The Pettit Law Firm and Lynn Pinker Cox Hurst Secure a $4.2 Million Fraud and Breach of Fiduciary Duty Judgment Against LegacyTexas Bank
The judgment was signed on December 28, 2018 following a 2-week trial earlier this fall before Judge Dale Tillery in the 134th District Court in Dallas County, Texas.
Co-lead counsel Julie Pettit and Michael K. Hurst represent Plaintiff Robert Imel, an oil and gas entrepreneur in a suit against LegacyTexas bank for fraud, breach of fiduciary duty, declaratory judgment, conspiracy, and breach of contract.
LegacyTexas Bank, through its head of energy finance, Chris Parada, represented to Imel that it would release Imel from a personal guaranty related to his oil and gas company’s financing agreement if certain oil and gas assets were sold and a loan by LegacyTexas was paid off by a time certain. LegacyTexas then acted as a broker and persuaded Imel to negotiate the sale of the assets to Energy Reserves Group, LLC (“ERG”). Meanwhile, LegacyTexas Bank and ERG secretly negotiated a sale of the note and Imel’s personal guaranty to ERG so that ERG could pursue Imel under the guaranty and force Imel to surrender the assets as well as valuable non-collateral oil and gas assets.
The Court found Legacy liable for its tortious conduct for $3.6 million in actual damages and over $636,000 in attorneys’ fees. The Court also found ERG liable in the amount of $159,000 in attorneys’ fees.
“We are pleased with the decision,” said Julie Pettit, co-lead counsel for Imel. “The judgment affirms our position regarding LegacyTexas’ misrepresentations and fraudulent conduct toward its own borrower.”
“This important judgment underscores that in business, no one has a license to hide the truth, steal and double deal– especially from those who they are entrusted to protect,” said Michael K. Hurst, co-lead counsel for Imel.
Along with Pettit and Hurst, the trial team included David Urteago and Jane Cherry of The Pettit Law Firm.
Trial Days: 10
Settlement Negotiations: Nothing meaningful
Expert for Imel: Scott Ellington, Chief Legal Officer, General Counsel and Secretary, Highland Capital Management L.P.
The case is Robert A. Imel v. LegacyTexas Bank and Energy Reserves Group, case number DC-16-01372, in the 134th District Court in Dallas County, Texas. LegacyTexas was represented by John Leininger, Steve Shapiro, and Alexis Reller of Shapiro Bieging Barber Otteson LLP. ERG was represented by Marty Brimmage, Molly Whitman, and Keertan Chauhan of Akin Gump Strauss Hauer & Feld LLP.