A $22.2m judgment against Greek shipowner NewLead Holdings and chief executive Michael Zolotas has been handed down by a New York court, but the next move in the long-running legal battle is still in doubt.
TradeWinds reported in November that New York Supreme Court judge Charles Ramos was poised to lodge the judgment in favour of TransAsia Commodities over allegations of fraud in the coal-mining industry.
Ramos’ order came as expected on Monday: $7.86m in compensatory damages, $10m in punitive damages, $1.29m in attorneys’ fees, $223,000 in disbursements and $2.83m in pre-judgment interest.
The four-year court fight saw the Serge Turko-led trading company claiming that NewLead's coal-mining joint venture sold coal that it did not have.
The lawsuit also contended that NewLead's claims that it controlled coal mines were part of a "pump and dump scheme" to inflate the price of the company's shares, which traded on the Nasdaq stock market at the time. NewLead has denied the charge.
TransAsia prevailed on its claims of breach of contract, common-law fraud, civil conspiracy and malicious prosecution of its counterclaims, among others.
A lawyer representing NewLead has previously told TradeWinds that he intends to appeal against the judgment.
While NewLead was considered in default for not participating in large parts of the case, lawyer Jonathan Greenbaum of Coburn & Greenbaum says “the damages issue raises serious questions, including constitutional ones”.
Neither NewLead nor TransAsia’s counsel, Eric Freed of Cozen O’Connor, could be reached for comment before TradeWinds went to press.
Financially distressed NewLead no longer owns any ships, raising questions about what moves the victorious plaintiffs might be able to make to collect the judgment.
Besides NewLead and Zolotas, other defendants in the case included coal-mining outfit NewLead JMEG and joint-venture partner Jan Berkowitz.
