Energy Companies in Del. Court of Chancery Complaint Accuse Ex-Employees of Moving Funds for Secret Side Business
The complaint stated the parties and facts of the case are so intertwined it would be unreasonable, if not impossible, for its claims to be severed.
June 12, 2020 at 02:09 PM
3 minute read
An energy company has accused its former CFO and CCO of secretly funneling corporate money to and from his own businesses and using private information to make a profit trading crude oil.
A complaint filed Tuesday in the Delaware Court of Chancery indicated the U.S. Shale Management Co. and eight related corporations filed their case against William S. Dickey, Christopher Himes, Golden Trading and Transportation LLC, Trails End Enterprises II LLC and Hilltoppers Capital Growth LLC in part because Dickey made demands to be indemnified.
Dickey, of Littleton, Colorado, previously served as a controlling interest holder of Hilltoppers, which is based in Dover, and on plaintiff U.S. Shale Energy Advisors LLC (USEA)'s board of directors. Hiltoppers is a partial owner of USEA.
Until June 24, 2019, Dickey and Himes were employed by U.S. Shale Management, or USMC, with Himes reporting directly to Dickey.
Dickey was the CFO and CCO for USMC, giving him and Himes access to confidential financial information and equipment belonging to Rocky Mountain Crude Oil LLC and RMCO Holdings, plaintiff companies to which USMC provided operational and administrative services. Both are also owners of plaintiff U.S. Shale Energy Partners LP.
The complaint alleges Dickey and Himes secretly used USMC employees to provide similar services to Golden Trading and Trails End, Colorado-based defendant companies controlled by Dickey.
Between at least February through May 2019, Dickey and Himes allegedly told USMC employees to use RMCO funds to pay Golden Trading for crude oil and stole intellectual property, using USMC and RMCO's private customer information to gain business opportunities to RMCO's detriment.
Without the plaintiffs' knowledge, the complaint asserts, Golden Trading purchased crude oil from third parties. That oil was then reportedly sold from Golden Trading to RMCO at a profit, then from RMCO to a company that had an existing agreement with RMCO.
Each plaintiff has either ownership or shareholder interest in or is owned, in partnership with or is controlled by at least one of the other plaintiffs. Seven of the nine plaintiffs share a Billings, Montana, business address, while one, Lone Pine Resources LP, is based in Houston and another, Shale Energy Holdings LLC, has its principal address in Allenport, Pennsylvania. Two of the plaintiffs are incorporated in Texas, and the remainder are incorporated in Delaware.
The complaint stated the parties and facts of the case are so intertwined it would be unreasonable, if not impossible, for its claims to be severed.
Claims of civil conspiracy, conversion, unjust enrichment, misappropriation of property and services, and violation of the uniform trade secrets acts in Delaware, Colorado and Texas were filed by all plaintiffs against all defendants. Six plaintiffs are seeking declaratory judgment against Dickey, one of which is also asking for a judgment against Hilltoppers.
Multiple plaintiffs have also claimed Dickey breached his fiduciary and contractual duties, and RMCO and RMCO Holdings have alleged tortious interference with contractual relations by all defendants.
Dickey and Himes' employment with USMC was terminated June 24, 2019, and Dickey was removed as an officer or director for the plaintiff corporations.
Court records indicate none of the defendants were represented by counsel as of Friday morning, and attorneys for the plaintiffs either declined comment or did not respond to requests for comment Thursday and Friday.
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