Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
We are struggling with the assignment to FRUS - judge doesn't appear to be keen on our argument
Zaza and Steve both present
Thanks The Gambler. Exhibits A-D look very interesting
Sums this share up!!!
No - says waiting for host to start meeting.
IN THE GRAND COURT OF THE CAYMAN ISLANDS FINANCIAL SERVICES DIVISION
FSD CAUSE NO. 317 OF 2020 (IKJ) IN THE MATTER OF THE COMPANIES ACT (2021 REVISION)
AND IN THE MATTER OF FRONTERA RESOURCES GEORGIA CORPORATION (IN OFFICIAL LIQUIDATION)
_________________
ORDER
_________________
UPON determining that the Summons dated 11 March 2021 is suitable for determination on the papers;
AND UPON reading the Fourth and Fifth Affidavits of David Griffin sworn 11 March 2021 and the exhibits thereof;
AND UPON reading the First Affidavit of Giorgi Kishmaria sworn on 17 March 2021 and the exhibits thereof;
AND UPON reading the First Affidavit of Otar Urushadze sworn on 19 March 2021 and the exhibits thereof
IT IS ORDERED that:
1. The JOLs be granted sanction to:
(i) assign any and all interests, right and liabilities that FRGC has in an area known as Block XII in the Republic of Georgia entered by and between FRGC, the Georgian Oil and Gas Corporation and the LEPL State Agency of Oil and Gas (together, the “Georgian Government”) on 25 June 1997 as amended (the “PSC”) to Green Capital LLC (“Green Capital”) on substantially the same terms as its offer of 19 March 2021, or in the event that Green Capital do not provide evidence of the transfer to the JOLs by 9am Cayman time on 20 March 2021 or the transfer of US$125,000 (the “Consideration”) to an account nominated by the
JOLs, and that the Consideration is received by the JOLs by 5pm on 23 March 2021, or the Georgian Government determine that Green Capital is not an appropriate assignee of the PSC then;
(ii) assign the PSC to Uniserve LLC on substantially the same terms as its offer of 4 March 2021 or invite the Georgian Government to terminate the PSC.
The Fifth Affidavit of David Griffin and the exhibits referred to in or relating to this application be sealed under O.24.6 of the Companies Winding Up Rules, 2018 and remain sealed until further order.
The costs of this application to be paid as an expense of the liquidation.
page3image1376827056
I did find the order by the Cayman court worrying:
“FRGC’s 50% interest in FEG was recently assigned to Green Capital, LLC (“Green Capital”) as part of a Cayman court-supervised liquidation process. A true and correct copy of the Cayman court order approving the assignment of FRGC’s interest to Green Capital is attached as Exhibit B. A true and correct copy of FEG’s current registration certificate, showing 50% ownership by Green Capital, is attached as Exhibit C. “
We have got a Cayman order approving the assignment to GC, a US TRO saying it isn’t and a Georgian court saying it is. There are conflicting judgments and that is going to add to the confusion and legal uncertainty when they come to be enforced. The reality is that the Georgian courts and GG are the kingmakers and that is the most crucial judgment of all.
ZM signed off the statement with a declaration that his statement is true under penalty of perjury – he should be a worried man. Not sure he can set foot in the US again
Some encouragement and some cause for concern when picking through the various documents.
Few headline points:
Good result and not unsurprising. I had a better feeling about this injunction then the injunction saga in the Cayman courts. The transparency of ZMs actions make it easier for the court to decide.
ZM bringing a claim in Texas on our behalf has backfired as he has effectively submitted to the jurisdiction of the US courts. Previously mentioned that it also opened him up to the claim by Mourant and they have now served his US attorneys.
The key was the letter signed by ZM on the assignment which effectively estopped him from making the transfer to GC. The judge said: “Frontera assigned operational control and ownership of its business in the country of Georgia to its wholly owned subsidiary Frontera Resources U.S. LLC ("“FRUS”") on April 13, 2020, and Mr. Mamulaishvili actually signed the assignment (the "“Assignment”") that consummated the transaction. This letter was signed by Mr. Mamulaishvili as President and CEO of FRGC, thus there is no doubt that Mr. Mamulaishvili was aware that this assignment occurred.
