Vaalco Energy Sues Activist Fund
Posted on: Saturday, 17 May 2008, 03:00 CDT
By Christopher Faille, Senior Financial Correspondent
HOUSTON (HedgeWorld.com) - Vaalco Energy Inc., an independent oil and gas company with exploration acreage in two West African countries, Gabon and Angola, filed a lawsuit on Tuesday [May 13] against a New York-based hedge fund and a Switzerland-based energy company, alleging that they have filed misleading documents with the U.S. Securities and Exchange Commission in the course of an ongoing proxy contest.
In the lawsuit, filed in the U.S. District Court for the Southern District of Texas, Vaalco Energy asks among other remedies that the defendants be enjoined from soliciting proxies "or taking any action, including but not limited to voting, with respect to any proxies they may obtain prior to the public correction of their materially false, misleading and incomplete [filings]."
The hedge fund defendant is Nanes Delorme Partners I LP, which was formed in January. Since March, Nanes Delorme has urged that Vaalco put itself up for sale.
For the one-year period ending March 11, when Nanes began to make this case publicly, Vaalco's stock was down 7%. During the same period, the Standard & Poor's 500 Oil and Gas Exploration and Production Index was up 62%.
In April, Nanes Delorme nominated three candidates for positions on Vaalco's board of directors: Julien Balkany, Leonard Toboroff and Clarence Cottman III. The annual meeting is scheduled for June 4.
Vaalco contends that Nanes and the Zug, Switzerland-based defendant, Pilatus Energy SA, have been working in concert to force a quick sale of the company at prices higher than they paid but contrary to the interests of longer-horizon investors. It refers to Pilatus as the "until recently hidden Vaalco investor" and as Nanes' "secret partner."
In a statement, board nominee Julien Balkany replied: "Rather than provide a clear strategic plan to rebuild stockholder value, the company has chosen to evade the critical issues facing Vaalco by filing a desperate and baseless lawsuit aimed at disenfranchising stockholders and 'chilling' the democratic process."
There isn't a lot of available public information about Pilatus. But according to a newsletter on African energy explorations, Pilatus is associated with Loik Le Floch-Prigent, who was once the chief executive of the French oil company Elf Aquitane S.A.
A court in France convicted Mr. Le Floch-Prigent of embezzlement and related offenses in 2003 and he spent one year in prison.
Vaalco's complaint charges that Pilatus Energy is now acting under Mr. Le Floch-Prigent's "direction and control," though HedgeWorld can not confirm this.
(c) 2008 Daily News; White Plains. Provided by ProQuest Information and Learning. All rights Reserved.
Source: Daily News; White Plains
User Comments (0)
RSS Feeds