Susman Godfrey L.L.P. Wins $4 Million Judgment for Frankel Offshore Energy Against Grimes Energy, Texas Standard Oil & Gas LP, and PetroVal

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Nov 18, 2010, 12:14 ET

HOUSTON, Nov. 18, 2010 /PRNewswire/ -- On November 10, 2010, Susman Godfrey L.L.P. won a $4-plus million judgment for Houston-based oil and gas exploration and production company Frankel Offshore Energy, Inc. and against its business partners, Grimes Energy, Inc., Texas Standard Oil & Gas, LP, and PetroVal, Inc.

Frankel Offshore owned 50% of a business venture and of certain offshore oil and gas properties in the Gulf of Mexico, and the other 50% collectively was owned by Grimes Energy, Texas Standard, and PetroVal. In its lawsuit, Frankel Offshore claimed that these three companies secretly cut it out of the business venture, formed a new competing company, improperly transferred assets into their new secret company, and sold those assets without any disclosure to Frankel Offshore. Frankel Offshore alleged that the conduct of Grimes Energy, Texas Standard, and PetroVal amounted to fraud, breach of fiduciary duty, and breach of contract.

The jury agreed. After a two week jury trial in June 2010, the jury returned a verdict in favor of Frankel Offshore and found that Grimes Energy, Texas Standard, and PetroVal engaged in fraud, breached their fiduciary duties to Frankel Offshore, and breached multiple contracts with Frankel Offshore, including a contract they defrauded Frankel Offshore into signing.

On November 10, after considering post-verdict motions and argument, Judge R.K. Sandill of the 127th District Court in Harris County entered judgment and awarded Frankel Offshore over $4 million based on the jury's verdict. The Court held that "Frankel Offshore shall recover $1,359,643.55 from Grimes Energy, Inc., $1,970,959.73 from PetroVal, Inc., and $679,571.78 from Texas Standard Oil & Gas, LP, for their breach of fiduciary duties."

Frankel Offshore's lead trial lawyer, Geoffrey L. Harrison, a partner in the Houston office of litigation boutique Susman Godfrey, said he was "thrilled with the Court's ruling, and impressed with the Court's careful attention to the issues raised." "The jury's verdict and the Court's $4 million judgment is complete vindication for Frankel Offshore," said Harrison. "Business folks need to get the message that judges and juries are not going to put up with cheating, stealing, secrecy and just plain nastiness," said Harrison.

Frankel Offshore's president, Scott A. Frankel, said he was "delighted with the Court's judgment" and "watching my lawyers work was a thing of beauty."

Frankel Offshore Energy, Inc. was represented by Geoffrey L. Harrison, Alexander L. Kaplan and Yvonne Y. Ho of Susman Godfrey LLP, and by Ashish Mahendru of Mahendru, P.C.

Grimes Energy, Inc., Texas Standard Oil & Gas, LP, and PetroVal, Inc. were represented by John H. Kim of The Kim Law Firm, by Charles Sharman, and by Robert M. "Randy" Roach Jr. of Roach & Newton LLP.

www.susmangodfrey.com

SOURCE Susman Godfrey L.L.P.