This finding was key: “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”. Absolutely crucial given ZM’s assertions that he had no family connection with GC. Once a judge realises he is being lied to then your credibility is gone and they will do everything they can to find against you. The judge added: “This included remaining as a director of FEG for illicit purposes despite his prior dismissal”. “Mr. Mamulaishvili purported to represent FRGC in the court proceedings, in collusion with Green Capital. Mr. Mamulaishvili knowingly misrepresented to the court that FRGC still had legal ownership and also agreed without objection to handing over the company’'s assets to his cousin at Green Capital” “As further evidence of his conspiracy to act in concert with Green Capital to convert Frontera assets, Mr. Mamulaishvili signed a joint statement on March 31, 2021, in which FRGC waived any right to appeal the decision”.
Para 10 is very interesting:
“10. On April 13, 2019, Frontera’'s wholly owned subsidiary, FRGC, assigned 100% of its ownership interest in FEG and all of the corresponding rights and obligations under the PSC to another of its wholly owned subsidiaries, Frontera Resources US, LLC ("“FRUS”"), as part of a corporate financing transaction between the two subsidiaries. The assignment was signed by Mr. Mamulaishvili and is attached to the Declaration of Steve Nicandros as Exhibit 1-B. This assignment was explicitly permitted pursuant to the provisions of the PSC.”
The last part is the first time I have seen any judicial recognition of this assignment being legal (ZM said the arbitration and GOGC said it wasn’t).
Who knows tsbs. The only thing we have to go on is the name of the applicant. Originally, I thought it may be our Georgian Lawyers but nothing came up for Iva Imnadze. The only person I could find in Tblisi with this same is involved in the construction of transmission OHL in Georgia. Didn't think that was interesting until you do some digging on that and it is something involving various ministires in Georgia, the EBRD and green energy. Just finding crumbs that's all.
file:///C:/Users/011199/Downloads/51422%20-%20Power%20Grid%20Enhancement%20Project%20Board%20Report%20(Final).pdf
https://www.tdworld.com/overhead-transmission/article/20963773/georgian-state-electrosystem-to-strengthen-transmission-grid
There has been a new entry on FEGL this morning. Not much to go on but this is it (there may be something in the other docs but havent had time to look yet)
Announcement # 2056116
Registration number B21038559
Type of service Preparation of an extract from the register of entrepreneurs and non-entrepreneurial legal entities
The cost of the service is 40 + 20 GEL on the day of submitting the application
Amount to be paid / balance 60 GEL / 0 GEL
Payments
Amount Bank Receipt # Date
Paid 60 GEL Bank of Georgia D6428489C68830288DCC973F13010569 15.04.2021 11:30:46
Debt 0 GEL
Identification number 204905674
The name of the subject is Frontera Eastern Georgia Ltd.
Legal form Limited Liability Company
Type of reorganization
Quantity
Replacement requisites:
Applicant Iva Imnadze (P / N: 01008003153)
Representative
Representative
Attached documentation
Additionally presented
Extract from the register of entrepreneurial and non-entrepreneurial legal entities
Translation (excerpt)
Note
Thanks The Gambler. I mentioned in a previous post that it was strange that Zaza was contesting the Arbitration as it opened him up to service in all the other claims he is trying to evade service on. What is clear is that Steve is supporting service against Zaza as he doesn't want to be left holding all of the baby (joint and several liability). Also shows that they are still at war with each other. On that basis the transfer to Green Capital does not appear to me something that has Steve or the new boards blessing given Zazas retained title.. It's a move solely by Zaza in my view and muddies the water further (if that was ever possible).
New doubts over Russia’s Nord Stream 2 gas pipeline to Europe
The £9 billion Nord Stream 2 pipeline is opposed by other western nations
Oliver Moody, Berlin
Wednesday February 24 2021, 12.01am, The Times
The future of a Russian gas pipeline running into the heart of Europe is in question after 18 companies pulled out of the project in the face of American sanctions.
The £9 billion Nord Stream 2, which would double the amount of gas taken from Russia to Germany beneath the Baltic Sea, is opposed by a broad alliance of western nations including the US, Britain, France and Poland.
President Biden has so far refrained from punishing the German companies involved but the US State Department revealed yesterday that those supplying much of the financial and technical support had been frightened off.
https://www.thetimes.co.uk/article/new-doubts-over-russias-nord-stream-2-gas-pipeline-to-europe-zmttf3pwh
Thanks Star
Thanks Star - that's interesting. Choice of venue is important - the aim is to put your opponent in the forum they least want to be in. The big advantage of arbitration is the confidentially it brings. Frontera naturally want that - seem a bit desperate for it - wonder why? Zaza keen for it be played out in public - wonder why? Even stranger given the allegations of fraudulent conduct -on both sides.
