Delos Shipping co-founder Brian Ladin has fired back at partner Richard Squires's fraud allegations against him, saying Squires' meddling with a $745m ethane newbuilding project collapsed Delos' pending deal with China's Zhejiang Satellite Petrochemical (STL).
Ladin's charge comes in a countersuit in Texas state court in which he defends himself from Squires' allegations that he diverted some $4m from Delos accounts for his own purposes.
Ladin denies those charges and says Squires reneged on promises to compensate him with management fees related to various special-purpose vessel companies Delos had launched, instead stripping the entities of dividends or distributions to shareholders: primarily Squires and his friends.
Ladin adds that Squires pressured him to invest personally in the various ventures, offering to personally lend Ladin hundreds of thousands of dollars that was to be repaid through the management fees that never came.
The Delos executive further denies that he acted improperly to freeze Squires out of other shipping investments such as the STL project, saying he and Squires had an understanding that they would collaborate on some ventures and pursue others independently.
Having been labeled a "scam artist" in Squires' complaint with a Dallas court, Ladin through his attorneys had some choice words for their adversary as well.
"But Squires could not help himself," Ladin's attorney, Jason Davis of San Antonio firm Davis & Santos writes.
"His ego could not tolerate working with another man – let alone a younger and more dynamic man like Ladin – on anything resembling equal terms. He instead attempted to gain financial leverage and control over Ladin and his business prospects."
Squires withheld $2.4m in management fees from Delos and used his majority control of the special-purpose entities to pay $3.7m in distributions, nearly half of those alleged to have gone to Squires.
"Ladin, as a minority shareholder, received less than 10% of what the SPEs distributed to Squires. Squires’ bait-and-switch not only breached his agreement with Ladin and violated fiduciary duties owed to both Ladin and Delos Shipping, it tied a financial noose around Ladin’s neck," the counterclaim maintains.
Like Squires, Ladin is seeking damages and court costs in his claim.
As TradeWinds has reported, Delos originally ordered six 93,000-cbm ships last July for long-term charters to STL, three from Hyundai Heavy Industries and three from Samsung Heavy Industries, for about $123m each. However, despite revival attempts, the deal collapsed due to financing problems.
STL went on to sign new orders with Samsung for three 98,000-cbm VLECs at its base in Jiaxing, near Shanghai. A week earlier, it inked a similar deal with HHI.
Interestingly, Ladin's counterclaim indicates that the order was actually for 12 vessels and was going well until Squires reneged on a promise not to "glom onto" all of Ladin's shipping ventures.
"One of Ladin’s independent shipping projects – the purchase of twelve ships from Chinese manufacturer Zhejiang Satellite Petrochemical Co. Ltd. (“ Satellite ”) – was close to closing and had made some news. Squires demanded that Ladin include him in the deal, articulating for the first time the view that the Delos Shipping Agreement required that Ladin give Squires a 50% interest in every one of Ladin’s independent shipping ventures," the counterclaim states.
"Ladin refused. Ladin had pursued the transaction with Satellite without any funds from Squires, using newly created entities that had no connection to Squires or Delos Shipping, and through his own connections and hard work. Ladin was not an indentured servant to Squires and was entitled to pursue the Satellite deal without Squires’ involvement.
"Squires’ response was to interfere with the Satellite venture, including through threatening phone calls by Squires and [a fellow investor] to various parties associated with the potential transaction. This interference caused the termination of the Satellite transaction, resulting in tens of millions of dollars in damages to Ladin," the brief states.
