Cunningham Holdings, Inc. Sues Chemoil and Glencore LTD for $890 Million Fraud

January 06, 2016 − by John David − in Litigation − No Comments

Companies secretly diverted millions in renewable energy tax credits, states multi-count lawsuit

Murrieta, Calif. (January 06, 2016) – Cunningham Holdings Inc., a private investment management firm, recently filed a wide sweeping counter lawsuit against Chemoil Corporation and Glencore Ltd., a subsidiary of Glencore Plc (GLEN:LN).  The lawsuit alleges fraud, unjust enrichment and conversion among other counts and seeks more than $890 million in damages.

Cunningham Holdings and Chemoil entered into a joint venture in 2013 to market petroleum products, including renewable fuels, using Cunningham Holdings’ sophisticated enterprise resource management systems.  Within months, the joint venture was generating more than $20 million per month in revenues.

According to the lawsuit, in May of 2014, Chemoil and Glencore Ltd. failed to meet contractual obligations and began to withhold all supplies of fuel to the joint venture.  The lawsuit states the joint venture would have generated profits in excess of $800 million by the end of fiscal year 2017.

In addition, the lawsuit states that Chemoil and Glencore Ltd. failed to disclose to Cunningham Holdings and the joint venture that Chemoil and Glencore Ltd. filed for and received federal excise tax credits, Renewable Identification Number (RIN) credits and California Low Carbon Fuel Standard carbon credits, known as CI Credits, worth more than $142 million.

The counter lawsuit, filed in Superior Court of California, alleges breach of the joint venture agreement, breach of fiduciary duty, conversion, fraud and deceit (concealment), conspiracy to commit fraud, fraud and deceit (false promise), unjust enrichment, breach of implied covenant of good faith and fair dealing, and intentional interference with prospective economic advantage.

According to the verified counter lawsuit, Chemoil and Glencore Ltd. “inexplicably refused to cooperate… with the joint venture’s independent audit firm… refusing to address or confirm [the auditor’s] requests related to any transactions between the parties.”  The lawsuit further says that Giles Jones, the U.S. head of Glencore Ltd., threatened that if Cunningham did not cooperate with the cover up of Chemoil and Glencore’s IRS tax credit fraud, he would shut down the joint venture.  Cunningham Holdings’ chose the only legal option, and moved to cease its business relations with Chemoil and Glencore on June 30, 2015.

Cunningham Holdings, Inc. is represented by Barry Walker of Walker Trial Lawyers and Bill Parks, co-counsel.

Copies of the counter suit are available for download here.


Source: Cunningham Holdings, Inc.


John P. David, David PR Group
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