Economic events cause shock waves as dramatic as earthquakes but the reverberations are not physical and they do not resound from epicenters by the laws of physics.
The North Dakota Bakken formation oil boom (and, when slowed, the bust for some players in the market) has predictably resulted in a litigation land rush for North Dakota and Minnesota lawyers (and also other jurisdictions, for sure).
In fact, even I, who could not until recently describe the difference between a flex rig from a lefty oil rig with hurricane disk, have found myself with a number of cases slicked with North Dakotan black gold (and none, incidentally, in any way resonating resinous with Acapulco gold, which has presumably produced a hilarious up-tick for famished lawyers in other states due to their own particular oil booms). Unfortunately, though, Minnesota Litigator policy prohibits any discussion of my own cases except in extraordinary circumstances with client pre-approval so I by-pass any details my own clients’ sticky situations.
When reverberations or waves are forever rather than ephemeral…
But certainly many of these Bakken-tied cases are coated with the same sticky patina of money-gushing deals in which one or more parties feel like they have lost in a frenetic high-stakes game of musical chairs — deals in which some have made out like bandits and others think (rightly or wrongly) that they are the bandits’ victims.
Gilberto NMN Garcia (“no middle name”), Todd G. Louis, and a related legal entity sued a handful of businesses and a couple of fellow humans (Jack Helms and Loren Unterseher) in U.S. District Court (D. Minn.) this past week in one of the many oil-caked cases that have been and will continue to generate barrels of barrister hours for at least a few years to come…
Formed in 2011, WCE Oil Field Services Inc. allegedly grew to $30 million in revenue in three years. (Complaint, Para. 13.) (Note that revenue ≠ profit and that the plains of economic booms are always littered with the carcasses of companies whose owners (or buyers) seem to have failed to appreciate the distinction.)
As often happens when people play musical chairs or hot potato build rapidly growing and (potentially or maybe only apparently) profitable companies, the business owners sought to sell and reap the benefits of their apparently successful endeavor; and others, buyers, of course, “want in.” But these transactions are almost inevitably complex, including things like current (uncertain) business valuations, related transactions (like personal guaranties or loans to the business being sold), back-end payments or payments over time (to insure against gross over-estimates or under-estimates of transaction value) and dependence on leverage (i.e., buying a company with borrowed money).
Garcia et al. v. Helms, Unterseher, et al. looks quite typical. As far as the sellers are concerned, the buyers promised to make certain payments in the sale and simply failed to hold up their end of the bargain. Now, Garcia and Louis are being sued in three other lawsuits because, they allege in essence that Helms and Unterseher ignored their vows to buy WCE Oil Field Services in slickness and in health.
This case appears to be like so many (too many) business litigation cases where the challenge might be getting light crude from a stone rather than any true dispute as to who owes what to whom. Time will tell.