The way Zaza (probably deliberately) framed the claim in terms of a derivative action appears to take it out of the employment arbitration clause. I haven't seen the clause but it's what I would have done to get around it and seems like a runner.
Thanks Looed
Thanks Looed. I couldn't open those files and I think I mentioned this in my first post as no matter what device I tried it just wouldn't open. I did think they were relevant to the transfer hence asking if anyone else can could have a look to see if there was anything substantial. I just managed to access the supferficial docs as it were which provided bare details of the application and decision.. Any further help anyone can give greatly appreciated.
Thanks again for following up Looed- further detail you are uncovering is invaluable.
I posted on the new entry for Frontera Eastern Georgia on 11 Feb on the Georgian equivalent of Companies House. I mentioned it was for a change of partner. Another document was added yesterday providing further detail on the change in partner application (which has been refused) as follows:
1.2. The registration application NB19044710 indicated by the applicant was submitted to the Agency on 16 April 2019. The statement called for a change of partner of Frontera Eastern Georgia Ltd. (Identification Number 204905674), in particular, a partner holding 50% of the company, Frontera Resources Georgia Corporation (Identification Number CR 72227, USA) U.S. In favor of e-mail.
1.3. Regarding the registration proceedings NB19044710, decisions NB19044710 / 3 (17/04/2019) and NB19044710 / 5 (17/05/2019) on the suspension of the registration proceedings were made, as well as written notifications on the non-renewal of the registration proceedings, which were sent to the interested person Regarding the documents. Since the mentioned documents were not submitted to the Agency, the registration proceedings were terminated by the decision NB19044710 / 8 of June 18, 2019
1.4. Written notice on non-renewal of registration proceedings No. B19044710 / 7 (17.06.2019) and decision No. B19044710 / 8 (18.06.2019) on termination of registration proceedings on the decision of Frontera Resources USLS and Frontera Resources Georgia Corporation Complained by the representative with administrative complaint N322308 / 17. In this regard, Decision N 322798 "On Refusal to Satisfy the Administrative Complaint" was made.
There has been an update on the Georgian equivalent of Companies House for Frontera Eastern Georgia Ltd today. It is an application made by FRR’s Georgia Lawyers BLB (see below). I’ve accessed two of the three docs (translation below) but there is a third doc my computer will not allow me to access and that may contain details of the change of partner. Someone else might have more luck.
Application acceptance card The National Agency of Public Registry has received an application (applicant: Ana Rekhviashvili / 01024057714 /) requesting registration of a change in the registered data of the entity. Legal form: Limited Liability Company Name: Frontera Eastern Georgia Ltd. Identification code: 204905674 Attached documentation: Registration documents See Application B19044710 Proxy See Application B21001276
Identification number 204905674 The name of the subject is Frontera Eastern Georgia Ltd. Legal form Limited Liability Company Type of reorganization Quantity Replacement requisites: Change of partner Applicant Ana Rekhviashvili (P / N: 01024057714) Tbilisi Petre Bagrationi st. N 29 Representative Representative Attached documentation Registration documents See Application B19044710 Proxy See Application B21001276 Additionally presented Extract from the register of entrepreneurial and non-entrepreneurial legal entities
PEARL MEYER AND PARTNERS, LLC v. FRONTERA RESOURCES HOLDINGS, LLC
Case Summary
On 10/06/2020 PEARL MEYER AND PARTNERS, LLC filed a Contract - Other Contract lawsuit against FRONTERA RESOURCES HOLDINGS, LLC. This case was filed in New York County Courts, Supreme Court Civil Term located in Washington, New York. The case status is Pending - Other Pending.
https://unicourt.com/case/ny-sue1-pearl-meyer-and-partners-llc-v-frontera-resources-holdings-llc-1237819
Interesting that we instructed an executive remuneration company. It's probably another unpaid invoice but if anyone has access to the docs would be good to see what it was about. Thanks
I'm losing track of all the court cases but the one thing I do find really peculiar is Zaza fronting up. As I understand it, the sizeable personal claim against him under the guarantees has stalled because no one can locate him in order for him to be served. That can be a useful strategy if you are based outside the jurisdiction as it frustrates the hell out of the opposing side. He now turns up with lawyers for a claim in which he does not personally benefit but potentially opens him up to being served in a sizeable personal claim against him. Why do that?