office address listed on the form is the Post Oak address. The registered agent is SN at the Post Oak address.

I suspect the different mailing address was to throw off process servers.

Interestingly, there is also a Frontera Resources Ukraine LLC, formed in 2015. For the ultimate parent company, FRC, the last filing is also for year 2018 and still lists Hope and Szescila as directors.

Still a lot of gamesmanship going on. They've had 3+ months to prepare a redacted version of the arbitration decision. Every published interview for the last two months he's being saying it will take two weeks to do this. If it supports what he's saying, do the redaction and put it out for everyone to see. The version that was leaked and posted on this board cast Frontera in a very poor light and I suspect that is more what he does not wish to be publicized.

Thought it odd as well that the amount was expressed in Rupees. A crore is an Indian unit meaning 10,000,000. So Rs 320 crore is 3.2 billion rupees = USD 42 million at current exchange rates.

Hogan Lovells is a large international law firm with 1000s of clients. While in court, they would say anything to aggressively advocate their client's position and throw dirt on the opponent's position, now that there's been a ruling, they are not going to say anything that's demonstrably false, given that there's a written opinion, even if not public. I would still expect them to spin the ruling in the most positive way for their client, perhaps omit something positive for FRR, but they aren't going to make a false public statement.

This would seem to indicate that the land area encompassing Mtsarekhevi, Baida, Taribani, Mirzaani, Patara Shiraki & Nazarelebi would be the "Development Area" that FRR would be allowed to retain under the PSA based on what is known about the arbitration decision. Curious if any knows whether the claimed large gas resources are encompassed by any of these fields.