NEW YORK, February 23, 2017 /PRNewswire/ --
A New York court has granted
London-based commodity trader
TransAsia Commodities Ltd. a major victory in its three-year battle
seeking damages for breach of contract and fraud against Greek
shipping company NewLead Holdings Ltd.
Judge Charles Ramos of the
Supreme Court of New York County
found NewLead and related defendants to be in contempt for multiple
failures to comply with demands for evidence. As a
consequence, he struck the defendants' responses to the claim and
delivered a default judgment.
The judgment was rendered at a hearing Jan. 19 and confirmed with the release Wednesday
of a signed order. NewLead and other defendants, including former
CEO Michael Zolotas, failed to
appear and were not represented by counsel. Co-defendant
Jan Berkowitz, CEO of a US
subsidiary called NewLead JMEG LLC, was the subject of a similar
default judgment in December. Motions submitted by TransAsia had
sought the Court to impose a constructive trust in the amount of
$12 million to cover TransAsia's
damages. However, Judge Ramos has referred the issue of
compensatory and punitive damages, including "reasonable costs and
attorney's fees" to a Special Referee which will make
recommendations later.
TransAsia's claims arose from contracts it signed with NewLead
JMEG in 2013 for the purchase of coal which, according to court
documents, NewLead never owned from mines it also did not own.
False counterclaims filed by the defendants against TransAsia
forced its owner Serge Turko to
place his company into administration. The counterclaims were
subsequently withdrawn.
"Our client's business was devastated by the conduct of these
defendants," TransAsia attorney Eric
Freed of Cozen O'Connor LLP said today. "We hope that with
the entry of these default judgments, this long ordeal will soon be
over."
According to an amended complaint filed in April last year:
"Defendants used public filings and press releases about the
offtake coal contracts to entice investors to purchase and drive up
the price of NewLead Holdings' shares. They then issued millions of
shares of NewLead Holdings stock to themselves as salary and
bonuses, and to companies owned by them, their family members, and
their close associates, who were disguised as 'consultants' and
'vendors.' Defendants then lined their own pockets by selling the
shares at inflated prices to the unsuspecting stock buying public,
who relied on the company's deceptive press releases touting their
supposedly successful entry into the coal mining business."
This complex "pump and dump" scheme was intended initially to
retain NewLead's listing on the NASDAQ exchange by meeting listing
standards for share price and market capital. Nonetheless, NewLead
was forced to de-list in 2014 and its shares currently trade on the
OTC Pink market.
Michael Zolotas is currently
awaiting trial in Cyprus on
unrelated charges connected with allegations of bribery against a
former governor of the EU nation's central bank.
SOURCE TransAsia Commodities Ltd.